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Part II Performance of the Obligation, 5 Excuses for Failure to Perform on Time

John E. Stannard

From: Delay in the Performance of Contractual Obligations (2nd Edition)

John Stannard

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

(p. 83) Excuses for Failure to Perform on Time

5.01  Excuses for failure to perform may be of various kinds, but in the present context we shall consider them under four headings: (1) exclusions and exceptions; (2) discharge by agreement, variation, waiver and estoppel; (3) prevention by the promisee; and (4) other supervening events.

(p. 84) A.  Exclusions and Exceptions

5.02  A promisor may seek to negative or limit liability by reference to exclusions and exceptions contained in the contract. On the face of it this is a simple matter of construction, but the law has traditionally been suspicious of such clauses, and they therefore merit special attention in the present context. In the pages which follow we shall look at some common varieties of exclusion clause and at the ways in which such clauses may be incorporated into the contract, before turning to the ways in which the law limits their application. The principles involved are of course of general application,1 but we shall be concentrating on how they apply to questions of delay.

(1)  Varieties of exclusion clause

5.03  Exclusion clauses can exist in several guises. Since these may raise different legal issues, it is worth looking more closely at some of the distinctions that have been drawn in this context.

(a)  Exclusion clauses and limitation clauses

5.04  One distinction is between clauses which seek to exclude the liability of the promisor altogether and those which merely limit it. Thus for instance clause 9.4 of the standard set of conditions issued by the Freight Transport Association2 completely excludes the carrier’s liability for delay arising from specified causes, including act of God, seizure or forfeiture under legal process, strikes and so on, while clause 10 limits liability for consequential loss to the claimant’s bona fide loss or to the carriage charges, whichever shall be the less. In the past it has been said that the law takes a more relaxed attitude to limitation clauses than to those which seek to exclude liability altogether,3 and that the principles of strict construction used in relation to the latter will not apply with the same rigour to the former.4 In recent years, as we shall see, the courts have tended to move away (p. 85) from these principles, and in the light of this the distinction may now be less important than once it was.5

(b)  Exclusion of liability and exclusion of duty

5.05  Another relevant distinction is between clauses which exclude or limit the promisor’s liability for breach of a relevant legal duty and those which prevent that duty arising in the first place.6 An example of the first type of clause would be where a building contract excludes liability for loss arising from delay, or limits such recovery to a set sum. An example of the second would be where the contractors tell the employer that they will do their best, but cannot guarantee to have the work done by any particular time. Though the two may often boil down to the same thing in practice, they can raise different issues of analysis.7 However the traditional approach of English law is to ignore this logical distinction and to treat all three types of clause as exclusion clauses pure and simple.8

(c)  Limitation clauses and liquidated damages clauses

5.06  The law draws a distinction between limitation clauses, the purpose of which is to limit the liability of the promisor to pay damages, and liquidated damages clauses, the purpose of which is to provide for an agreed scale of compensation to be paid in any event.9 The distinction can be illustrated by reference to Suisse Atlantique Societe d’Armement Maritime SA v Rotterdamsche Kolen Centrale,10 which involved a demurrage clause in a charterparty whereby the charterer agreed to pay a fixed daily rate of damages for delays in loading and unloading. The owners of the ship sought to claim damages at large, arguing that the charterer’s breaches were so serious as to disentitle them from relying on the demurrage clause. But the House of Lords held that this argument was misconceived. Whatever the status of the principle contended for by the owners, it could have no application to a demurrage clause, which was not an exceptions clause at all, but merely a clause providing for liquidated damages for a certain kind of breach. Though as a general rule sums recoverable as demurrage would be less than what (p. 86) would be recovered had damages been left at large,11 the point was that the shipowner was entitled to recover for delay at the agreed rate whatever the loss might be: no more and no less.12

(d)  ‘Tailor-made’ clauses and ‘off the peg’ clauses

5.07  Exclusion clauses are often found in standard form contracts that are then adopted en bloc by the parties. Problems can then arise when the standard terms appear to contradict specific terms agreed on by the parties for the particular contract in question. The general approach of the law is to try as far as possible to construe the contract so as to avoid conflict, but to give priority to the ‘tailor-made’ term in the last resort.13 In Marifortuna Naviera SA v Government of Ceylon14 the provisions of a voyage charterparty made the owners liable for the failure of the vessel to be ready to load in accordance with notice of readiness, but the charter also contained a ‘clause paramount’ incorporating the Hague Rules. When sued for delay under the clause in question, the shipowner sought to rely on the exceptions contained in the Hague Rules. It was held that the express clause should prevail over the standard form exception, firstly on the basis of the principle generaliter specialibus non derogant, and secondly on the ground that if the clause paramount were allowed to prevail the express clause would be rendered virtually nugatory.

5.08  In this case no reconciliation between the two provisions was possible, but in The Leonidas15 a speed warranty in a charterparty providing that the vessel should proceed ‘at 11 knots weather and safe navigation permitting’ was held to be subject to a similar clause paramount incorporating the Hague Rules. In this case, unlike the one mentioned in the previous paragraph, it was possible to read the clause subject to the exceptions in the Rules without depriving it of meaning. The court added that whilst as a general rule a tailor-made clause would prevail over one in standard form, this only applied where the two were in conflict. The court would seek to construe the contract as a whole, and if a reasonable commercial construction of the whole could reconcile two seemingly contradictory provisions, whether typed or printed,16 then such construction would be adopted.17

(p. 87) (e)  Exclusion clauses and inequality of bargaining power

5.09  As we shall see, exclusion clauses can be incorporated into the contract in a variety of ways,18 but in most cases this will involve the parties agreeing to adopt a standard set of printed terms. As has often been pointed out, this can be a perfectly legitimate way of allocating contractual risks and saving transaction costs, but a less defensible aspect of such terms has been the exploitation or abuse of superior bargaining power, in which the stronger party has been in a position to dictate terms to the weaker.19 Though the courts have by no means turned a blind eye to this aspect of the matter,20 it is of particular importance in relation to statutory controls on exclusion clauses, which draw a clear distinction between cases where the terms are agreed by parties of equal bargaining power and where they are not.21

(f)  Force majeure clauses

5.10  A force majeure clause has been defined as a term by virtue of which the promisor is entitled to cancel the contract, or is excused from performance, in whole or in part, or is entitled to suspend performance or to claim an extension of time for performance, upon the happening of a specified event or events beyond his or her control.22 Such clauses have been said not to be exception clauses in the proper sense,23 but they are subject to similar restrictions. Thus, for instance, the burden of proof is on the party relying on such a clause to show that it covers the event in question, that the non-performance was due to circumstances beyond his or her control and that there were no reasonable steps that could have been taken to mitigate the event or its consequences.24 In the same way, clauses of this type may fall foul of the statutory controls discussed below.25

(2)  Incorporation of exclusion clauses into contract

5.11  Before any exclusion clause can be relied on, it must be shown that it has contractual effect in the first place.26 The usual ways of incorporating an exclusion clause into a contract are by signature, by notice and by course of dealing;27(p. 88) since these principles are of general application and of no particular relevance to cases of delay, there is no need to repeat them here. However, it is worth noting in this context that exclusion clauses may also be incorporated into the contract by implication of law, as with the conventions relating to international contracts of carriage,28 such as the CMR Convention,29 the COTIF Convention,30 the Hague-Visby Rules31 and the Warsaw Convention.32 These conventions, which govern the international carriage of goods by road, rail, sea and air respectively, all contain provisions which limit the liability of the carrier for loss, damage or delay.33 The difference between these terms and those we have just been considering is that they apply as a matter of law,34 without the carrier having to demonstrate that they have been incorporated into the contract or drawn to the attention of the other party.35

(3)  Rules of construction

5.12  The courts have traditionally been suspicious of exclusion clauses, and have in the past sought to limit their effect by using techniques of construction.36 In particular, it has been said that such clauses must be construed strictly according to their terms,37 and that any ambiguity should be read contra proferentem, that is to say, against the party who seeks to rely on the clause.38 However, these techniques are (p. 89) not as important as once they were for two reasons, one being the introduction of statutory controls,39 and the other the general tendency of courts in recent years to adopt a common sense approach to matters of construction rather than using what has been called ‘the old intellectual baggage of legal interpretation’.40 Nevertheless, the principle that clauses of this type should be clear and unambiguous still remains,41 and to that extent at least one can still talk in terms of strict construction in the present context. The relevant principles are well known and are of general application, and there is no need to discuss them at length here.42 However, there are three rules of construction that are of particular relevance to delay, namely: (1) the ‘main purpose’ rule; (2) deviation; and (3) the so-called doctrine of fundamental breach.

(a)  The ‘main purpose’ rule

5.13  Courts are generally reluctant to construe an exclusion clause in such a way as to defeat the main object of the contract.43 To put it another way, exclusion clauses drafted in general terms will not be allowed to defeat the specific requirements of the contract; as is sometimes said, the back of the contract will not be allowed to prevail over the front.44 Thus in Leduc v Ward45 goods were shipped on a vessel bound from Fiume to Dunkirk for delivery at Dunkirk, the contract giving the shipowner liberty to call ‘at any ports in any order’. It was held that the shipowner was not covered when the vessel was sunk in the Firth of Clyde during the course of a deviation to Glasgow. Again, in Connolly Shaw Ltd v A/S Det Nordenfjeldske D/S46 a clause drafted in similar terms was held to cover a shipowner who had deviated to Hull en route from Palermo to London with a cargo of lemons, but it was said that the clause would not have covered a deviation round Cape Horn,47 as this would have frustrated the contract. As a general rule the courts will do all they can to interpret exclusion clauses in a way that is consistent with the main (p. 90) object of the contract,48 but in extreme cases they will not hesitate to disregard particular words or even entire provisions where to do otherwise would render the contract nugatory.49

(b)  Deviation

5.14  There is a long-standing rule relating to contracts of carriage by sea whereby a carrier who deviates from the agreed route cannot rely on exclusion clauses in the contract.50 This applies even where the loss incurred seems to have nothing to do with the deviation. Thus in Joseph Thorley v Orchis SS Co51 a cargo of locust beans was damaged during the course of unloading due to the negligence of the stevedores. It was held that the shipowners were disbarred from relying on an exclusion clause due to the fact that the ship had deviated en route. The rationale seems to be that in such cases the exclusions are only intended to apply to the contract voyage and not to a totally different voyage,52 and this reasoning has been extended to contracts for the carriage of goods by land53 and also to cases where a bailee of goods stores them in a place other than the one agreed.54 Indeed, it has been said that as a general rule exclusion clauses should not be construed as applying to loss or damage caused outside the ‘four corners’ of the contract.55 As we shall see, there is no longer any rule of law preventing a party from relying on an exclusion clause in cases of serious breach,56 and it has been (p. 91) suggested that the deviation cases need to be reinterpreted in the light of this.57 However, it has also been said that they should be regarded as sui generis,58 and if this is so, a carrier who deviates may still be barred as a matter of substantive law from relying on exclusion clauses, at any rate in cases where the owner of the goods chooses to terminate the contract.59

(c)  Fundamental breach

5.15  The cases cited above were used to support a broader principle whereby exclusion clauses were said not to protect a party who had committed a fundamental breach of the contract.60 Thus it was said that exclusion clauses would not protect one who sought to render a contractual performance totally different from that which was contemplated by the parties, as where a seller delivered peas instead of beans,61 or wheat instead of barley,62 or a horse instead of a tractor.63 In the same way an exclusion clause was said not to apply in a case where the promisor deliberately repudiated his or her basic obligations under the contract; say, for instance, a carrier of goods threw them into the sea or gave them away to a passerby,64 or say the captain of a tug threw off the tow, allowing the ship to drift onto the rocks.65 A similar principle was said to apply where the breach had a catastrophic effect. In Bontex Knitting Works Ltd v St John’s Garage66 the claimants hired a van and driver from the defendants to deliver some goods. It was agreed that the delivery would take about two and a half hours, and that the driver should be paid by the hour. The driver collected the goods and then left the van unattended for an hour while he had a meal. During this time the goods were stolen and never recovered. It was held that the defendants could not rely on an exclusion clause protecting them from liability for loss of the goods, on the grounds that the driver had committed a serious breach of the contract. The defendants were under a duty to deliver the goods forthwith, and whilst a break of five minutes to go to the lavatory might have been excusable in the circumstances, a break of a whole hour was totally excessive.67

(p. 92) 5.16  Some of the cases prior to 1980 suggested that the doctrine of fundamental breach was a rule of law barring reliance on exclusion clauses,68 but it is now clear that it is a rule of construction only,69 and that a properly worded exclusion clause can apply even to the most serious breaches. In the light of this it has been suggested that there is no longer even a presumption that exclusion clauses do not extend to cases of fundamental breach,70 but this must be read subject to two qualifications. First of all, clauses which purport to exclude liability for breach altogether, or which give the promisor complete discretion whether or how to perform the contract, must still be construed in line with the main object of the contract, if only because to do otherwise would often make the contract meaningless.71 Secondly, even where the clause merely limits liability, the more serious the breach, the clearer it must be that the clause was intended to cover it.72 To this extent it still makes sense to talk of a doctrine of fundamental breach.

(4)  Statutory controls

5.17  In recent years there have been an increasing number of statutory controls put in place with regard to exclusion clauses, the most important of which are for present purposes the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015. We shall examine each of these in outline before touching on some other relevant statutory controls. All of these provisions are of general application, but we shall concentrate on those parts of them that are relevant to delay in performance.

(a)  Unfair Contract Terms Act 1977

5.18  The focus of the Unfair Contract Terms Act 1977 is on the application of exclusion clauses in English law in the business context.73 The provisions of the Act are wide-ranging and complex, but for the purposes of the present discussion we shall look at four matters: (1) the scope of the Act; (2) the restrictions imposed by the Act, in so far as they are relevant to the problem of delay in performance; (3) the test of reasonableness used in the Act; and (4) contracts excluded from the scope of the Act.

(p. 93) (i)  Scope of the Act

5.19  The Unfair Contract Terms Act 1977 is both narrower and wider in scope than its short title suggests. It is narrower since, as we shall see, it is not concerned with unfair contract terms generally but only, as its long title makes clear, with exclusion clauses. It is wider insofar as it covers non-contractual exclusions, such as notices which purport to exclude liability in tort.74 However, it is with contractual exclusions that we are primarily concerned in the present context.

