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Andrew Burrows
A Casebook on Contract
ii
A Casebook
on Contract
Seventh Edition

ANDREW BURROWS
MA, BCL, LLM (Harvard), QC (Hon), FBA, DCL, Honorary Bencher of Middle
Temple, Professor of the Law of England in the University of Oxford and a Fellow
of All Souls College, Oxford; a Justice of the Supreme Court of the United Kingdom
(from 2 June 2020)
 HART PUBLISHING
Bloomsbury Publishing Plc
Kemp House, Chawley Park, Cumnor Hill, Oxford, OX2 9PH, UK
1385 Broadway, New York, NY 10018, USA

HART PUBLISHING, the Hart/Stag logo, BLOOMSBURY and the Diana logo are
trademarks of Bloomsbury Publishing Plc
First published in Great Britain 2020
Copyright © Andrew Burrows, 2020
1st edition 2007, 2nd edition 2009, 3rd edition 2011, 4th edition 2013, 5th edition 2016, 6th edition 2018.
Andrew Burrows has asserted his right under the Copyright, Designs and Patents
Act 1988 to be identified as Author of this work.
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopying, recording, or any information storage or retrieval system,
without prior permission in writing from the publishers.
While every care has been taken to ensure the accuracy of this work, no responsibility for loss or damage
occasioned to any person acting or refraining from action as a result of any statement in it can be
accepted by the authors, editors or publishers.
All UK Government legislation and other public sector information used in the work is Crown Copyright ©.
All House of Lords and House of Commons information used in the work is Parliamentary Copyright ©.
This information is reused under the terms of the Open Government Licence v3.0 (http://www.
nationalarchives.gov.uk/doc/open-government-licence/version/3) except where otherwise stated.
All Eur-lex material used in the work is © European Union,
http://eur-lex.europa.eu/, 1998–2020.

A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication data
Names: Burrows, A. S. (Andrew S.), author.
Title: A casebook on contract / Andrew Burrows, MA, BCL, LLM (Harvard), QC (Hon), FBA, DCL,
Honorary Bencher of Middle Temple, Professor of the Law of England in the University of Oxford
and a Fellow of All Souls College, Oxford; Supreme Court Justice-Elect.
Description: Seventh edition. | Oxford, UK ; New York, NY : Hart Publishing, an imprint
of Bloomsbury Publishing, 2020. | Includes bibliographical references and index.
Identifiers: LCCN 2020009697 (print) | LCCN 2020009698 (ebook) |
ISBN 9781509936144 | ISBN 9781509936168 (ePDF) | ISBN 9781509936151 (Epub)
Subjects: LCSH: Contracts—England. | LCGFT: Casebooks (Law)
Classification: LCC KD1554 .B87 2020 (print) | LCC KD1554 (ebook) | DDC 346.4202/2—dc23
LC record available at https://lccn.loc.gov/2020009697
LC ebook record available at https://lccn.loc.gov/2020009698
ISBN: PB: 978-1-50993-614-4
ePDF: 978-1-50993-616-8
ePub: 978-1-50993-615-1
Typeset by Compuscript Ltd, Shannon

To find out more about our authors and books visit www.hartpublishing.co.uk.
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IN MEMORY OF MY PARENTS
vi
Acknowledgements
The author and publisher gratefully acknowledge the authors and publishers of extracted
material which appears in this book, and in particular the following for permission to
reprint from the sources indicated:

Justis and the Incorporated Council of Law Reporting for England and Wales—the Law
Reports, the Weekly Law Reports and the Industrial Cases Reports.

LexisNexis Butterworths—extracts from the All England Law Reports, the All England
Reports Commercial Cases, Family Court Reports and Law Times Reports.

Informa UK Ltd—extracts from Lloyd’s Law Reports and Building Law Reports.