5.20  Section 1(3) of the Act makes it clear that, with one exception which does not concern us here,75 the relevant controls only apply in relation to business liability, that is to say with liability for breach of obligations arising from things done or to be done by a person in the course of a business or from the occupation of premises used for business purposes of the occupier.76 However, given that private individuals rarely if ever seek to restrict their contractual liability by means of exclusion clauses, this limitation is of little relevance in the present context.77

5.21  As stated above, the Act is generally confined to the control of exclusion clauses, which as we have seen can be of many varieties.78 As Lord Donaldson MR once said, ‘it is a trite fact (as contrasted with being trite law) that there are more ways than one of killing a cat’,79 and the drafters of the Act were therefore well prepared for the various techniques by which a promisor might seek to wriggle out of his or her liabilities. Thus, to the extent that the relevant provisions of the Act prevent the exclusion or limitation of liability, they also prevent: (1) making the liability or its enforcement subject to restrictive or onerous conditions;80 (2) excluding or restricting any right or remedy in respect of the liability, or subjecting a person to any prejudice in consequence of his pursuing any such right or remedy;81 or (p. 94) (3) excluding or restricting rules of evidence or procedure.82 The same restrictions apply equally to terms and notices which exclude or restrict the relevant obligation or duty.83 The Act also controls the use of clauses by reference to which the promisor claims to be entitled to render a contractual performance ‘substantially different from that which was reasonably expected of him’.84 These provisions do not, however, apply to arbitration clauses,85 nor it would seem to agreed liquidated damages clauses.86 It has been said that whether a particular clause is one which purports to exclude or restrict liability under the Act is a question of substance and not of form.87

(ii)  Restrictions imposed by the Act

5.22  The Unfair Contract Terms Act 1977 contains several key provisions restricting the use of exclusion clauses, but the most relevant ones in the present context are sections 2(2) and 3. Section 2(2) says that in the case of loss or damage other than death or personal injury a person cannot exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.88 ‘Negligence’ is defined in this context as including the breach of any obligation arising from the express or implied terms of a contract to take reasonable care or to exercise reasonable skill in the performance of the contract,89 so this might very well apply to a case of delay, say where a carrier of goods failed to deliver on time because the goods had been lost on the way or sent to the wrong destination.90

5.23  Of more relevance to delay is section 3, which applies as between contracting parties other than consumers91 when one of them deals on the other’s written standard terms of business.92 In this context ‘deals’ refers to the making of the deal, irrespective of any prior negotiations.93 Section 3 will clearly not apply where the terms in question are ‘boilerplate’ clauses used by parties of equal bargaining (p. 95) power in a particular trade,94 and it clearly will apply where the standard form in question has been imposed on the weaker party on a ‘take-it-or-leave-it’ basis,95 but difficult questions may arise when one party’s standard terms have been modified to a greater or lesser extent to meet the needs of the other.96 Whether a party deals on the other’s written standard terms of business in any given case is a question of fact,97 and the burden of proof is on the party who argues that this applies to show that this is the case.98

5.24  Assuming that section 3 does apply, three types of clause are targeted. The first of these is clauses which exclude or restrict the promisor’s liability for breach of contract.99 This is of course the most common type of exclusion clause. Next, there are clauses by reference to which the promisor claims ‘to be entitled to render a contractual performance substantially different from that which was reasonably expected of him’.100 A classic example of this in the context of delay would be a clause allowing a carrier of goods undue liberty to deviate from the agreed route, as if a contract for the carriage of goods from London to Southampton allowed the carrier to deviate by way of Glasgow or Aberdeen.101 Finally, there are clauses by reference to which the promisor claims ‘to be entitled, in respect of the whole or any part of his contractual performance, to render no performance at all’.102 This would cover an unreasonable force majeure clause,103 or a clause allowing the promisor to terminate the contract at will.104 Section 3 states that the promisor may not rely on any of these types of clause except in so far as the term in question satisfies the test of reasonableness. It is to this test that we must now turn.

(iii)  The test of reasonableness

5.25  The Unfair Contract Terms Act 1977 controls clauses in two ways. One is the outright ban, by which clauses are deprived of legal effect.105 The other is by subjecting them to a test of reasonableness.106 It (p. 96) is the latter test that is of most importance in relation to delay, as this is the test relevant to both section 2(2) and section 3, both of which provide that the term in question will only be valid in so far as it satisfies the test of reasonableness. What this means in relation to contract terms is explained in section 11(1); the question is whether the term was a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made. This means that an unreasonable exclusion clause may be struck out even if in the circumstances applying at the breach or at the time of the action it would be perfectly reasonable for the promisor to rely on it; it is the term itself which must be considered as a whole.107 It is for those claiming that a contract term or notice satisfies the test of reasonableness to show that it does.108

5.26  Reasonableness is a question of fact,109 and the question of whether a term is reasonable in a given case is one which very much depends on the particular circumstances of that case. For this reason it has been said that reported decisions on the point can have only limited value as precedents.110 Much depends on the approach of the trial judge, and it has been said that though the decision cannot strictly speaking be characterised as an exercise of discretion, an appellate court will be slow to interfere with a decision unless satisfied that it proceeded on some erroneous principle or was plainly and obviously wrong.111 Subject to that there are a number of guidelines provided in the Act and elsewhere for deciding whether a term is reasonable or not.

5.27  First of all we have Schedule 2 of the Act,112 which refers to five criteria to which regard is to be had in particular in deciding whether a term satisfies the test of reasonableness.113 The first is the strength of the bargaining positions of the parties relative to each other, taking into account (amongst other things) alternative means by which the customer’s requirements could have been met.114 (p. 97) Did the customer have any real choice in the matter, or was it a case of either agreeing to the clause in question or doing without the service required? The second is whether the customer received an inducement to agree to the term, or in accepting it had an opportunity of entering into a similar contract with other persons but without having to accept a similar term.115 A term is more likely to be reasonable if the customer received some consideration for agreeing to it, such as a lower price. The third is whether the customer knew or ought reasonably to have known of the existence and extent of the term having regard, amongst other things, to any custom of the trade and any previous course of dealings between the parties.116 Was the clause one with which the customer was or should have been familiar, or was it something unusual or unexpected? The fourth refers to cases where the term excludes or restricts liability if some condition is not complied with, and asks whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable.117 A promisor who makes his or her liability subject to unreasonable or capricious conditions may as well exclude it altogether. The final test relates to the supply of goods, and to whether the goods in question were supplied, processed or adapted to the special order of the customer.118 This last criterion is of less relevance in cases of delay, but the thinking behind it seems to be that a customer to whom the criterion applies should be in a better negotiating position than one to whom it does not.

5.28  Section 11(4) of the Act makes special provision for clauses which purport to restrict liability to a specified sum of money.119 Here regard is to be had in particular to two factors: (1) the resources which the promisor could expect to be available to him for the purpose of meeting the liability should it arise; and (2) how far it was open to him to cover himself by insurance. As has been pointed out, this provision was clearly designed to protect small businesses and professional people from being exposed to liabilities which it was beyond their ability to cover.120 In relation to such clauses it may be relevant to look at other standard form contracts (p. 98) in the trade to see if they restrict liability to a similar degree.121 In many cases either party may have been able to obtain insurance, and the court will then have to ask which of the two was in the best position to do so at a reasonable cost.122 The question addressed by section 11(4) relates to the availability of insurance; whether it was actually taken up is neither here nor there.123

(iv)  Excluded contracts

5.29  A number of contracts are specifically excluded from the scope of all or part of the Unfair Contract Terms Act 1977, and some of these exclusions are of particular importance in relation to delay; indeed, their overall effect would seem to be to exclude from the ambit of the Act most of the reported cases on the topic.

5.30  First of all we have international contracts of sale or supply.124 It was generally thought to be undesirable for the law to control the use of exclusion clauses in this context for a number of reasons; in particular, it was thought that for the law to interfere in these cases would place English exporters under an unfair disadvantage without any discernible benefit, given that such contracts usually involved large transactions between business organisations who were well able to protect their own interests in this regard.125 For this reason section 26 of the Act specifically provides that international supply contracts are not subject to any requirement of reasonableness under section 3.126 For section 26 to apply there are two tests that must be met. First of all, the contract in question must be one for the sale of goods or one under or in pursuance of which the possession or ownership of goods passes, and it must be made by parties whose places of business (or, if they have none, habitual residences) are in the territories of different states.127 Secondly, one of three further requirements must be satisfied: either (1) the goods in question are, at the time of the conclusion of the contract, in the course of carriage, or will be carried, from the territory of one state to the territory of another;128 or (2) the acts constituting the offer and acceptance have been done in the territory of different states;129 or (3) the contract provides for the goods to (p. 99) be delivered to the territory of a state other than that within whose territory the acts were done.130

5.31  As well as this, section 27 of the Act excludes any situation where the law applicable to the contract is the law of some part of the United Kingdom only by choice of the parties, and apart from that choice would be the law of some country outside the United Kingdom.131 The only exception to this is where the term appears to have been imposed wholly or mainly for the purpose of enabling the party imposing it to evade the operation of the Act.132

5.32  By section 29(1) of the Act nothing removes or restricts the effect of, or prevents reliance on, any contractual provision which either: (1) is authorised or required by the express terms or necessary implication of an enactment;133 or (2) being made with a view to compliance with an international agreement to which the United Kingdom is a party, does not operate more restrictively than is contemplated by the agreement.134 The effect of this, among other things, is to remove from the ambit of the Act provisions such as the Hague-Visby Rules and other international conventions such as those relating to the carriage of goods by road, rail and air.135

5.33  Finally, there is Schedule 1 of the Act, which restricts the scope of the Act in relation to various classes of contract136 including contracts of insurance,137 contracts relating to the creation, transfer or termination of an interest in land,138 contracts relating to the creation, transfer or termination of patents or other intellectual property interests,139 contracts relating to the formation or dissolution of companies,140 contracts relating to the creation or transfer of securities or any right or interest in securities,141 contracts of marine salvage or towage,142 marine charterparties143 and contracts for the carriage of goods by ship or hovercraft.144 As well as this, it is stated that section 2 of the Act does not apply to a contract of employment except in favour of the employee.145

(p. 100) (b)  Consumer Rights Act 2015

5.34  The Consumer Rights Act has its origin in an EC Directive adopted in 1993 which sought to lay down minimum standards for the protection of consumers against unfair terms in the Member States.146 At the time there were already legislative provisions in the UK directed towards this end, most notably the Unfair Contract Terms Act 1977, but this was not enough to meet the requirements of the Directive; in particular, the Act as we have seen deals only with exclusion clauses,147 whereas the Directive is concerned with unfair terms generally.148 With a view to complying with the obligations of the UK under the Directive, the Unfair Terms in Consumer Contracts Regulations 1994 were enacted, coming into force the following year.149 Five years later, with a view to complying more closely with the requirements of the Directive, these were repealed and replaced by the Unfair Terms in Consumer Contracts Regulations 1999.150 However, following the recommendations of the Law Commission,151 the decision was made some fifteen years later to implement a unified legislative regime for consumer contracts, and this was duly done in the Consumer Rights Act 2015. As part of this project the 1999 Regulations were repealed and incorporated, with some amendments, into Part 2 of the Act, to which we shall now turn.

(i)  Unfair terms

5.35  Part 2 of the Act is headed ‘Unfair Terms’, and the basic provisions at its heart are section 62(1), which states that an unfair term in a consumer contract is not binding on the consumer, and section 62(2), which makes similar provision for consumer notices. Obviously it is section 62(1) with which we are most concerned.

(ii)  Scope of Part 2

5.36  The scope of Part 2 is set out by section 61(1), which states that it applies to contracts concluded between a trader and a consumer. A ‘trader’ is ‘a person acting (personally or through an agent) for purposes relating to that person’s trade, business, craft or profession’.152 Thus an individual person can be covered as well as a company, so long as he or she is not contracting for purposes unrelated to the relevant ‘trade, business, craft or profession’. A ‘consumer’ is ‘an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession’. Whether this is so is clearly a matter of degree; thus, for instance, a painter who goes out and buys a tin of paint and a packet of cigarettes may be a consumer in relation to the second but not the first.153

(p. 101) 5.37  Two other preliminary points need to be made. First of all, despite the heading to Part 2 it makes provision in relation to contract terms generally, not just those specifically defined as ‘unfair’.154 Secondly, the provisions of Part 2 are both wider and narrower in scope than the Unfair Contract Terms Act 1977. They are wider in that they apply not just to exemption clauses but to unfair terms of all kinds. They are narrower in that they only apply to consumer contracts; in particular no provision is made, as in the Unfair Contract Terms Act, for the non-consumer contract where one party deals on the other’s written standard terms of business.155

(iii)  When is a term unfair?

5.38  According to the Act,156 a contractual term shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.157 This gives rise to three issues, namely: (1) what is meant by ‘the requirement of good faith’; (2) what is meant by ‘a significant imbalance’; and (3) what is the rule that excludes the core terms of the contract from scrutiny on the grounds of unfairness.

5.39  The requirement of good faith in the contractual context is one familiar to civil lawyers, but causes difficulties of interpretation when transplanted into the common law context. The principle has been described in the House of Lords as one of ‘fair and open dealing’,158 one which ‘looks to good standards of commercial morality and practice’.159 According to the terms of the Directive upon which these provisions are based, the factors relevant to good faith include ‘the strength of the bargaining positions of the parties, whether the consumer had an inducement to agree to the term and whether the goods or services were supplied to the special order of the consumer’.160 As we have seen, these very tests are used in the Unfair Contract Terms Act 1977 to define whether a term satisfies the test of reasonableness,161 and to this extent the concepts of good faith and of reasonableness can be seen to overlap, even if they are not identical in scope.162

5.40  The Act does not expressly define what is meant by a ‘significant imbalance’.163 However, the Directive states that the assessment, according to the general criteria chosen, of the unfairness of the terms, in particular in sale or supply activities (p. 102) of a public nature providing collective services which take account of solidarity among users, must be supplemented by a means of making an overall evaluation of the different interests involved,164 and this has been said to indicate that the test of significant imbalance is not to be applied in a rigid and mechanical fashion.165 According to Lord Bingham, the requirement as to significant imbalance is met if the term in question is ‘so weighted in favour of the supplier as to tilt the parties’ rights and obligations under the contract significantly in his favour’.166 This may be done by the granting of a beneficial option or discretion or power, or by the imposing on the consumer of a disadvantageous burden or risk or duty.167

5.41  The Act also makes it clear that the unfairness of a contractual term has to be assessed taking into account the nature of the goods and services for which the contract was concluded, and by referring, at the time when the contract was concluded, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it was dependent.168 As well as this, Schedule 2 gives a useful list of terms which may be regarded as unfair and which may therefore be presumed to have that effect; these will be discussed more fully below.169

5.42  The Act is concerned with unfair terms in consumer contracts rather than with unfair contracts as such, and section 64(1) provides that, in so far as it is transparent170 and prominent,171 the assessment of the fairness of a term shall not relate to the definition of the main subject matter of the contract,172 or to the adequacy of the price or remuneration, as against the goods or services supplied in exchange.173 The first part of this provision may cause difficulties with the kind of exception clause that works by delimiting the extent of the promisor’s duty,174 for instance a clause giving a carrier liberty to deviate from the direct route,175 or a clause which states that a key date in the contract is only intended to (p. 103) be approximate,176 or a clause in an insurance contract which purports to define the insurer’s liability in restrictive terms.177 However, these difficulties should not be overstated. In particular, section 64(1) only applies where the term is in ‘plain intelligible language’, so it would not apply where the term in question was ambiguous or obscurely worded.178 The courts have also made it clear that they are fully aware of these problems, and that they will not interpret these exceptions in such a way as to frustrate the object of the Act as a whole.179

(iv)  Effect of unfairness

5.43  The rules for defining when a term is unfair for the purposes of the 2015 Act are complex, but once a term is found to satisfy that criterion the consequences are simple: the term in question is not binding on the consumer,180 but the contract shall continue, so far as practicable, to have effect in every other respect.181 This causes no difficulty where the term is ancillary to the main part of the contract, but difficult questions may arise where a term is so essential that the effect of its not being binding on the consumer is to render the contract totally unworkable.182 In that sort of situation the implication is that the contract shall not continue to bind the parties, and if this is so the unfairness of the term may result in the contract being effectively rescinded in toto.

5.44  So far we have been considering the effect of the unfair term on the parties to the contract. The 2015 Act also contains provisions designed to combat unfair terms on a broader front.183 In particular, powers are given to the Competition and Markets Authority184 and to other consumer protection bodies185 to consider complaints about standard form contracts, and where it appears that any term in such a contract is unfair an injunction may be issued against those responsible186 and undertakings sought as to their future conduct.187

(p. 104) (v)  Schedule 2: the ‘grey list’

5.45  Schedule 2 Part 1 of the Act sets out an ‘indicative and non-exhaustive list of terms which may be regarded as unfair’.188 The crucial word here is ‘may’; it is nowhere stated that terms included on the list are deemed to be unfair, but inclusion of a term on the list raises a strong inference that in most circumstances a clause of this kind should be treated as unfair.189 Schedule 2 has therefore been aptly described as not so much a black list as a grey list.190 Many of the items on the list are not exclusion clauses at all,191 but it includes terms which purport to exclude liability for death or personal injury,192 or for loss caused by breach of contract generally,193 or which enable the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided,194 or which exclude or restrict the remedies of the consumer in the event of default.195

(vi)  Excluded terms and excluded contracts

5.46  Just as various categories of contract are excluded from the ambit of the Unfair Contract Terms Act 1977,196 Part 2 of the 2015 Act also contains exclusions of a similar kind, though these are much narrower in scope. These include contracts of employment or apprenticeship,197 mandatory statutory or regulatory provisions,198 and the provisions or principles of international conventions to which the Member States or the EU are party.199 The third of these is of particular importance, as it excludes from the ambit of Part 2 the provisions of the conventions for the international carriage of goods by road, rail, sea or air, at least in so far as these apply to a consumer contract.200

(c)  Other statutory controls

5.47  It is also important to take note of the conventions governing the international carriage of goods, many of which contain detailed provisions for the liability of the carrier for loss or damage, including loss caused by delay.201 Up to now we have been looking at these in so far as they provide for circumstances in which that liability is excluded or limited,202 and we have seen that these exclusions or limitations are not subject to the general legislative control applied to (p. 105) such clauses generally.203 However, the corollary of this is that any contract terms which purport to exclude the carrier’s liability under the relevant convention are invalidated. Thus for instance Article III of the Hague-Visby Rules204 lays various duties on the carrier, including the duty to exercise due diligence to make the ship seaworthy,205 and the duty to take due care in the loading and discharge of the cargo.206 It then goes on to state that any ‘clause, covenant or agreement’ which purports to exclude or limit the carrier’s liability as prescribed by the Article ‘shall be null and void and of no effect’.207 Similar provisions can be seen in the CMR Convention208 and in the Warsaw Convention.209 The upshot of this to ensure that the carrier’s liability in contracts to which these conventions apply is as prescribed by the convention in question, no more and no less.

B.  Consent of Promisee

5.48  A promisor who has failed to perform on time may argue that the promisee consented to the delay. Such consent can operate in a number of ways, depending on whether it was backed by consideration, or by reliance, or by neither of these factors. In the pages which follow we shall examine four doctrines which are of relevance in the present context, these being discharge by agreement, variation, waiver and estoppel.

(1)  Discharge by agreement

5.49  A contract may be discharged by mutual agreement.210 Where this has taken place following a delay, the promisor is no longer bound to perform on time, and the promisee relinquishes any remedies that he or she may have for any delay that has already occurred. We shall now examine when this occurs, and consider its legal implications.

(a)  How is a contract discharged by agreement?

5.50  Discharge by agreement may be in express terms,211 but it is also open to a court to infer that the parties have agreed to abandon the contract where it is followed by a prolonged period of delay or inactivity on both sides.212 So in Pearl Mill Co Ltd v (p. 106) Ivy Tannery Ltd213 the defendants agreed to sell to the plaintiffs a quantity of skins ‘delivery as required’. After a few deliveries the plaintiffs made no more orders, their manager having forgotten about the contract. Over the next three years the plaintiffs placed orders elsewhere, and then finding themselves in difficulties sought to hold the defendants to the original contract. But the court held that the contract had been effectively rescinded, on the ground that it was reasonable after such a long lapse of time to conclude that the contract had been abandoned, and the plaintiffs had led the defendants by their conduct to believe that this was so.

5.51  This same reasoning was used in a line of cases in the 1980s dealing with arbitration contracts. In these cases a claim was made and then submitted to arbitration, but was then allowed to lie dormant, the claimant being unwilling to pursue it but disinclined to withdraw it either. The question then arose whether it was open to the claimant to revive the claim after a protracted interval. This would have been very inconvenient for the respondent, since records might have been thrown away, or essential witnesses might be no longer available. In these circumstances it would obviously be unjust to allow the claimant to pursue such a stale claim, but at the time the courts had no inherent power to strike out an arbitration claim,214 as opposed to an ordinary civil claim,215 for want of prosecution.216 One way round the problem was to say that the contract had been terminated; the claimant had led the other to believe that the claim had been abandoned and the other had relied on the belief in some way,217 and this approach was adopted by the Court of Appeal in The Splendid Sun218 and by the House of Lords in The Hannah Blumenthal.219

5.52  The difficulty with applying this analysis to cases of delay was highlighted by the Court of Appeal in The Leonidas D.220 Since there would have been no express agreement to rescind, one would have to be inferred from the conduct of the parties. However, mere inactivity on either side could not constitute the necessary conduct,221 it would be difficult to find consensual abandonment in the absence of proof of an intent to abandon,222 and mere silence would often be equivocal, (p. 107) being equally consistent with the claimant having forgotten the arbitration as with a decision to abandon it.223 Notwithstanding these technical difficulties, there were some bold decisions on the subject,224 but the problem was eventually solved in another way by giving the court a statutory power to strike out arbitration proceedings in such cases.225

(b)  The problem of consideration

5.53  One of the main problems in this area is that the common law insists on the existence of consideration for the discharge of a contract no less than for its creation.226 So a mere agreement by the promisee to release the promisor from his or her contractual obligations is not binding in the absence of consideration to support it.227 There is no problem here where both parties still have obligations outstanding under the contract, for in that case each party’s agreement provides the consideration for that of the other: the agreement to rescind is said to ‘generate its own consideration’.228 But what if the contract is fully executed on one side? Here the party who has not yet performed may provide consideration by returning any benefit provided by the one who has – for instance, a buyer of goods already delivered may agree to return them to the seller229 – but otherwise separate consideration has to be provided; as it is said, there must be both ‘accord’ and ‘satisfaction’.230 Like any other consideration, such satisfaction can be either executed or executory,231 but some consideration there must be, otherwise the agreement to release the promisor will be unenforceable, as a purely gratuitous undertaking.232

(c)  Effect of discharge by agreement

5.54  Where discharge by agreement takes place, the contract is abandoned in toto. It cannot be revived;233 all the parties can do is to make a completely fresh contract (p. 108) relating to the same subject-matter.234 This means that a promisor who seeks to argue on these lines in a case of delay is not saying merely that he or she does not have to perform on time, or is no longer liable for having failed to do so; rather, the argument involves saying that the contract is at an end, and that neither party is bound by it any more. For this reason discharge by agreement is a very crude argument to rely on, and together with the problem of showing consideration this makes it of limited value as an excuse for delay.

(2)  Variation

5.55  Variation occurs when the terms of the contract are validly modified in some way. The contract is amended and not abandoned in toto. Variation can take place in two ways: it may be permitted by the terms of the contract itself, or may be brought about by the subsequent agreement of the parties.

(a)  Variation provided for by the contract

5.56  A contract may contain provisions allowing for its terms to be amended if certain conditions are met. The most obvious example of this is where a construction contract contains a clause giving power to the architect to order ‘variations’.235 Under such clauses the architect can instruct the contractor either to do extra work or indeed to omit work, though the work cannot be taken away from the contractor and given to someone else.236 In such cases the contractor will generally want to claim extra payment. However, it has been held that this cannot be demanded unless the contractor can prove an express or implied contract to that effect.237 This can be done either by showing that the work was properly ordered under a term in the original contract providing for extra payment,238 or that there is a fresh contract to pay for the work in question.239

5.57  Another situation which is of particular significance in the present context is where a construction contract allows for extensions of time.240 As we shall see later, such contracts generally provide for the payment of liquidated damages by (p. 109) the contractor who fails to complete the work on time,241 but these are not payable where the delay was due to extra works ordered by the employer.242 For this reason, as well as for the protection of the contractor, such contracts often contain a provision allowing for extensions of time to be granted by the architect,243 and where this is done liquidated damages are then payable as from the substituted date.244

5.58  In this sort of situation the power to vary the terms of the contract is given to a third party, but it is perfectly possible for a contract to provide for its terms to be varied by one of the parties to it, as where a creditor is allowed to vary the rate of interest payable by the debtor.245 However, such terms are regarded with suspicion by the courts, and will not be interpreted in such a way as to give the party in question complete carte blanche to alter the terms of the contract at will.246 As well as this, they may very well fall foul of statutory controls, at any rate in the consumer context.247

(b)  Variation by subsequent agreement

5.59  In other cases the parties may agree to vary the terms of a contract after it has been concluded. As in the case of discharge, this can only be done by mutual agreement; a mere unilateral notification will not suffice in this context.248 Even where the parties are in agreement, however, the variation may fail to be effective for want of consideration.249 When the proposed variation is capable of benefiting both parties, there is no problem; once again the variation is said to ‘generate its own consideration’.250 But where it is purely for the benefit of one party, the variation (p. 110) is unenforceable unless some extra consideration is provided to support it.251 The fact that the party benefiting from the variation may still have obligations to perform under the contract is neither here nor there, since an agreement to do so is no more than an agreement to do what the party in question was already bound to do anyway.252 However, the well-known case of Williams v Roffey Bros & Nicholls (Contractors) Ltd253 shows that the courts are ready in such cases to find consideration if the variation is in practical terms beneficial to both parties and not extracted by undue pressure.254 In that case a contractor’s promise to pay a subcontractor extra money for completing the work on time was held to be binding and supported by good consideration; the subcontractor was in financial difficulties at the time, and if he had failed to finish the work the main contractor would have been placed in default and would then have had to pay heavy sums by way of liquidated damages under the head contract. The same reasoning might very well be used in relation to an agreement to extend the time of performance, especially where the choice was between late performance and no performance at all.

(c)  Effect of variation

5.60  The effect of a valid variation is that the contract continues in force subject to the amendments in its terms made by the variation. It is therefore far less crude in its effects than rescission, and is to that extent more suited to dealing with the situation where the promisee agrees to let the promisor perform late. However, its main disadvantage is the need to show good consideration, and this makes it a less attractive argument for the promisor in this kind of situation.255

(3)  Waiver

5.61  Waiver is a rather amorphous concept in the law of contract covering a number of situations with no obvious common rationale. The term ‘waiver’256 is used in a number of different ways,257 but as Lord Goff explained in The (p. 111) Kanchenjunga,258 it covers two situations, one being ‘a forbearance from exercising a right’ and the other ‘an abandonment of a right’.259 The first of these arises where a promisee allows the promisor to perform in a manner other than that specified in the contract; this is sometimes called ‘waiver by forbearance’.260 The second covers the situation where the promisee with a choice of remedies opts for one rather than another; this is sometimes called ‘waiver by election’.

(a)  Waiver by forbearance

5.62  Waiver by forbearance occurs when the promisee agrees to accept a substituted performance, as where a buyer of goods agrees to extend the date for delivery, or to allow the seller to deliver the goods at some place other than that specified in the contract. In some cases this will be done for the benefit of the promisee, and here it is clear that the promisee cannot then turn round and seek to enforce the contract according to its terms. This is what happened in Levey & Co v Goldberg,261 where a buyer of goods requested the seller to withhold delivery of the goods, and then sought to reject them on the ground that they had not been delivered on time. Not surprisingly, the court rejected the argument that the waiver was unenforceable for want of form, and held that in the circumstances the buyer was bound to accept the goods. Here the delay in delivery was at the promisee’s request, but more often it is the promisor who tells the promisee that he or she will not be able to perform on the date set, and requests further time. If the promisee agrees to this, is it binding? The problem here is that there is no consideration for the promisee’s agreement. The promisor is doing nothing more than he or she is already bound to do; indeed, by performing late he or she is in some sense doing less.262

5.63  Despite these problems, the common law did give some effect to the forbearance, as is demonstrated by the case of Tyers v Rosedale and Ferryhill Iron Co.263 In this case the sellers contracted to deliver a quantity of iron to the buyers over the year 1871 in twelve monthly instalments. After the first delivery, the buyers asked the sellers to suspend deliveries for a period, and this was duly done. Then in December 1871 they called on the sellers to deliver the entire balance of the iron. The sellers refused to deliver more than the normal monthly quantity, and the (p. 112) question then arose as to the effect of the buyers’ previous request. It was held that the sellers were still bound to deliver the balance of the iron, though not necessarily all in one batch. The sellers having acquiesced in the suspension, they were not entitled to insist on the contract being performed strictly according to its terms. All they were entitled to was to be given a reasonable time to deliver the balance of the goods.264 In this case it was the date of performance that was postponed, but the same principle was applied to a seller who acquiesced in payment under a non-conforming letter of credit,265 and to a buyer who allowed the goods to be delivered to a destination other than the one named in the contract.266

5.64  The principle was further considered in Hartley v Hymans,267 in which the sellers agreed to deliver a quantity of cotton, delivery to begin in September 1918 and to continue at a specified rate thereafter. The buyers were entitled to cancel the contract if the goods were not all delivered on time. The sellers fell behind in their deliveries, but the buyers continued to press for performance both before and after deliveries should have been completed in November 1918. Eventually they purported to cancel the contract in March 1919. It was held by McCardie J that though time was of the essence here, the buyers had waived their rights. The buyers had led the sellers to believe that they were not insisting on prompt performance of the contract; the sellers having acted on that basis at great expense to themselves, the buyers could not be allowed to turn round and enforce the contract according to its terms.268 A similar line of reasoning was used in The Petrofina,269 where shipowners had been accustomed to accept payment of monthly instalments of charter hire by cheque, despite the express provision of the charterparty that hire had to be paid by cash in advance. It was held that the owners could not terminate the charterparty on the ground of late payment without giving the charterers a proper opportunity to put matters right; the owners had plainly manifested their willingness to accept a substituted method of performance, and could not, when payment was made in the accepted manner, take advantage of some provision in the contract which gave them a remedy in default of payment.270

5.65  Waiver by forbearance differs from discharge by agreement and from variation in that it does not irrevocably alter the rights of the parties under the original contract. (p. 113) In particular, it seems that the promisee will be entitled to withdraw the waiver and insist once again on performance in accordance with the contract, provided that proper notice is given to the promisor.271 It has also been said that waiver by forbearance does not exist as a separate doctrine, and that the cases can all be explained as cases of equitable estoppel.272 This may very well be so, and certainly there is a considerable overlap between the two doctrines,273 but there are two reasons for treating them as separate in the present context. First of all, the doctrines have a distinct pedigree, and though some of the later cases do cite Hughes v Metropolitan Railway274 and other authorities based on equitable estoppel, by no means all of them do.275 Secondly, the emphasis of the two doctrines is different; the essence of equitable estoppel, as we shall see, is on the conduct of the party for whose benefit the forbearance is made, whereas in waiver by forbearance the main emphasis is on the conduct of the party who makes the forbearance.276

(b)  Waiver by election

5.66  The essence of waiver by election, as Lord Goff explains in The Kanchenjunga,277 is that a party with inconsistent rights or remedies chooses to exercise one rather than another.278 In this situation he or she cannot blow hot and cold; ‘a party to a contract may not both approbate and reprobate’.279 The most obvious example of this is where the promisor has committed a serious breach amounting to repudiation: either a breach of ‘condition’280 or some other breach going to the root of the contract.281 In this situation the promisee has a choice; he or she can either terminate the contract or affirm it.282 If the promisee chooses to terminate, or as (p. 114) is sometimes said ‘accept the repudiation’, the right to insist on further performance is lost; the primary obligation of the promisor to perform lapses, and is replaced by a secondary obligation to pay damages.283 But if the promisee chooses to affirm, the contract remains fully binding on both sides,284 and the promisee cannot turn round later and terminate without giving the promisor another opportunity to perform.285 This is obviously of great relevance to a case of delay. Take a case where the promisor has agreed to deliver goods at a certain date, time being of the essence of the contract. If the goods are delivered late, the promisee can reject them and terminate the contract, but if he or she decides to affirm, say by continuing to press for delivery, then the right to terminate is lost.286 The promisor must be given another chance.287