Sweet & Maxwell Ltd (Westlaw)—for an extract from the Fleet Street Reports, an
extract from Commercial Law Cases, and an extract from the Property, Planning and
Compensation Reports.
viii
Preface
In my view, the best way for students to understand and enjoy the law of contract is by
careful analysis of what the judges have said in the leading cases. It is with that in mind
that I have written this book. It aims to make the cases readily accessible through a clear
structure, by a succinct introductory commentary to the various sections, and by notes
and questions that will enable a student to appreciate the significance of a particular case
and the interesting issues raised by it. Novel features include the treatment of legislation,
where I have tried to give a principled overview of the central provisions, and the sum-
maries of academic writings either as part of the notes on a particular case or in the addi-
tional reading at the end of each chapter. Above all it is hoped that the book will convey
the fascination and excitement of this central subject.
This is a casebook in the traditional sense that it is designed to be used alongside,
rather than as a replacement for, a textbook. There are several excellent textbooks on
contract. I have given references throughout to the four that I consider the best. As an
introductory book, most usefully read at the start of a topic, I would recommend Ewan
McKendrick, Contract Law. Students may also find helpful in giving them an overview
A Restatement of the English Law of Contract. If the student is going to buy any other
books I would recommend, as a more detailed textbook, Anson’s Law of Contract and,
as a more theoretical work, Atiyah’s Introduction to the Law of Contract. But obviously
teachers and students have their own favourites and this casebook can be used just as
easily with any other textbook.
This book is aimed at all those studying contract, in particular undergraduates on law
courses. The contents seek to reflect the scope of most modern university courses so that
the law on illegality and incapacity is not included.
Three further particular features of the contents should be noted. The first is the prom-
inence given to remedies. Both theoretically and in practice this topic is, arguably, the
most important in contract law and yet often it is pushed to the end of a course where it is
not given the attention it merits. It is to be found in the centre of this book as Part Three.
The second is the recognition of the interplay between contract law and the drafting of
contract terms. Lawyers need a detailed knowledge of contract law not only to advise
when things go wrong but also in order to be able to draft contracts effectively. Proper
attention is therefore paid at various stages of this book to interpretation and to various
types of contract term. The third is the use made of the outstanding comparative work
of the Commission on European Contract Law (led by Olé Lando and Hugh Beale). Their
Principles of European Contract Law (PECL), published in 2000, merits greater atten-
tion by students than has traditionally been the case. What I have done here, ­therefore,
is to set out the relevant parts of PECL at the ends of chapters (along with the page
­references to the detailed commentary) so that students can compare PECL with English
law once they have mastered a particular topic. My own square-bracketed comments are
then designed to help a student to see, and to think about, the differences. I have chosen
PECL rather than the relevant sections of the 2009 Draft Common Frame of Reference
(prepared by the Study Group on a European Civil Code and the Research Group on
x Preface

EC Private Law (Acquis Group)) because the DCFR is, in my view, a more difficult
draft and commentary for students to understand and use. It is primarily for reasons of
space that I have referred just to PECL and not also to the equally impressive Unidroit
Principles of International Commercial Contracts.
The extracts from the statutes are reproduced in the most recent form with all
­amendments being incorporated within square brackets.
By the time a student has worked his or her way through this book, he or she will have
favourite judges who can be relied on for rational and clear exposition of contractual
principles. I anticipate that most will derive the greatest illumination from the judgments
of Lord Denning, Lord Wilberforce, Lord Steyn, Lord Nicholls and Lord Bingham. It is
striking how much more sophisticated judicial reasoning on contract has become albeit
that this coincides with ever longer judgments.
I would like to thank the team at Hart Publishing, especially Sinead Moloney and Tom
Adams, for being both efficient and a great pleasure to work with.
New cases covered in this edition include (in the order in which they appear): Devani
v Wells; Astor Management AG v Atalaya Mining plc; Bates v Post Office; Persimmon
Homes Ltd v Ove Arup & Partners Ltd; Dera Commercial Estate v Derya Inc, The Sur;
African Export–Import Bank v Shebah Exploration and Production Co Ltd; Goodlife
Foods Ltd v Hall Fire Protection Ltd; Perry v Raleys Solicitors; Chudley v Clydesdale
Bank plc; First Tower Trustees Ltd v CDS (Superstores International) Ltd; British Red
Cross v Werry; FSHC Group Holdings Limited v GLAS Trust Corporation Limited;
Canary Wharf (BP4) T1 Ltd v European Medicines Agency; Times Travel (UK) Ltd
v Pakistan International Airlines Corp. New articles referred to include those by
Hoffmann and Rowan.

Andrew Burrows
1 March 2020
Contents
Acknowledgements vii
Preface ix
Table of Cases xxv
Table of Legislation lv