5.67  In order for waiver by election to take place in this situation the promisee must be aware of the facts giving rise to the right to terminate.288 The waiver can be communicated to the other party by words or conduct, but such communication must be in ‘clear and unequivocal terms’.289 In some cases it will be obvious that the promisee has chosen to terminate; for instance he or she may give the promisor express notice to that effect,290 or may refuse to perform the contract further,291 or may make another contract inconsistent with the previous one.292 In other situations the promisee’s conduct will be consistent only with affirmation, (p. 115) as where he or she continues to press for performance,293 or does some other act indicating that the contract is still on foot.294 What if the promisee does nothing to give any indication one way or another? Obviously he or she must be given a reasonable amount of time to decide how to react to the breach,295 and in some cases a period of inactivity may be enough to indicate to the promisor that the promisee no longer intends to be bound by the contract,296 but some indication there must be, otherwise the promisor will be entitled to assume that the contract is still in force.297

5.68  The effect of waiver by election in this situation is that the right in question is lost and cannot be revived without the promisor being given another chance to perform. This is well illustrated by the facts of Charles Rickards Ltd v Oppenhaim,298 where a firm of car dealers agreed to deliver a Rolls-Royce chassis, which was to be fitted out and delivered to the customer by 20 March 1948. The car was not delivered on time, but the customer continued to press for delivery. On 29 June the customer told the dealers that if the car was not delivered in four weeks he would not accept it. In fact it was not ready until October, by which time the customer had had enough, and refused to take it. The Court of Appeal held that the customer was entitled to reject the car. Time was originally of the essence, and the customer could have terminated at once for failure to deliver on the agreed date. This right had been lost by waiver, and could not be revived without giving the dealers another chance to perform. However, when they still failed to deliver, the customer was entitled to serve a notice making time of the essence (p. 116) once more;299 when this fresh deadline was still not met, the contract could then be terminated.

5.69  Like waiver by forbearance, waiver by election has often been compared to equitable estoppel. However, as Lord Goff points out in The Kanchenjunga, there are important differences as well.300 In particular, waiver by election does not require proof of any degree of reliance; rather, the principle is, as we have seen, that the party in question is not allowed to blow hot and cold, but must decide as to which of two inconsistent rights to pursue.301 As well as this, though both waiver by election and equitable estoppel are based on the notion of an express or implied representation, the representation in the two cases is different in character. In the case of an election, the party concerned is making a representation as to the present – that is to say, as to his or her choice whether or not to exercise a right that already exists. In the case of equitable estoppel, the representation is as to the future; that is to say, the party concerned is representing that he or she will not enforce certain rights.302 Indeed, that is why it is sometimes called ‘promissory’ estoppel.

(4)  Equitable estoppel

5.70  The essence of equitable estoppel was set out by Lord Goff in The Kanchenjunga as follows:303

Equitable estoppel occurs where a person, having legal rights against another, unequivocally represents (by words or conduct) that he does not intend to enforce those legal rights; if in such circumstances the other party acts, or desists from acting, in reliance upon that representation, with the effect that it would be inequitable for the representor to enforce his legal rights inconsistently with his representation, he will to that extent be precluded from doing so.

5.71  The fons et origo of equitable estoppel is seen in the case of Hughes v Metropolitan Railway,304 decided in 1877. In this case a lease contained a provision for forfeiture if repairs were not done. The landlord served a notice requiring such repairs to be done within six months, but then entered into negotiations with the tenant for the purchase of the lease. When the negotiations broke down, he sought to forfeit the lease on the ground that the six-month period had now expired and the tenant had not done the repairs. But the claim was rejected. In the words of Lord Cairns:305

It is the first principle upon which all courts of equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results – certain penalties or legal forfeiture – afterwards by their own conduct enter on a course of (p. 117) negotiation which has the effect of leading one of the parties to suppose that the strict rights under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.

In the same way in Central London Property Trust v High Trees House Ltd,306 Denning J, as he then was, referred to promises which were intended to create legal relations, and which, to the knowledge of the person making the promise, were going to be acted on by the person to whom they were made, and which were in fact so acted on, saying that in such cases the promise should be honoured.307 Though he denied that these were really cases of estoppel, the title ‘equitable estoppel’ or ‘promissory estoppel’ is now commonly used for situations of this sort. The doctrine is frequently relied on where a promisee under a contract308 indicates that he or she will not insist on strict performance, and the promisor acts in reliance on the promise. To what extent will the promise be enforced? In this situation we need to consider both the requirements of equitable estoppel and its effect.

(a)  Requirements of equitable estoppel

5.72  According to Robert Goff J as he then was, in BP Exploration Ltd v Hunt,309 the principle of equitable estoppel presupposes three things: (1) a legal relationship between the parties; (2) a representation, express or implied, by one party that he will not enforce his strict rights against the other; and (3) reliance by the representee (whether by action or by omission to act) on the representation, which renders it inequitable, in all the circumstances, for the representor to enforce his strict rights, or at least to do so until the representee is restored to his former position.

(i)  A pre-existing legal relationship

5.73  The first requirement mentioned by Robert Goff J is that there must be some legal relationship between the parties.310 In most cases this will be a contractual relationship, but this need not necessarily be so.311 Where there is no such relationship, the doctrine cannot operate; still less can it be used to create such a relationship where none existed before.312

(p. 118) (ii)  A promise or representation

5.74  Next, there has to be a promise or representation that the contract will not be enforced according to its terms. In some cases this will be in express terms, but in some cases, as in Hughes v Metropolitan Railway itself, it will be sufficient that a reasonable person in the shoes of the representee would have inferred that the representor did not intend to insist on strict compliance with the contract.313 However, the facts must point to a promise or representation of some sort.314 Thus in The Scaptrade315 the fact that shipowners had acquiesced in the late payment of hire on past occasions was held not to debar them from withdrawing the ship on that ground, since they had never expressly or impliedly represented that they would not insist on punctual payment. In the same way, in The Laconia,316 another charterparty case, the fact that the shipowners’ bank had accepted a late payment of hire was held to be insufficient, since the bank had no authority to make any kind of promise or representation so as to bind the owners.

5.75  As in the case of waiver, the promise or representation has to be clear and unequivocal.317 Thus in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd318 an attempt by buyers to argue that the sellers had agreed to allow payment in sterling rather than in the currency specified in the contract was held not to give rise to an equitable estoppel, since it was not clear whether the agreement related to the currency of account or merely the currency of payment. In the same way it was held in The Post Chaser319 that the buyers under a c.i.f. contract had not waived their rights simply by failing to object to a late declaration of the vessel by the sellers; this was not enough, it was said, to amount to the necessary unequivocal declaration by the buyers that they did not intend to enforce their strict rights.

5.76  One of the purposes of this requirement that the promise or representation be clear and unequivocal is said to be to prevent a party from losing his or her legal rights under a contract merely by failure to insist on strict performance of the contract at all times, or by granting some other indulgence. To what extent will a promisee who accepts late performance be deemed to have represented that they (p. 119) do not intend to enforce the contract according to its strict terms? Sometimes the cases are not easy to reconcile. Thus in The Petrofina320 it was held that shipowners who had allowed the charterers to pay the monthly instalments of hire by cheque rather than by cash in advance as stipulated by the contract could not withdraw the ship on this ground without giving the charterers proper notice that they intended to insist on their strict contractual rights from now on; in effect, the accepted method of payment under the charterparty had been modified. In The Scaptrade,321 by contrast, it was held by Lloyd J at first instance that the mere fact that the shipowners had accepted late payments of hire in the past did not imply any representation to the charterers that they did not intend to enforce the contract according to its terms. In Hazel v Akthar322 the defendant applied for a new tenancy under Part II of the Landlord and Tenant Act 1954, but the application was opposed by the landlords on the ground that the tenant had been guilty of persistent delay in paying the rent when due. It was held that the landlord was estopped from relying on this ground, as the delays were not serious in nature, and had been perfectly acceptable to the previous landlords. It was therefore not open to the present landlords to penalise the tenant on this ground when they had not given him sufficient notice of their intention to insist on prompt payment from now on. Three factors seem to be relevant in the present context. First of all, there is the question of consistency. A mere acceptance of late performance will not give rise to equitable estoppel unless it is sufficiently systematic to indicate a change in the way the contract is performed. Secondly, there is the relative strength of the parties. The courts will be more inclined to make allowances for a private individual dealing with a business than in a case where two businesses are dealing at arm’s length. Thirdly, there is the nature of the contract. In commercial contracts, where time is often of the essence, equitable estoppel will be harder to establish than in the property context, where prompt performance is of less significance.

(iii)  Reliance

5.77  The key element of equitable estoppel, and the one which distinguishes it from waiver in the strict sense, is the requirement of reliance; the representation or promise must, in the words of Denning J, have been ‘acted on’. We have seen how in Hughes v Metropolitan Railway323 this requirement was satisfied when the tenants allowed the deadline for the repairs to pass while they negotiated with the landlords for the sale of the lease. Similarly, in Hartley v Hymans,324 sellers of cotton yarn were held to have acted in reliance on the buyers’ indication that they would accept late delivery by continuing to place orders with their suppliers, since the yarn in question was of a special kind and not suitable for sale on the general (p. 120) market. But where no such reliance can be shown, the doctrine of equitable estoppel will not operate. Thus in Avimex SA v Dewulf & Cie325 a buyer of goods was held not to have waived his rights by acceptance of a defective force majeure notice in the absence of any indication that the seller had acted on the faith of this acceptance, say by appropriating goods to the contract. In the same way, the charterers in The Scaptrade326 were held not to have demonstrated any degree of reliance in failing to pay instalments of hire on time, despite the fact that this was done without any objection from the owner. No doubt they would have paid promptly if they had been warned that the owners were about to withdraw the vessel, but this was not enough.327

5.78  Some of the cases seem to suggest that mere reliance will not be enough unless it is accompanied by some degree of ‘detriment’. In The Post Chaser328 the sellers under a c.i.f contract failed to declare a vessel on time as required by the contract. The buyers, however, made no protest about this, and later requested the sellers to present the shipping documents. It was held that this request did not amount to an unequivocal declaration by the buyers that they did not intend to rely on their rights,329 and that even if it did, the sellers had not shown the necessary reliance. They had indeed relied on the buyers’ request to the extent that they had conducted their affairs in accordance with it, but they had suffered no detriment by doing so and it was therefore not inequitable for the buyers to resile from their promise.330 The requirement of detriment has been stated in other cases as well,331 but it was denied by Lord Denning MR,332 and is said to be based on a misleading analogy.333 The point is not of great importance at the end of the day. In cases where no detriment has been suffered by the party concerned, it will generally not be inequitable for the other to go back on the promise or representation in question; and if it would be so inequitable, the courts are not going to hold the doctrine inapplicable for lack of detriment.334

(p. 121) (b)  Effect of equitable estoppel

5.79  The doctrine of equitable estoppel creates no new causes of action where none existed before;335 in that sense, it is said to be a shield and not a sword.336 Rather, the effect is, in the words of Lord Cairns, that a person who otherwise might have enforced his or her rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.337 Such a person may be deprived of a cause of action,338 or of a defence that he or she would otherwise have had,339 but there is no independent right to enforce the promise.340 This limitation is of no significance in the present context, but there are two other aspects of the matter that need to be considered. First of all, when is it inequitable to allow someone to enforce his or her rights in this situation? Secondly, to what extent can the party concerned resume these rights for the future?

(i)  Inequitable to enforce rights

5.80  Normally it would be inequitable to allow someone to go back on a promise or representation he or she has made, especially where that promise or representation has been acted on by someone else. However, there are cases where this will not apply. For instance, the promise may have been procured by threats or undue pressure, as in D & C Builders v Rees,341 where the debtors of a small business, knowing that the business was in financial difficulties, prevailed on them to accept part payment on the basis that otherwise they would get nothing at all. Again, a promisee who agrees to allow the promisor to perform late may be justified by subsequent events in resiling from that undertaking. In Williams v Stern342 the plaintiff gave the defendant a bill of sale as security for a loan, under which certain furniture could be seized if the loan was not paid on time. The plaintiff asked for extra time to pay, and the defendant agreed to this, but then, hearing that the plaintiff’s landlord intended to distrain on the property, he went ahead and seized the furniture. It was held that in the circumstances it was not inequitable for the defendant to act as he did. In the present context it is also relevant, as we have seen, to ask to what extent the representee under the contract has changed position in reliance on the representor’s undertaking not to enforce his or her contractual rights. Where the representee has incurred some degree of detriment it will generally not be equitable to allow the representor to (p. 122) resile from that undertaking, but this may not be so where the representee has not been prejudiced in any way by relying on it. This is what happened in The Post Chaser,343 where the buyers under a c.i.f. contract called on the sellers to present the shipping documents despite the fact that the vessel had not been nominated in time as required by the contract. Shortly afterwards the contract was terminated by the buyers on the ground of the delay, but it was held that though the buyers’ request may have led the sellers to believe that the buyers had decided to overlook the late nomination, they had not been prejudiced as a result.344

(ii)  Resumption of rights by representor

5.81  Where a contract is discharged by agreement or altered by variation, the effect is permanent: the promisee can no longer insist on the promisor performing according to its terms.345 But where the alteration is by way of waiver or equitable estoppel, the cases establish that the representor can generally resume his or her position by giving due notice to the representee.346 Thus, a buyer who agrees to accept late delivery can give the seller a new deadline,347 and where the contract calls for performance by instalments the representor can insist that from now on the contract must be performed strictly in accordance with its terms.348 However, in cases where it is impossible or impracticable to restore the representee to his or her original position the doctrine may serve to extinguish the representor’s rights altogether.349 The reason for the general rule is said to be the discretionary nature of the equitable jurisdiction; the court is allowed to give such relief as is just and equitable in all the circumstances, and in most cases of this sort it would be neither just nor equitable to treat the representor’s rights as being totally extinguished.350

C.  Prevention by Promisee

5.82  The promisor will obviously have a good excuse for the delay when timely performance was prevented by the act of the promisee.351 To adapt the words of (p. 123) Tindal CJ, where the promisee himself has occasioned the breach of contract, that is a good answer to any complaint founded on that breach, in so far as the act complained of is the act of the promisee rather than the promisor: the promisor may say, ‘This is your own act, and therefore you are not damnified.’352 In Jones v Barkley353 the plaintiff covenanted with the defendant to execute a release; he duly offered to do so, and tendered a draft for the defendant’s perusal, but the defendant refused to look at it and said that he would have no more to do with it. It was held that the plaintiff was discharged from his duty to perform. The same reasoning was said to apply to a case where A covenants with B to build a house on his land, and B refuses to allow him onto the land to do the work.354 In all these cases the promisor is excused in so far as his or her performance is prevented by the act of the promisee.

5.83  This principle has often been relied on in relation to construction contracts. In the words of Coulson J, the essence of the prevention principle in this context is that the employer cannot hold the contractor to a specified completion date if the employer has, by his own act or omission, prevented the contractor from completing by that date.355 The effect of this is said to be that time is now ‘at large’; the completion date no longer applies, with the result that the contractor need only complete within a reasonable time.356 Needless to say, this rule could have catastrophic consequences for a construction project, and for this reason most contracts in this field include provision for extensions of time to be granted in this sort of situation.357 In relation to this, three general principles were laid down by the Technology and Construction Court in Multiplex Constructions Ltd v Honeywell Control Systems Ltd,358 a case involving delays to a subcontractor involved in the construction of the new Wembley Stadium. According to Jackson J, three propositions were derived from a review of authority:359 (1) actions by an employer which were perfectly legitimate under a construction contract might still be characterised as prevention if those actions caused delay beyond the contractual completion date; (2) acts of prevention by an employer did not set time at (p. 124) large if the contract provided for extension of time in respect of those events; and (3) in so far as an extension of time clause was ambiguous, it should be construed in favour of the contractor. Since, however, it was held that the variations ordered by the claimant fell within the ambit of the clauses in question, it was held that the claimant was entitled to a declaration to that effect.

5.84  These principles were applied to a shipbuilding contract in Adyard Abu Dhabi LLC v SD Marine Services,360 where the buyer of a ship sought to terminate the contract following lengthy delays by the shipbuilders. The shipbuilders sought to shelter behind the prevention principle, saying that the delays were due to variations ordered by the buyer. However, this defence was rejected by the court, on the ground that the contract provided for extensions of time in this situation,361 and that the only reason why an extension had not been granted was that the shipbuilders had not applied for one as specified by the contract.362 Moreover, for the prevention principle to apply a causal link had to be shown between the variations and the delay; in this case the project was already in irretrievable critical delay well before the relevant date.363

5.85  Though most of the cases involve building contracts, the same reasoning was applied to a voyage charterparty in The Mass Glory,364 where it was held that the shipowner was not liable for delay where the ship had been prevented by the charterer’s breach from getting to the point where notice of readiness to load could be given. In all these cases the promisor is not responsible for the delay; indeed, the conduct of the promisee in hindering or preventing performance may itself give rise to a claim in damages, or even amount to a repudiation of the entire contract.365

D.  Supervening Events

5.86  Our final topic is the extent to which timely performance may be excused by supervening events. There are four situations in which this may happen: (1) under the terms of a force majeure clause; (2) where the contract is discharged by breach or frustration; (3) in other cases of impossibility falling short of frustration; and (4) under the rule in Hick v Raymond & Reid, where a party who is bound to (p. 125) perform within a reasonable time is hindered by circumstances beyond his or her control. We have already dealt with the last of these at some length,366 but the other three need further elaboration.

(1)  Force majeure clauses

5.87  Contracts frequently contain terms by which a promisor is excused from performance altogether, or allowed to delay or interrupt performance, on the happening of certain events beyond his or her control. Such terms are known as force majeure clauses, and their effect is to give the promisor an excuse for failure to perform when this might not be allowed under the general law.367 A party relying on such a clause has to prove three things: (1) that it covers the event in question; (2) that the non-performance was due to circumstances beyond his or her control; and (3) that there were no reasonable steps that could have been taken to mitigate the event or its consequences. As well as this, the contract may impose further conditions on a promisor who wishes to invoke the protection of such a clause.

(a)  Clause must cover the relevant contingency

5.88  Whether a force majeure clause covers the contingency in question obviously depends on how it is worded. For instance, a clause relieving the promisor from liability if he or she is ‘prevented’ from performance will not cover a situation where performance was merely rendered more difficult or onerous.368 A clause using the word ‘hindered’ may be given a wider scope,369 though a mere change in economic or market circumstances, affecting the profitability of a contract or the ease with which the parties’ obligations could be performed, will not be regarded as being a force majeure event.370 Quite often the clause in question will refer to some particular contingency, such as ‘Act of God’, or ‘restraint of princes’, or ‘perils of the sea’.371 In such cases it will be necessary to see how the words in question have been interpreted in other cases on the topic, always bearing in (p. 126) mind that expressions used in relation to one type of contract may not be appropriate in the context of another.372

(b)  Event must be beyond the control of the promisor

5.89  The promisor will not be able to rely on a force majeure clause if he or she was responsible for the occurrence of the event in question.373 However, difficulties arise where the promisor was not directly responsible for the event, but should have realised that it was likely to occur.374 In The Angelia375 the clause in question referred to ‘unavoidable hindrances’, and it was said that the promisor could not rely on the clause if the existence of facts showing that it was bound to operate should reasonably have been known to the promisor prior to the conclusion of the contract, and would have been expected by the promisee to be so known.376 However, in a later case this was doubted, on the grounds that there was no principle of law that prevented a party from relying on the terms of a contract just because he or she was improvident in entering into it.377 Obviously a lot depends on the wording of the clause in question, but it has been pointed out that the parties are unlikely to have intended to allow the promisor to be excused from performance in this sort of case.378

(c)  There must be no other mode of performance

5.90  As a general rule, a force majeure clause expressed in general terms will not apply where the promisor is allowed to perform in a number of different ways, only some of which are covered by the clause.379 Thus for instance, where a seller of goods is prevented from shipping from a particular port, he cannot shelter behind the clause if there are other ports available to which the restraint does not apply.380 In the same way a seller who is prevented from acquiring goods from the normal supplier may be able to acquire them from another source, albeit at a higher price.381 However, this principle is said to be no more than a rule of (p. 127) construction, and one which may be displaced by the terms of the clause or by some other term of the contract.382

(d)  Other requirements

5.91  A promisor who wishes to rely on a force majeure clause may be required to fulfil certain preconditions before being allowed to do so; in particular, the contract may contain a provision requiring due notice to be given to the other party by a certain time and in a certain form.383 Where this is the case, the promisor will not be able to rely on the clause where he has failed to give any notice at all, but problems may arise where the notice given does not comply with the terms of the contract. In many cases the notice is given out of time, and here the courts have to consider whether time was intended to be of the essence; if it was, a late notice will be totally ineffective, whereas in other cases the delay will sound in damages only.384 Problems will also arise when the other party purports to accept a notice which is out of time, or which for some other reason does not comply with the contract;385 in this situation the courts will have to apply the principles stated above in relation to waiver and the doctrine of equitable estoppel.386

(2)  Contract discharged by breach or frustration

5.92  The promisor will obviously have a good excuse for failing to perform on time if the contract has been validly discharged by breach or frustration; indeed, where this is the case there is no obligation to perform at all. Discharge by breach, as we shall see, occurs when one party to the contract commits a breach of condition,387 or some other breach going to the root of the contract.388 In this situation the other party can opt to terminate the contract, and where this is done both parties are then released from having to perform their primary obligations under the contract.389 Discharge by frustration occurs when a contractual obligation becomes incapable of performance, either through impossibility or illegality, or because the circumstances in which performance is called for would render it a thing radically different from that which was contemplated by the contract.390 In this case the contract comes to an end automatically and both parties are (p. 128) discharged.391 These doctrines need no further elaboration in the present context, as they will be dealt with at length in Part III below.392

(3)  Excused non-performance falling short of frustration

5.93  A promisor may be excused from performance by subsequent events even where those events are insufficient to amount to frustration.393 Thus for instance an employee will not be in breach of contract if he or she fails to turn up to work due to sickness, even though the illness is not of such a duration as to frustrate the contract,394 and it has been held that a tenant was not in breach of his covenant to redevelop the land by a certain date when a building on the site was listed.395 In the same way it is suggested that a builder or plumber might not be liable for failure to complete the work on time where this was due to some extraneous event beyond their control, such as a flood or power failure or a heavy snowstorm. The contract would not be frustrated in these cases, but the promisor would still have a valid excuse for the delay.


1  Beale, Hugh G (ed), Chitty on Contracts (32nd edn, 2016) (‘Chitty’), chapter 15; Lawson, Richard, Exclusion Clauses and Unfair Contract Terms (11th edn, 2014) (‘Lawson’); Macdonald, Elizabeth, Exemption Clauses and Unfair Terms (2nd edn, 2006) (‘Macdonald’).

2  FTA Model Conditions of Carriage 2002 <http://www.fta.co.uk/export/sites/fta/_galleries/downloads/conditions-for-carriage-of-goods.pdf> (accessed 19 May 2017).

3  Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd (The Strathallan) [1983] 1 WLR 964 (HL(Sc)) at 966 (Lord Wilberforce) and 970 (Lord Fraser); Parsons Corp v CV Scheepvaartonderneming ‘Happy Ranger’ (The Happy Ranger) [2002] EWCA Civ 694; [2002] 2 Lloyd’s Rep 357 at 364 (Rix LJ); Frans Maas (UK) Ltd v Samsung Electronics (UK) Ltd [2004] EWHC 1502 (Comm), [2004] 2 Lloyd’s Rep 251.

4  Suisse Atlantique Societe d’Armement Maritime SA v Rotterdamsche Kolen Centrale [1967] 1 AC 361 (HL); Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd (The Strathallan) [1983] 1 WLR 964 (HL(Sc)); George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803 (HL).

5  Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 (High Court of Australia); HIH Casualty and General Insurance Ltd v Chase Manhattan Bank [2003] UKHL 6, [2003] 1 CLC 358 at [63] (Lord Hoffmann); Macdonald, above n 1 at p 49.

6  Unfair Contract Terms Act 1977 (‘UCTA’) s 13(1); Chitty, above n 1, para 15-003. As Lord Wilberforce said, ‘An act which, apart from the exceptions clause, might be a breach sufficiently serious to justify refusal of further performance may be reduced in effect, or made not a breach at all, by the terms of the clause’: Suisse Atlantique Societe d’Armement Maritime SA v Rotterdamsche Kolen Centrale [1967] 1 AC 361 (HL) at 431.

7  Coote, Brian, Exception Clauses (1964), chapter 1; Macdonald, Elizabeth, ‘Exception clauses: exclusionary or definitional? It depends!’ (2012) 28 J Contract Law 47.

8  Chitty, above n 1, para 15-003; Rutter v Palmer [1922] 2 KB 87 (CA) at 92 (Scrutton LJ); Coote, Brian, ‘The Unfair Contract Terms Act’ (1978) 41 MLR 312. Contrast the approach of the House of Lords in GH Renton & Co Ltd v Palmyra Trading Corp of Panama [1957] AC 149.

9  Below, paras 13.35–13.72; Chitty, above n 1, para 15-004.

10  [1967] 1 AC 361 (HL).

11  Chandris v Isbrandtsen-Moller Co Inc [1951] 1 KB 240 at 249 (Devlin J).

12  For further discussion of demurrage see below, paras 13.39–13.44.

13  The principle being that in the last resort the front of the contract will prevail over the back: below, para 5.13.

14  [1970] 1 Lloyd’s Rep 247.

15  Bayoil SA v Seawind Tankers Corp [2001] 1 Lloyd’s Rep 533; Seven Seas Transportation Ltd v Pacifico Union Marina Corp (The Satya Kailash) [1984] 1 Lloyd’s Rep 588.

16  Of course, since the advent of word processors it is now often impossible to tell the difference between the two kinds of clause in question.

17  [2001] 1 Lloyd’s Rep 533 at 536 (Langley J); Cobelfret Bulk Carriers NV v Swissmarine Services SA (The Lowlands Orchid) [2009] EWHC 2883 (Comm), [2010] 1 Lloyd’s Rep 317 (Beatson J).

18  Below, para 5.11.

19  Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 (HL) at 1316 (Lord Diplock).

20  Thus the attitude of the courts will be more favourable to a clause applying equally to both parties than to one foisted on one party by the other: Transocean Drilling UK Ltd v Providence Resources plc (The Arctic III) [2016] EWCA Civ 372.

21  Below, paras 5.27 (Unfair Contract Terms Act 1977) and 5.34 (Consumer Rights Act 2015).

22  Chitty, above n 1, para 15-152; below, paras 5.87–5.91.

23  Fairclough, Dodd & Jones v J H Vantol Ltd [1957] 1 WLR 136 (HL) at 143 (Lord Tucker).

24  Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323; B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419; Mamidoil-Jetoil Greek Petroleum Co SA v Okta Crude Oil Refinery AD (No 3) (CA) [2003] 2 Lloyd’s Rep 635.

25  Below, paras 5.18–5.33.

26  Lawson, above n 1, chapter 1.

27  Macdonald, above n 1, p 5.

28  Glass, David, and Cashmore, Chris, Introduction to the Law of Carriage of Goods (1989) (Glass and Cashmore).

29  Convention on the Contract for the International Carriage of Goods by Road (1956) (CMR) (Geneva, 19 May 1956): (Treaty Series 090/1967: Cmnd 3455).

30  Convention Concerning International Carriage by Rail (1980) (Berne, 9 May 1980) (Treaty Series No 52 (1993): Cm 2312), as modified by the Vilnius Protocol of 1999 (Miscellaneous Series 021/2000: Cm 4873).

31  Hague Rules (Brussels, 25 August 1924) (Treaty Series 017/31: Cmd 3806), as amended by the Protocols of 1968 (Hague-Visby Rules) (Brussels, 23 February 1968) (Treaty Series 083/1977: Cmnd 6944) and of 1979 (Brussels, 21 December 1979) (Treaty Series 028/1984: Cmnd 9197).

32  Convention for the Unification of Certain Rules relating to International Carriage by Air (1929) (Warsaw, 12 October 1929) (Treaty Series 011/1933: Cmd 4824), as amended by the Montreal Convention of 1999 (Treaty Series 044/2004: Cm 6369).

33  See for instance CMR Convention, Art 17.4; COTIF, Art 26(2); Hague-Visby Rules, Art IV.2; Montreal Convention, Art 22.

34  The usual principle applies whereby it is up to each contracting state to incorporate the relevant conventions into its domestic law: for the UK see the Carriage of Goods by Road Act 1965, the Railways (Convention on International Carriage by Rail) Regulations 2005, the Carriage of Goods by Sea Act 1971 and the Carriage by Air Act 1961.

35  Of course, there is nothing to stop the parties from agreeing to incorporate conventions of this sort into the contract, either in whole or in part, in situations where it would not otherwise apply; see Dunavant Enterprises Inc v Olympia Spinning and Weaving Mills Ltd [2011] EWHC 2028 (Comm), [2011] 2 Lloyd’s Rep 619 (Burton J) (incorporation of bylaws and rules of International Cotton Association).

36  Lawson, above n 1, chapter 2.

37  Alison & Co v Wallsend Slipway & Engineering Co Ltd (1927) 43 TLR 323 (CA) at 324 (Scrutton LJ); McGee Group Ltd v Galliford Try Building Ltd [2017] EWHC 87 (TCC), [2017] CILL 393 at para [25] (Coulson J).

38  Macdonald, above n 1, p 45.

39  Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd (The Strathallan) [1983] 1 WLR 964 (HL(Sc)) at 966 (Lord Wilberforce); George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803 (HL) at 810 (Lord Diplock).

40  Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896 at 912 (Lord Hoffmann); Macdonald, above n 1 at 34. Of particular relevance in this connection is the recent insistence by the courts in cases such as Arnold v Britton [2015] UKSC 36, [2015] AC 1619 that the starting point for contractual interpretation must always be the words used by the parties, and that these should be given their natural meaning wherever possible.

41  Hut Group Ltd v Nobahar-Cookson [2016] EWCA Civ 128, [2016] 1 CLC 573; McGee Group Ltd v Galliford Try Building Ltd [2017] EWHC 87 (TCC), [2017] CILL 393 at para [25] (Coulson J); Lawson, above n 1, para 2.05.

42  Lawson, above n 1, chapter 2; Chitty, above n 1, paras 15-007–15-022.

43  Glynn v Margetson & Co [1893] AC 351 (HL); Motis Exports Ltd v Dampskibsselskabet AF 1912 Aktieseskab [2000] 1 Lloyd’s Rep 211 (CA).