PART ONE: THE FORMATION OF A CONTRACT

1. OFFER AND ACCEPTANCE 3

1. Introduction 3
(1) What is a Contract? 3
(2) Offer and Acceptance 4
2. Offers and Invitations to Treat 4
(1) Two General Illustrative Cases 5
Harvey v Facey 5
Gibson v Manchester City Council 5
(2) Display of Goods for Sale 7
Fisher v Bell 7
Pharmaceutical Society of Great Britain v Boots Cash Chemists
(Southern) Ltd 8
(3) Advertisements 10
Partridge v Crittenden 10
Carlill v Carbolic Smoke Ball Company 11
(4) Auction Sales 15
Barry v Davies 15
(5) Tenders 19
Spencer v Harding 19
Harvela Investments Ltd v Royal Trust Company of Canada (CI) Ltd 20
Blackpool and Fylde Aeroclub Ltd v Blackpool Borough Council 22
3. Acceptance 25
(1) Acceptance by Conduct 26
Brogden v Metropolitan Railway Co 26
(2) ‘Battle of the Forms’ 27
Butler Machine Tool Co Ltd v Ex-Cell-O Corporation (England) Ltd 27
(3) Communication of Acceptance 33
(a) The General Rule: Acceptance Must Be Received by Offeror 33
Entores Ltd v Miles Far East Corporation 33
Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH 35
xii Contents

(b) Acceptance by Post 37

Household Fire and Carriage Accident Insurance Co Ltd v Grant 37
Holwell Securities Ltd v Hughes 39
(c) Waiver by Offeror of the Need for Communication of Acceptance 41
Felthouse v Bindley 41
(4) Prescribed Mode of Acceptance 43
Manchester Diocesan Council for Education v Commercial
and General Investments Ltd, 43
(5) Acceptance in Ignorance of an Offer 45
R v Clarke 45
(6) Acceptance in Unilateral Contracts 47
Errington v Errington 47
Soulsbury v Soulsbury 48
4. Termination of an Offer 49
(1) Revocation 50
Byrne & Co v Van Tienhoven & Co 50
Dickinson v Dodds 51
(2) Rejection 54
Hyde v Wrench 54
Stevenson, Jacques & Co v McLean 54
5. Problematic Offer and Acceptance 55
The Satanita 56
Additional Reading 57

2. CERTAINTY AND INTENTION TO CREATE LEGAL

RELATIONS 61
1. Certainty 61
(1) Vagueness 61
Hillas & Co Ltd v Arcos Ltd 61
Scammell and Nephew Ltd v Ouston 65
(2) Price Not Fixed 66
May and Butcher Ltd v R 66
Sudbrook Trading Estate Ltd v Eggleton 69
(3) Agreements to Negotiate 71
Walford v Miles 71
(4) A Non-contractual Solution 76
British Steel Corporation v Cleveland Bridge and Engineering Co Ltd 76
2. Intention to Create Legal Relations 79
(1) General 79
Blue v Ashley 79
(2) Social and Domestic Agreements 84
Balfour v Balfour 84
Jones v Padavatton 86
(3) Commercial Agreements 87
Esso Petroleum Co Ltd v Commissioners of Customs and Excise 87
Additional Reading 91
 Contents xiii

3. CONSIDERATION AND PROMISSORY ESTOPPEL 93

1. Consideration 93
(1) The Consideration Need Not Be Adequate 94
Chappell & Co Ltd v Nestlé Co Ltd 94
(2) Past Consideration Does Not Count 97
Eastwood v Kenyon 97
Pao On v Lau Yiu Long 99
(3) Consideration and the Promise to Perform, or Performance of,
a Pre-existing Duty 101
(a) Pre-existing Duty Imposed by the General Law
(ie a Non-contractual Duty) 101
Collins v Godefroy 101
Glasbrook Brothers Ltd v Glamorgan County Council 102
Ward v Byham 104
Williams v Williams 105
(b) Pre-existing Duty under a Contract with a Third Party 106
Shadwell v Shadwell 106
Scotson v Pegg 108
Pao On v Lau Yiu Long 109
(c) Pre-existing Duty under a Contract with the Promisor 110
Stilk v Myrick 110
Williams v Roffey Bros & Nicholls (Contractors) Ltd 112
Foakes v Beer 117
Re Selectmove Ltd 121
2. Promissory Estoppel 124
(1) The Emergence of Promissory Estoppel 124
Hughes v Metropolitan Rly Co 124
Central London Property Trust Ltd v High Trees House Ltd 125
Collier v P & MJ Wright (Holdings) Ltd 128
(2) Promissory Estoppel Not a Cause of Action 129
Combe v Combe 129
Crabb v Arun District Council 132
Amalgamated Investment & Property Co Ltd v Texas Commerce
International Bank Ltd 136
Waltons Stores (Interstate) Ltd v Maher 138
Baird Textiles Holdings Ltd v Marks & Spencer plc 144
(3) Promissory Estoppel Requires a Clear and Unequivocal Promise 148
Woodhouse AC Israel Cocoa SA v Nigerian Produce
Marketing Co Ltd 148
(4) Does Promissory Estoppel Require Reliance or Detrimental Reliance? 149
WJ Alan & Co Ltd v El Nasr Export and Import Co 149
Société Italo-Belge pour le Commerce et l’Industrie SA v Palm and
Vegetable Oils (Malaysia) Sdn Bhd, The Post Chaser 152
(5) Promissory Estoppel Cannot be Founded on a Promise Induced by the
Promisee’s Inequitable Conduct 153
D & C Builders Ltd v Rees 153
xiv Contents