44  Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2004] 1 AC 715; Jindal Iron & Steel Co Ltd v Islamic Solidarity Shipping Co Jordan Inc (The Jordan II) [2005] 1 WLR 1363.

45  (1888) 20 QBD 475 (CA).

46  (1934) 49 Ll LR 183; Hadji Ali Akbar v Anglo-Arabian SS Co (1906) 11 Com Cas 219.

47  (1934) 49 Ll LR 183 at 190 (Branson J).

48  Bayoil SA v Seawind Tankers Corp (The Leonidas) [2001] 1 Lloyd’s Rep 533; Mitsubishi Corp v Eastwind Transportation Ltd (The Irbenskiy Proliv) [2005] 1 Lloyd’s Rep 383.

49  Marifortuna Naviera SA v Government of Ceylon [1970] 1 Lloyd’s Rep 247; Seven Seas Transportation Ltd v Pacifico Union Marina Corp (The Satya Kailash) [1988] 1 Lloyd’s Rep 588 (CA).

50  Davis v Garrett (1830) 6 Bing 716, 130 ER 1456; Chitty, above n 1, para 15-032; Cashmore, C, ‘The legal nature of the doctrine of deviation’ [1989] J Bus L 492; Baughen, S, ‘Does deviation still matter?’ [1991] LMCLQ 70; Dockray, M, ‘Deviation: a doctrine all at sea’ [2000] LMCLQ 76. It has recently been suggested that the whole doctrine is based on a misunderstanding: Dempster, Hannah, ‘The confusion of incidents of common carriage with incidents of deviation’ [2016] LMCLQ 275.

51  [1907] 1 KB 660 (CA).

52  Hain SS Co v Tate and Lyle (1936) 41 Com Cas 350 (HL) at 354–355 (Lord Atkin). Lord Atkin also explains that the cargo owners may not be covered by insurance where the ship deviates from the contract voyage.

53  Mallett v Great Eastern Rly [1899] 1 QB 309; London and North Western Rly v Neilson [1922] 2 AC 263 (HL); Garnham, Harris & Elton Ltd v Alfred W Ellis (Transport) Ltd [1967] 1 WLR 940.

54  Lilley v Doubleday (1881) 7 QBD 510; Gibaud v Great Eastern Rly [1921] 2 KB 426 (CA). Such cases have been termed cases of ‘quasi-deviation’.

55  The phrase is that of Lord Greene MR: see Alderslade v Hendon Laundry Ltd [1945] KB 189 at 192 and Davies v Collins [1945] 1 All ER 247. Or, as Scrutton LJ put it in Gibaud v Great Eastern Rly (n 53 above), ‘if you undertake to do a thing in a certain way, or to keep a thing in a certain place, with certain conditions protecting it, and have broken the contract by not doing the thing contracted for in the way contracted for, or by not keeping the article in the place in which you have contracted to keep it, you cannot rely on the conditions which were only intended to protect you if you had carried out the contract in the way in which you contracted to do it’: [1921] 2 KB 426 at 435.

56  Below, para 5.16.

57  This was the view of Lloyd LJ in Kenya Railways v Antares Pte Ltd [1987] 1 Lloyd’s Rep 424 (CA) at 430 and State Trading Corp of India v Golodetz Ltd [1989] 2 Lloyd’s Rep 277 (CA) at 289.

58  Baughen, above n 50; Dockray, above n 50; Chitty, above n 1, para 15-032.

59  Hain SS Co v Tate and Lyle (1936) 41 Com Cas 350 (HL) at 354–355 (Lord Atkin); Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 (HL) at 845 (Lord Wilberforce).

60  Chitty, above n 1, para 15-023.

61  Chanter v Hopkins (1838) 4 M & W 399 at 404, 150 ER 1484 at 1487 (Lord Abinger).

62  NV Bunge v Compagnie Noga d’Importation et d’Exportation SA (The Bow Cedar) [1980] 2 Lloyd’s Rep 602 at 604 (Lloyd J).

63  Hence the comment in by Birkett LJ in Karsales (Harrow) Ltd v Wallis [1956] 1 WLR 936 (CA) at 942 that what was delivered was ‘not a car at all’.

64  Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] AC 576 (PC) at 587 (Lord Denning).

65  The Cap Palos [1921] P 458; Whistler International Ltd v Kawasaki Kisen Kaisha Ltd (The Hill Harmony) [2001] 2 AC 638 (HL) (exclusion clause held not to cover deliberate disregard by shipowner of charterer’s orders).

66  [1943] 2 All ER 690 (Lewis J), [1944] 1 All ER 381 (CA).

67  [1943] 2 All ER 690 at 694 (Lewis J).

68  Karsales (Harrow) Ltd v Wallis [1956] 1 WLR 969 (CA); Harbutt’s ‘Plasticine’ Ltd v Wayne Tank and Pump Co [1970] 1 QB 447 (CA).

69  Suisse Atlantique Societe d’Armement SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 (HL); Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 (HL).

70  Chitty, above n 1, para 15-027.

71  Above, para 5.13; Kudos Catering Ltd v Manchester Central Convention Complex Ltd [2013] EWCA Civ 38, [2013] 2 Lloyd’s Rep. 270.

72  China Shipbuilding Corp v Nippon Yusen Kabushiki Kaisha (The Seta Maru) [2000] 1 Lloyd’s Rep 367 at 376 (Thomas J) (delivery of ship known to be unseaworthy).

73  Thompson, Peter K J, Unfair Contract Terms Act 1977 (1978) (‘Thompson’); Lawson, above n 1, chapters 7–9. Consumer contracts are now dealt with by the Consumer Rights Act 2015: see below, para 5.34.

74  Unfair Contract Terms Act 1977 (UCTA), s 2; Ashdown v Samuel Williams & Sons [1957] 1 QB 409 (CA).

75  UCTA, s 6(4) (terms implied under the Sale of Goods Act 1979).

76  UCTA, s 1(3)(a) and (b). But liability of an occupier of premises for breach of an obligation or duty towards a person obtaining access to the premises for recreational or educational purposes, being liability for loss or damage suffered by reason of the dangerous state of the premises, is not a business liability of the occupier unless granting that person such access for the purposes concerned falls within the business purposes of the occupier: see further Occupiers Liability Act 1984, s 2.

77  Attempts to exclude liability in tort are a different matter: see White v Blackmore [1972] 2 QB 651 (CA).

78  Above, paras 5.03–5.10.

79  Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600 (CA) at 605.

80  UCTA, s 13(1)(a). For instance, the clause may impose an unduly short time limit for bringing a claim: BHP Petroleum v British Steel plc and Dalmine SpA [1999] 2 Lloyd’s Rep 586; Granville Oil & Chemicals v Davis Turner & Co Ltd [2003] EWCA Civ 570, [2003] 2 Lloyd’s Rep 356. See also Kaye v Nu Skin UK Ltd [2012] EWHC 958 (QB), [2012] CTLC 69 (contract providing for arbitration in Utah).

81  UCTA, s 13(1)(b): Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600 (CA); AXA Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133, [2011] 2 Lloyd’s Rep 1 (exclusion of set-off).

82  UCTA, s 13(1)(c): as where a term states that the acceptance of goods or services shall be conclusive evidence that they are in conformity with the contract.

83  UCTA, s 13; above, para 5.05.

84  UCTA, s 3(2)(b)(i); below, para 5.24.

85  UCTA, s 13(2).

86  Chitty, above n 1, para 15-004; above, para 5.06.

87  Phillips Products Ltd v Hyland [1987] 1 WLR 659 (CA) at 666 (Slade LJ); Johnstone v Bloomsbury Health Authority [1992] QB 333 (CA) at 346 (Stuart-Smith LJ).

88  For what this means see below, paras 5.25–5.28.

89  UCTA, s 1(1)(a); Flamar Interocean Ltd v Denmac Ltd (The Flamar Pride) [1990] 1 Lloyd’s Rep 434 (negligent inspection of vessels by surveyor).

90  Mallett v Great Eastern Rly [1899] 1 QB 309; London and North Western Rly v Neilson [1922] 2 AC 263 (HL); Garnham, Harris & Elton Ltd v Alfred W Ellis (Transport) Ltd [1967] 1 WLR 940.

91  Section 3 used also to apply where one party dealt ‘as consumer’, but since the Consumer Rights Act 2015 the UCTA regime has been restricted to contracts between businesses, and section 3(3) now specifically excludes consumer contracts from the ambit of the section.

92  UCTA, s 3(1); Jacobs, E J, ‘Written standard terms of business’ [1983] J Bus Law 226.

93  St Albans City & District Council v International Computers Ltd [1996] 4 All ER 481 (CA) at 491 (Nourse LJ); Hadley Design Associates Limited v The Lord Mayor and Citizens of the City of Westminster [2003] EWHC 1617 (TCC) at [83] (Richard Seymour QC).

94  Transocean Drilling UK Ltd v Providence Resources plc (The Arctic III) [2016] EWCA Civ 372; African Export-Import Bank v Shebah Exploration and Production Co Ltd [2016] EWHC 311 (Comm), [2016] 1 CLC 292.

95  Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 (HL) at 1316 (Lord Diplock).

96  The Flamar Pride [1990] 1 Lloyd’s Rep 434 at 438 (Potter J); Salvage Association v CAP Financial Services [1995] FSR 654.

97  St Albans City & District Council v International Computers Ltd [1996] 4 All ER 481 (CA) at 491 (Nourse LJ).

98  British Fermentation Products Ltd v Compair Reavell Ltd (1999) 66 Const LR 1; Chitty, above n 1, para 15-084.

99  UCTA, s 3(2)(a).

100  UCTA, s 3(2)(b)(i).

101  Above, para 5.18. Note, however, that most deviation cases will not be covered by section 3, as it does not extend to contracts for the carriage of goods by sea: UCTA, s 1(2) and Schedule 1 para 2(c): below, para 5.33.

102  UCTA, s 3(2)(b)(ii).

103  Chitty, above n 1, para 15-167; below, paras 5.87–5.91.

104  Timeload Ltd v British Telecommunications plc [1995] EHLR 459 (CA).

105  Thompson, above n 73, para 5.

106  Lawson, above n 1, chapter 9.

107  Thompson, above n 73, para 55; Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600 (CA); AXA Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133, [2011] 2 Lloyd’s Rep 1.

108  UCTA, s 11(5).

109  Edmund Murray v BSP International Foundations (1994) 33 Const LR 1 (CA).

110  Macdonald, above n 1, p 167.

111  George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803 (HL) at 810 (Lord Bridge); Overseas Medical Supplies Ltd v Orient Transport Services Ltd [1999] 1 Lloyd’s Rep 273 (CA) at 277 (Potter LJ); Chitty, above n 1, para 15-115; Adams, John and Brownsword, Roger, ‘The Unfair Contract Terms Act: a decade of discretion’ (1988) 104 LQR 94.

112  This applies on its terms only to contracts for the supply of goods covered by sections 6 and 7, but the guidelines have frequently been used on a general basis by the courts: Singer Co (UK) Ltd v Tees and Hartlepool Port Authority [1988] 2 Lloyd’s Rep 164; The Flamar Pride [1990] 1 Lloyd’s Rep 434; Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600 (CA); Schenkers Ltd v Overland Shoes Ltd [1998] 1 Lloyd’s Rep 498; Granville Oil and Chemicals Ltd v Davis Turner and Co Ltd [2003] EWCA Civ 570, [2003] 2 Lloyd’s Rep 356.

113  Lawson, above n 1, para 9.002.

114  UCTA, Schedule 2(a): George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803 (HL); Stag Line Ltd v Tyne Shiprepair Group Ltd (The Zinnia) [1984] 2 Lloyd’s Rep 211; Schenkers Ltd v Overland Shoes Ltd (above n 112); Thames Tideway Properties Ltd v Serfaty Partners [1999] 2 Lloyd’s Rep 110; Regus (UK) Ltd v Epcot Solutions Ltd [2008] EWCA Civ 361.

115  UCTA, Schedule 2(b): Green Ltd v Cade Bros Farms [1978] 1 Lloyd’s Rep 602; George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd (above n 114); Singer Co (UK) Ltd v Tees and Hartlepool Port Authority [1988] 2 Lloyd’s Rep 164; Granville Oil & Chemicals Ltd v Davis Turner & Co Ltd (above n 112).

116  UCTA, Schedule 2(c): George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd (above n 114); Charlotte Thirty Ltd v Croker Ltd (1990) 24 Const LR 46; Watford Electronics Ltd v Sanderson CFL Ltd [2001] EWCA Civ 317, [2001] Build LR 143; Britvic Soft Drinks Ltd v Messer UK Ltd [2002] EWCA Civ 548, [2002] 2 Lloyd’s Rep 376.

117  UCTA, Schedule 2(d): The Zinnia [1984] 2 Lloyd’s Rep 211; Rees-Hough v Redland Reinforced Plastics Ltd (1985) 2 Const LR 109; Granville Oil & Chemicals Ltd v Davis Turner & Co Ltd (above n 112).

118  UCTA, Schedule 2(e).

119  Lawson, above n 1, paras 9-004–9-008.

120  Chitty, above n 1, para 15-099.

121  Overseas Medical Supplies Ltd v Orient Transport Services Ltd [1999] 1 Lloyd’s Rep 273 (CA) at 277 (Potter LJ).

122  Singer Co (UK) Ltd v Tees and Hartlepool Port Authority [1988] 2 Lloyd’s Rep 164.

123  Ibid at 169 (Steyn J); Monarch Airlines Ltd v London Luton Airport [1998] 1 Lloyd’s Rep 403 at 413 (Clarke J).

124  Chitty, above n 1, para 15-122.

125  Thompson, above n 73, para 96; Law Commission, First Report on Exemption Clauses (1969) Law Com no 24; Granville Oil & Chemicals Ltd v Davis Turner & Co Ltd [2003] EWCA Civ 570, [2003] 2 Lloyd’s Rep 356 at [31] (Tuckey LJ).

126  UCTA, s 26(1) and (2).

127  UCTA, s 26(3). For the purposes of this section the Channel Islands and the Isle of Man count as separate states.

128  UCTA, s 26(4)(a).

129  UCTA, s 26(4)(b).

130  UCTA, s 26(4)(c). Apparently this does not include a situation where a contract is made in another state for goods to be delivered within, rather than to, the UK: Amiri Flight Authority v BAE Systems plc [2003] EWCA Civ 1447, [2003] 2 Lloyd’s Rep 767.

131  UCTA, s 27(1).

132  UCTA, s 27(2)(a).

133  UCTA, s 29(1)(a).

134  UCTA, s 29(1)(b).

135  Chitty, above n 1, para 15-123; above, para 5.11.

136  UCTA, Schedule 1 para 1; Chitty, above n 1, para 15-117.

137  Para 1(a).

138  Para 1(b).

139  Para 1(c).

140  Para 1(d).

141  Para 1(e).

142  Para 2(a).

143  Para 2(b).

144  Para 2(c).

145  Para 4.

146  Council Directive (EC) 93/13 on Unfair Terms in Consumer Contracts [1993] OJ L95/29; Lawson, above n 73, chapter 10.

147  Above, para 5.19.

148  Below, para 5.35.

149  SI 1994/3159.

150  SI 1999/2083.

151  Law Commission Report, Unfair Terms in Contracts, Law Com No 292 (Cm 6464, 2005).

152  and a packet of cigarettes may be a consumer in relation to the second but not the first (‘CRA’), s 2(2); Lawson, above n 1, para 10-002.