(6) Does Promissory Estoppel Extinguish or Suspend Rights? 156

Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd 156
Additional Reading 158

PART TWO: THE TERMS OF A CONTRACT

4. IDENTIFYING THE TERMS 165

1. Terms or Mere Representations? 165
Oscar Chess Ltd v Williams 166
Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd 171
Esso Petroleum Co Ltd v Mardon 172
2. Incorporation of a Party’s Written Terms 174
(1) Signature 175
L’Estrange v F Graucob Ltd 175
Curtis v Chemical Cleaning and Dyeing Co 177
(2) Reasonable Notice 179
Parker v The South Eastern Railway Company 179
Chapelton v Barry Urban District Council 181
Olley v Marlborough Court Ltd 182
Thornton v Shoe Lane Parking Ltd 184
Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd 187
AEG (UK) Ltd v Logic Resource Ltd 190
O’Brien v MGN Ltd 195
(3) Course of Dealing 197
McCutcheon v David MacBrayne Ltd 197
Hollier v Rambler Motors (AMC) Ltd 199
(4) The Parties’ Trade Practice 201
British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd 201
3. Implied Terms 203
(1) Terms Implied by the Courts 203
(a) Terms Implied by Fact 203
The Moorcock 203
Attorney-General of Belize v Belize Telecom Ltd 208
Marks and Spencer plc v BNP Paribas Services Trust Company
(Jersey) Limited 212
Yam Seng Pte Limited v International Trade Corporation Limited 218
Sheikh Tahnoon Al Nehayan v Kent 226
(b) Terms Implied by Law 230
Liverpool City Council v Irwin 230
Shell UK Ltd v Lostock Garage Ltd 235
Scally v Southern Health and Social Services Board 237
(2) Terms Implied, or Treated as Included, by Statute 241
(a) Non-Consumer Contracts for the Sale of Goods 242
Sale of Goods Act 1979, sections 12–15 242
(b) Consumer Contracts for the Sale of Goods 244
Consumer Rights Act 2015, sections 3, 9–18 244
 Contents xv

(c) Non-Consumer Contracts for Services 248

Supply of Goods and Services Act 1982, sections 12–15 248
(d) Consumer Contracts for Services 249
Consumer Rights Act 2015, sections 48–52 249
Additional Reading 251

5. INTERPRETING THE TERMS 253

1. The Modern Approach to Construction 253
Investors Compensation Scheme Ltd v West Bromwich
Building Society 253
Chartbrook Ltd v Persimmon Homes Ltd 256
Arnold v Britton 262
2. Construction of Exemption Clauses 266
(1) Excluding or Limiting Liability for Negligence 267
Alderslade v Hendon Laundry Ltd 267
Canada Steamship Lines Ltd v R 269
Hollier v Rambler Motors (AMC) Ltd 272
(2) Excluding or Limiting Liability for Fundamental Breach 275
Photo Production Ltd v Securicor Transport Ltd 275
(3) Construing Limitation Clauses 280
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd 280
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd 281
Additional Reading 285

6. STATUTORY CONTROL OF EXEMPTION CLAUSES

AND UNFAIR TERMS 289
1. The Unfair Contract Terms Act 1977 290
Unfair Contract Terms Act 1977, sections 1–3, 6–14, 26–27, 29,
Schedules 1 and 2 290
(1) Overview of the Central Scheme of UCTA 1977 296
(2) Excluding Liability for Breach of the Statutory Implied Terms in
Non-Consumer Contracts for the Sale of Goods and
Analogous Contracts 297
(3) Cases on UCTA 1977 298
(a) What Counts as an Exclusion of Liability, or as Equivalent to
such an Exclusion, so as to Fall within the Act? 298
Phillips Products Ltd v Hyland 298
Thompson v T Lohan (Plant Hire) Ltd 301
Smith v Eric S Bush 303
Stewart Gill Ltd v Horatio Myer & Co Ltd 305
Tudor Grange Holdings Ltd v Citibank NA 306
(b) Does the Clause Pass, or Fail, the Reasonableness Test? 309
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd 309
Phillips Products Ltd v Hyland 312
Stewart Gill Ltd v Horatio Myer & Co Ltd 315
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