153  Overy v Paypal (Europe) Ltd [2012] EWHC 2659 (QB), [2013] Bus LR D1.

154  See below, para 5.38.

155  UCTA, s 3; above, para 5.24.

156  Consumer Rights Act 2015 (‘CRA’), s 62(4).

157  Lawson, above n 1, para 10-020.

158  Director-General of Fair Trading v First National Bank plc [2001] UKHL 52, [2002] 1 AC 481 at [17] (Lord Bingham).

159  Ibid.

160  Council Directive 93/13, Recital 16.

161  UCTA, Sch 2(a), (b) and (e); above, para 5.27.

162  Chitty, above n 1, para 38-271.

163  For a general discussion of this issue see Lawson, above n 1, para 10-025.

164  Council Directive 93/13, Recital 16; Chitty, above n 1, para 38-245.

165  Chitty, ibid.

166  Director General of Fair Trading v First National Bank plc [2001] UKHL 52, [2002] 1 AC 481 at [17] (Lord Bingham).

167  Ibid.

168  CRA, s 62(5).

169  Below, para 5.45.

170  CRA, s 64(2). By s 64(3) a term is ‘transparent’ for the purposes of Part 2 if it is expressed in plain and intelligible language and (in the case of a written term) is legible.

171  CRA, s 64(2). By s 64(4) a term is ‘prominent’ if it is brought to the consumer’s attention in such a way that an average consumer would be aware of the term: compare the rules for incorporation of an exclusion clause: Lawson, above n 1, chapter 1.

172  CRA, s 64(1)(a); see Office of Fair Trading v Abbey National plc [2009] UKSC 6, [2010] 1 AC 696.

173  CRA, s 64(1)(b).

174  Above, para 5.05.

175  As in Leduc v Ward (1888) 20 QBD 475 (CA); Glynn v Margetson & Co [1893] AC 351 (CA); Connolly Shaw Ltd v A/S Det Nordfjeldske D/S (1934) 49 Ll L Rep 183; Ganado, Max and Kindred, Hugh M, Marine Cargo Delays (1990), pp 103–109. None of these cases would be covered by the Act, as they did not involve a consumer, but they serve to illustrate the type of clause that gives rise to the problem.

176  As in Losinjska Plovidba Brodarstovo DD v Valfracht Maritime Co Ltd (The Lipa) [2001] 2 Lloyd’s Rep 17 (‘all details “about” – all details given in good faith but without guarantee’).

177  Council Directive 93/13, Recital 19. Note that insurance contracts are not excluded from the 2015 Act as they are from UCTA: above, para 5.33.

178  Section 69(1) of the Act provides that where a term in a consumer contract, or a consumer notice, could have different meanings, the meaning that is most favourable to the consumer is to prevail.

179  Director-General of Fair Trading v First National Bank plc [2001] UKHL 52, [2002] 1 AC 481 at [12] (Lord Bingham) (dealing with the equivalent provision in the 1999 Regulations).

180  CRA, s 62(1).

181  CRA, s 67.

182  Peel, Edwin (ed), Treitel: The Law of Contract (14th edn, 2015) (‘Treitel (Contract)’), para 7-120. (The discussion relates to the position under the old 1999 Regulations, but the 2015 Act is the same in this respect.)

183  Chitty, above n 1, para 38-388.

184  CRA, s 70(1).

185  CRA, s 70(2) and Schedule 5.

186  Schedule 5, para 3.

187  Ibid, para 6.

188  CRA, s 63(1); Lawson, above n 1, para 10-026.

189  Furmston, M P (ed), Cheshire, Fifoot and Furmston’s Law of Contract (17th edn, 2017) (‘Cheshire, Fifoot and Furmston’), p 262.

190  Ibid.

191  See for instance paras 4 (forfeiture of deposit) and 6 (penalty for breach).

192  Schedule 2 para 1.

193  Schedule 2 para 2.

194  Schedule 2 para 11.

195  Schedule 2 para 20.

196  Above, paras 5.29–5.33.

197  CRA, s 61(2).

198  CRA, s 73(1)(a).

199  CRA, s 73(1)(b).

200  See above, para 5.11.

201  Ibid.

202  Ibid.

203  Above, paras 5.32 (UCTA 1977) and 5.46 (CRA 2015).

204  Above, n 32.

205  Article III.1.

206  Article III.2.

207  Article III.8.

208  Above n 30, Article 41(1).

209  Above n 31, Article 23.

210  Chitty, above n 1, chapter 22.

211  Davis v Street (1823) 1 C & P 18, 171 ER 1084; Foster v Dawber (1851) 6 Exch 839, 155 ER 785; Morris v Baron & Co [1918] AC 1 (HL); Chitty, above n 1, para 22-025.

212  Chitty, above n 1, para 22-025.

213  [1919] 1 KB 78; Fisher v Eastwoods Ltd [1936] 1 All ER 421.

214  Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp [1981] AC 901 (HL).

215  Atkinson v Sir Alfred McAlpine & Sons [1968] 2 QB 229 (CA); Birkett v James [1978] AC 297 (HL).

216  See now Arbitration Act 1996, s 41; below, n 225.

217  Furmston, M P and Tolhurst, G J, Contract Formation (2nd edn, 2016), paras 4.65–4.82.

218  André et Compagnie SA v Marine Transocean Ltd [1981] QB 694 (CA); Furmston and Tolhurst, above n 217, pp 43–44.

219  Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854 (HL); Idealview v Bello [2010] EWCA Civ 721; Furmston and Tolhurst, above n 217, paras 4.66–4.74.

220  Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA [1985] 2 Lloyd’s Rep 18 (CA); Furmston and Tolhurst, above n 217, para 4.75.

221  Compagnie Francaise D’Importation et de Distribution SA v Deutsche Continental Handelsgesellschaft [1985] 2 Lloyd’s Rep 592.

222  Tracomin SA v Anton C Nielsen A/S [1984] 2 Lloyd’s Rep 195.

223  Food Corp of India v Antclizo Shipping Corp (The Antclizo) [1988] 1 WLR 603 (HL); Blindley Heath Investments Ltd v Bass [2014] EWHC 1366 (Ch).

224  Gebr van Weelde Scheepvaartkantor BV v Compania Naviera Sea Orient SA (The Agrabele) [1985] 2 Lloyd’s Rep 496 (CA); Excomm Ltd v Guan Guan Shipping (Pte) Ltd (The Golden Bear) [1987] 1 Lloyd’s Rep 330; Tankrederei Ahrenkeil GmbH v Frahuil SA (The Multitank Holsatia) [1988] 2 Lloyd’s Rep 486.

225  To allow for this, a new section 13A was inserted into the Arbitration Act 1950 by section 102 of the Courts and Legal Services Act 1990. See now Arbitration Act 1996, s 41; Huyton SA v Jakil SpA [1999] 2 Lloyd’s Rep 83 (CA).

226  According to Sir Frederick Pollock, there was no need for this rule at all: see Principles of Contract (13th edn, 1950), p 150; Chitty, above n 1, para 22-001.

227  Chitty, above n 1, para 22-001.

228  Treitel (Contract), above n 182, para 3-057.

229  Ibid.

230  Ibid, para 3-059.

231  British Russian Gazette Ltd v Associated Newspapers Ltd [1933] 2 KB 616 (CA) at 643–645 (Scrutton LJ).

232  Collin v Duke of Westminster [1985] QB 581 (CA) at 598 (Oliver LJ).

233  R v Inhabitants of Gresham (1786) 1 TR 101, 99 ER 996; Chitty, above n 1, para 22-026.

234  As in Morris v Baron & Co [1918] AC 1 (HL).

235  Furst, Stephen and Ramsey, Vivian (eds), Keating on Construction Contracts (10th edn, 2016) (‘Keating’), chapter 4.

236  Carr v JA Berriman Pty Ltd (1953) 27 ALJR 273 (High Ct of Australia); Commr for Main Roads v Reed & Stuart Pty Ltd (1974) 12 BLR 55 (High Ct of Australia).

237  Keating, above n 235, para 4-065; Tharsis Sulphur and Copper Co v McElroy & Sons (1878) 3 App Cas 1040 (HL(Sc)).

238  Russell v Sa da Bandeira (1862) 13 CB (NS) 149, 143 ER 59; Taverner & Co Ltd v Glamorgan County Council (1941) 57 TLR 243; Keating, above n 235, para 4-065.

239  Taverner & Co Ltd v Glamorgan County Council (1941) 57 TLR 243 at 245 (Humphreys J); Keating, above n 235, para 4-065.

240  Keating, above n 235, para 8-044; Lane, Patrick, ‘Disruption and delay: fair entitlement and the regulation of risk’ (2006) 22 Construction LJ 92.

241  Below, paras 13.45–13.48.

242  Holme v Guppy (1838) 3 M & W 387, 150 ER 1195; Dodd v Churton [1897] 1 QB 562 (CA); Wells v Army & Navy Co-operative Society (1902) 86 LT 764; Peak Construction (Liverpool) Ltd v McKinney (1970) 1 BLR 111 (CA); Astilleros Canarios SA v Cape Hatteras Shipping Co Inc [1982] 1 Lloyd’s Rep 518; Group Five Building Ltd v Minister of Community Development 1993 (3) SA 629(A) at 650 C; Lane, above n 240; below, para 5.82.

243  Keating, above n 235, para 8-016. No extensions of time can be granted in the absence of express provision to that effect in the contract: Dodd v Churton, above n 242.

244  Keating, above n 235, para 8-016; Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm), (2011) 136 Con LR 190 at [243]. In deciding whether to grant such extensions, the architect must act in a ‘quasi-arbitral’ manner, and must not act arbitrarily or capriciously: Northern Regional Health Authority v Derek Crouch Construction Co Ltd [1984] QB 644 (CA); John Barker Construction Ltd v London Portman Hotel Ltd (1996) 50 Con LR 43; Triton Navigation Ltd v Vitoil SA (The Nikmary) [2003] EWCA Civ 1715, [2004] 1 Lloyd’s Rep 55.

245  Chitty, above n 1, para 22-039.

246  Nash and Staunton v Paragon Finance plc [2001] EWCA Civ 1466, [2002] 1 WLR 685; Mallone v BPB Industries plc [2002] EWCA Civ 126, [2002] ICR 1045.

247  See Consumer Rights Act 2015, Schedule 2 paras 13–16; above, para 5.45.

248  Cowey v Liberian Operations Ltd [1966] 2 Lloyd’s Rep 45 (Mayor’s and City of London Court).

249  One way round this problem is to make the variation by deed: see PM Project Services Ltd v Dairy Crest [2016] EWHC 1235 (TCC), [2016] 4 Costs LR 735.

250  Treitel (Contract), above n 182, para 3-063. The question is whether the variation was capable of benefiting both parties at the time it was made; the fact that in the end it benefited only one party is neither here nor there: Alan (WJ) & Co v El Nasr Export & Import Co [1972] 2 QB 189 (CA).

251  Such as the ‘horse, hawk or robe’ in Pinnel’s Case (1602) 5 Co Rep 117a, 77 ER 237.

252  Stilk v Myrick (1802) Camp 317, 170 ER 1168.

253  [1991] 1 QB 1 (CA), and see now MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553, [2017] QB 604 (currently under appeal).

254  North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] QB 705; Pao On v Lau Yiu Long [1980] AC 614 (PC).

255  Glencore Grain Ltd v Flacker Shipping Ltd (The Happy Day) [2002] EWCA Civ 1068, [2002] 2 Lloyd’s Rep 487 at [61] (Potter LJ).

256  In Banning v Wright Lord Hailsham quotes the observation of Lord Simon that the word derives from the same root as the word ‘waif’, used to denote an abandoned thing or person: [1972] 1 WLR 972 (HL) at 978–979.

257  Thus the term has been used to denote discharge by agreement (Price v Dyer (1810) 17 Ves 356 at 364, 34 ER 137 at 140 (Sir William Grant MR)) and variation (Brikom Investments v Carr [1979] QB 467 (CA) at 488 (Roskill LJ)): Treitel (Contract), above n 182, para 3-066. According to Lord Wright in Ross T Smyth & Co Ltd v T D Bailey, Son & Co (1940) 164 LT 102 (HL) at 106, Stroud’s Judicial Dictionary listed at least thirteen different senses of the term. See also the analysis of Potter LJ in The Happy Day, above n 255 at [64–68].

258  Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp of India [1990] 1 Lloyd’s Rep 391.

259  Ibid at 397.

260  Treitel (Contract), above n 182, para 3-069.

261  [1922] 1 KB 688.

262  See above, para 5.59.

263  (1875) LR 10 Ex 195; Besseler Waechter Glover & Co v South Derwent Coal Co Ltd [1934] 1 KB 408.

264  (1875) LR 10 Ex 195 at 199 (Blackburn J).

265  Panoutsos v Raymond Hadley Corp of New York [1917] 2 KB 473 (CA).

266  Leather-Cloth Co v Hieronimus (1875) LR 10 QB 140.

267  [1920] 3 KB 475.

268  Ibid at 495ff.

269  Tankexpress A/S v Compagnie Financière Belge des Petroles SA [1949] AC 76 (HL); Plastimoda Societa per Azioni v Davidson’s (Manchester) Ltd [1952] 1 Lloyd’s Rep 527 (CA); Enrico Furst & Co v W E Fischer [1960] 2 Lloyd’s Rep 340; Westbrook Resources v Globe Metallurgical Inc [2009] EWCA Civ 310, [2009] 2 Lloyd’s Rep 224.

270  [1949] AC 76 at 103 (Lord du Parcq).

271  Tyers v Rosedale and Ferryhill Iron Co (1875) LR 10 Ex 195 at 199 (Blackburn J); Panoutsos v Raymond Hadley Corp of New York [1917] 2 KB 473 (CA) at 477–478 (Viscount Reading CJ); Hartley v Hymans [1920] 3 KB 475 at 495.

272  Chitty, above n 1, para 24-007; Prosper Homes v Hambro’s Bank Executor and Trustee Co (1979) 39 P & CR 395 at 401 (Browne-Wilkinson J).

273  Hartley v Hymans [1920] 3 KB 475 at 495 (McCardie J).

274  (1877) 2 App Cas 439 (HL); below, para 5.71.

275  A passing reference to Hughes v Metropolitan Railway can be seen in Hartley v Hymans (above, para 5.64), but prior to that the two doctrines seem to have existed in isolation.

276  The Happy Day, above n 255 at [64] (Potter LJ).

277  [1990] 1 Lloyd’s Rep 391 (HL) at 398.

278  The Happy Day, above n 255 at [65]; Scarf v Jardine (1882) 7 App Cas 345 (HL) at 360–361 (Lord Blackburn); Kammins Ballrooms Co v Zenith Investments (Torquay) Ltd [1971] AC 650 (HL).

279  Craine v Colonial Mutual Fire Insurance Co Ltd (1920) CLR 305 (High Ct of Australia) at 327 (Isaacs J).

280  Wallis, Son & Wells v Pratt & Haynes [1910] 2 KB 1003 (CA) at 1012–1013 (Fletcher Moulton LJ). The decision of the Court of Appeal was reversed, and the dissenting judgment of Fletcher Moulton LJ affirmed, by the House of Lords at [1911] AC 394.

281  Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (The Hongkong Fir) [1962] 2 QB 26 (CA).

282  Chitty, above n 1, para 24-002; Avery v Bowden (1855) 5 E & B 714, 119 ER 647; Tredegar Iron & Coal Co Ltd v Hawthorn Bros & Co (1902) 18 TLR 716 (CA); Vitoil SA v Norelf Ltd [1996] AC 800 (HL).

283  Moschi v Lep Air Services [1973] AC 331 (HL) at 350 (Lord Diplock).

284  Triton Navigation Ltd v Vitoil SA (The Nikmary) [2003] EWCA Civ 1715, [2004] 1 Lloyd’s Rep 55.

285  Davenport v R (1877) 3 App Cas 115 (PC); Bentsen v Taylor, Sons & Co [1893] 2 QB 274 (CA); The Brimnes [1975] QB 929 (CA); The Kanchenjunga [1990] 1 Lloyd’s Rep 391 (HL).

286  Charles Rickards Ltd v Oppenhaim [1950] 1 KB 616 (CA).

287  If, having been given such a chance, the promisor still fails to perform, then a fresh right to terminate may arise, as was the case in Charles Rickards v Oppenhaim (above n 287).

288  Chitty, above n 1, para 24-003; UGS Finance Ltd v National Mortgage Bank of Greece [1964] 1 Lloyd’s Rep 446 (CA) at 450 (Lord Denning MR); Panchaud Frères SA v Etablissements General Grain Co [1970] 1 Lloyd’s Rep 53 (CA) at 57 (Lord Denning MR); Metropolitan Properties v Cordery (1979) 251 EG 567 (CA); Parbulk II A/S v Heritage Maritime SA (The Mahakam) [2011] EWHC 2917 (Comm), [2012] 1 Lloyd’s Rep 87 at [94] (Eder J). In some cases it may be necessary to go further and show that the promisee was aware of the existence of the right: Peyman v Lanjani [1985] Ch 457 (CA).

289  Scarf v Jardine (1882) 7 App Cas 345 (HL) at 361 (Lord Blackburn); China National Foreign Trade Transportation Corp v Evlogia Shipping Co SA of Panama (The Mihailios Xilas) [1979] 1 WLR 1018 (HL) at 1024 (Lord Diplock); The Kanchenjunga, [1990] 1 Lloyd’s Rep 391 (HL) at 398 (Lord Goff); Aktieselskabet Dampskibsselskabet Svendborg v Mobil North Sea [2001] 2 Lloyd’s Rep 127 at 131 (Steel J); MSAS Global Logistics Ltd v Power Packaging Ltd [2003] EWHC 1393 (Davis J); Peregrine Systems Ltd v Steria Ltd [2005] EWCA Civ 239 at [18] (Maurice Kay LJ); The Mahakam [2011] EWHC 2917 (Comm), [2012] 1 Lloyd’s Rep 87 at [94] (Eder J); White Rosebay Shipping SA v Hong Kong Chain Glory Shipping Ltd (The Fortune Plum) [2013] 1355 (Comm), [2013] 2 CLC 884.

290  Lakshmijit v Sherani [1974] AC 605 (PC).

291  Force India Formula One Team Ltd v 1 Malaysia Racing Team Sdn Bhd [2013] EWCA Civ 780, [2013] RPC 36 at [35]–[45].

292  Gunton v Richmond-on-Thames LBC [1981] Ch 448 (CA) at 468 (Buckley LJ).

293  As in Charles Rickards v Oppenhaim [1950] 1 KB 616 (CA).

294  For instance a landlord may lose the right to forfeit the lease if he or she accepts rent from the tenant after becoming aware of the tenant’s breach of covenant: Segal Securities Ltd v Thoseby [1963] 1 QB 887; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048 (CA). However, the scope of this principle is open to question: The Mahakam [2011] EWHC 2917 (Comm), [2012] 1 Lloyd’s Rep 87 at [22] (Eder J).

295  Fisher, Reeves & Co Ltd v Armour & Co Ltd [1920] 3 KB 614 (CA) at 624 (Scrutton LJ); Stoczia Gdanska SA v Latvian Shipping Co (No 2) [2002] EWCA Civ 889, [2002] 2 Lloyd’s Rep 436 at [87] (Rix LJ); Red River v UK Ltd v Sheikh [2010] EWHC 961 (Ch); Ampurius Nu Homes Holdings Ltd v Telford Homes (Creekside) Ltd [2013] EWCA Civ 577, [2013] BLR 400 at [63].

296  As in Vitoil SA v Norelf Ltd [1996] AC 800 (HL). The question whether the option to terminate has been exercised in any given case is said to be one of fact: Sotiros Shipping Inc v Sameiet Solholt (The Solholt) [1981] 2 Lloyd’s Rep 574 (CA).

297  Holland v Wiltshire (1954) 90 CLR 409 (High Ct of Australia); Heyman v Darwins [1942] AC 356 (HL) at 361 (Viscount Simon LC); Maredelanto Compania Naviera SA v Bergbau-Handel GmbH (The Mihalis Angelos) [1971] 1 QB 164 (CA) at 204 (Megaw LJ); The Leonidas D [1985] 2 Lloyd’s Rep 18 (CA) at 24–26 (Robert Goff LJ); State Trading Corp of India v M Golodetz Ltd [1989] 2 Lloyd’s Rep 277 (CA) at 286 (Kerr LJ); Glencore Grain Rotterdam BV v LORICO [1997] 2 Lloyd’s Rep 386 (CA) at 394 (Evans LJ). Compare the rules relating to ‘acceptance’ in section 35 of the Sale of Goods Act 1979: Clegg v Anderson (T/A Nordic Marine) [2003] EWCA Civ 320, [2003] 2 Lloyd’s Rep 32; Jones v Gallagher (T/A Gallery Kitchens and Bathrooms) [2004] EWCA Civ 10, [2005] 1 Lloyd’s Rep 377; Dubai Islamic Bank PJSC v PSI Energy Holding Co BSC [2013] EWHC 3781 (Comm).

298  [1950] 1 KB 616 (CA); More OG Romsdal Fylkesbatar AS v The Demise Charterers of the Ship ‘Jotunheim’ [2004] EWHC 671 (Comm), [2005] 1 Lloyd’s Rep 181.

299  Below, Chapter 8.

300  [1990] 1 Lloyd’s Rep 391 (HL) at 399.

301  Ibid.

302  Ibid.

303  Ibid.

304  (1877) 2 App Cas 439 (HL).

305  Ibid at 448.

306  [1947] KB 130.

307  Ibid at 134.

308  As we shall see below (para 5.73), there has to be some pre-existing legal relationship between the parties, though not necessarily one based on contract. However, in the present context we are primarily concerned with promissory estoppel as it affects the rights of parties to a contract.

309  [1979] 1 WLR 783 at 810; Marseille Fret SA v D Oltman Schiffahrts GmbH & Co KG (The Trado) [1982] 2 Lloyd’s Rep 157 at 160–161 (Parker J).

310  [1979] 1 WLR 783 at 810; Baird Textile Holdings Ltd v Marks & Spencer plc [2001] EWCA Civ 274, [2001] CLC 999; SmithKline Beecham plc v Apotex Europe Ltd [2006] EWCA Civ 658, [2007] Ch 71 at [109]–[112].

311  Chitty, above n 1, para 4-088; Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd [1968] 2 QB 839; Maharaj v Jai Chand [1986] AC 898 (PC).

312  SmithKline Beecham plc v Apotex Europe Ltd [2006] EWCA Civ 658, [2007] Ch 71 at [109]–[112].

313  Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd’s Rep 109 (HL) at 126 (Lord Salmon); Bremer Handelsgesellschaft mbH v Westzucker GmbH [1981] 1 Lloyd’s Rep 207 at 213 (Robert Goff J).

314  Kim v Chasewood Park Residents Ltd [2013] EWCA Civ 239, [2013] HLR 4.

315  Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana [1981] 2 Lloyd’s Rep 425 (Lloyd J); [1983] 1 Lloyd’s Rep 146 (CA); [1983] 2 AC 694 (HL).

316  Mardorf Peach & Co Ltd v Attica Sea Carriers Corp of Liberia [1977] AC 850.

317  The Kanchenjunga [1990] 1 Lloyd’s Rep 391 (HL) at 399 (Lord Goff); Western Bulk Carriers K/S v Li Hai Maritime Inc (The Li Hai) [2005] EWHC 735, [2005] 2 Lloyd’s Rep 389.

318  [1972] AC 741 (HL); Finagrain SA Geneva v P Kruse Hamburg [1976] 2 Lloyd’s Rep 508 (CA); Bremer Handelsgesellschaft mbH v Deutsche Conti-Handelsgesellschaft mbH [1983] 1 Lloyd’s Rep 689; Kim v Chasewood Park Residents Ltd [2013] EWCA Civ 239, [2013] HLR 4.

319  Société Italo-Belge pour le Commerce et l’Industrie v Palm and Vegetable Oils (Malaysia) Sdn Bhd [1981] 2 Lloyd’s Rep 695.

320  [1949] AC 76 (HL).

321  [1981] 2 Lloyd’s Rep 425: above, n 315; Bird v Hildage [1948] 1 KB 91 (CA).

322  [2002] 2 P & CR 17 (CA).

323  (1877) 2 App Cas 439; above, para 5.74.

324  [1920] 3 KB 475.

325  [1979] 2 Lloyd’s Rep 57 at 67–68 (Robert Goff J); Cook Industries Inc v Meunerie Liegeois SA [1981] 1 Lloyd’s Rep 359 at 368 (Mustill J).

326  [1981] 2 Lloyd’s Rep 425.

327  Ibid at 430–431 (Lloyd J).

328  [1981] 2 Lloyd’s Rep 695.

329  Ibid at 700 (Robert Goff J); P v P [1957] NZLR 854 (Supreme Ct of New Zealand).

330  Ibid at 701–702.

331  As in Morrow v Carty [1957] NI 174 (High Ct of N Ireland).

332  WJ Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189 (CA) at 213.

333  Treitel (Contract), above n 182, para 3-084. The analogy in question is that of estoppel by representation, which clearly does require proof of detriment; Carr v London and North Western Rly (1875) LR 10 CP 310 at 317 (Brett J).

334  Virulite LLC v Virulite Distribution Ltd [2014] EWHC 366 (QB) at [121] (Stuart-Smith J); MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553, [2017] QB 604 at [61] (Kitchin LJ).

335  Combe v Combe [1951] 2 KB 215 (CA).

336  Ibid at 224 (Birkett LJ).

337  Hughes v Metropolitan Railway (1877) 2 App Cas 439 (HL) at 448; above, para 5.74.

338  Such as the action to forfeit the lease in Hughes v Metropolitan Railway (above, n 337).

339  Thus in Hazel v Akthar (above, para 5.76) the landlord lost his right to object to the application for a new tenancy.

340  Contrast the position in Australia and in the United States, where promissory estoppel can create new rights of action: Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (High Ct of Australia); Restatement (Second) of Contracts, § 90.

341  [1966] 2 QB 167 (CA).

342  (1879) 5 QBD 409 (CA).

343  [1981] 2 Lloyd’s Rep 695.

344  Ibid at 701–702 (Robert Goff J).

345  Above, paras 5.54 (discharge by agreement) and 5.60 (variation).

346  Tyers v Rosedale and Ferryhill Iron Co (1875) LR 10 Ex 195 at 199 (Blackburn J); Panoutsos v Raymond Hadley Corp of New York [1917] 2 KB 473 (CA) at 477–478 (Viscount Reading CJ); Hartley v Hymans [1920] 3 KB 475 at 495 (McCardie J); Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 561 (HL); Ajayi v R T Briscoe (Nigeria) Ltd [1964] 1 WLR 1326 (PC) at 1330 (Lord Hodson); Dunbar Assets plc v Butler [2015] EWHC 2546 (Ch).

347  As in Charles Rickards v Oppenhaim [1950] 1 KB 616 (CA); above, para 5.68.

348  As in Central London Property Trust v High Trees House Ltd [1947] KB 130.

349  Birmingham & District Land Co v London and North Western Rly (1888) 40 Ch D 268 (CA); Ogilvy v Hope-Davies [1976] 1 All ER 683; Nippon Yusen Kaisha v Pacifica Navegacion SA (The Ion) [1980] 2 Lloyd’s Rep 245; Virulite LLC v Virulite Distribution Ltd [2014] EWHC 366 (QB).

350  Chitty, above n 1, para 4-097.

351  This principle is of particular significance in construction contracts: Keating, above n 235, para 8-014; below, para 5.83.

352  West v Blakeway (1841) 2 M & G 729 at 751, 133 ER 940 at 949; Keep, Perceval and Gordon, William (eds), Addison’s Law of Contracts (10th edn, 1903).

353  (1781) 2 Dougl 694, 99 ER 434.

354  1 Roll Abr 453, Com Dig Condition N pl 6.

355  Jerram Falkus Construction Ltd v Fenice Investments Inc (No 4) [2011] EWHC 1935 (TCC) at [47]: see Holme v Guppy (1838) 3 M & W 387, 150 ER 1195; Thornhill v Neats (1860) 8 CB (NS) 831, 141 ER 1392; Courtnay v Waterford Railway (1878) 4 LR Ir 11; Peak Construction (Liverpool Ltd) v McKinney Foundations Ltd (1970) 1 BLR 111 (CA); Gaymark Investments Pty Ltd v Walter Construction Group Ltd (2005) 21 Const LJ 71 (Supreme Ct of Northern Territories); Shawton Engineering Ltd v DGP International Ltd [2005] EWCA Civ 1359, [2006] BLR 1; City Inn Ltd v Shepherd Construction Ltd [2007] CSOH 190, [2008] BLR 269.

356  Multiplex Constructions Ltd v Honeywell Control Systems Ltd [2007] EWHC 447 (TCC), [2007] BLR 195 at [47] (Jackson J).

357  See below, para 13.48.

358  [2007] EWHC 447 (TCC), [2007] BLR 195.

359  Ibid at [56].

360  [2011] EWHC 848 (Comm) (Hamblen J).

361  Ibid at [255].

362  Ibid at [298].

363  Ibid at [234].

364  Glencore Grain Ltd v Goldbeam Shipping Ltd [2002] EWHC 27 (Comm), [2002] 2 Lloyd’s Rep 244; Ocean Marine Navigation Ltd v Koch Carbon Inc (The Dynamic) [2003] EWHC 1936 (Comm), [2003] 2 Lloyd’s Rep 693; Ocean Pride Maritime Ltd Partnership v Qingdao Ocean Shipping Co (The Northgate) [2007] EWHC 2796 (Comm), [2008] 1 Lloyd’s Rep 511.

365  As in Planché v Colburn (1831) 8 Bing 14, 131 ER 305.

366  Above, paras 4.21–4.25.

367  Chitty, above n 1, para 15-155; Treitel, G H, Frustration and Force Majeure (3rd edn, 2014) (‘Treitel (FFM)’), chapter 12; Allen, David, ‘Force majeure’ (2003) 147 SJ 1416; ‘Force majeure clauses’ (2005) 27(2) The Buyer 6–8; Robertson, David, ‘Force majeure clauses’ (2009) 25 J Contract Law 62.

368  Chitty, above n 1, para 15-156; Blythe & Co v Richards Turpin & Co (1916) 114 LT 753; Tsakiroglou v Noblee Thorl GmbH [1962] AC 93 (HL); Huilerie l’Abeille v Société des Huileries du Niger [1978] 2 Lloyd’s Rep 203; Thames Valley Power Ltd v Total Gas & Power Ltd [2005] EWHC 2208, [2006] 1 Lloyd’s Rep 1.

369  Chitty, above n 1, para 15-158; Tennants (Lancashire) Ltd v C S Wilson & Co Ltd [1917] AC 495 (HL) at 510 (Lord Loreburn); Peter Dixon & Sons Ltd v Henderson Craig & Co [1919] 2 KB 778 (CA); Reardon Smith Line Ltd v Ministry of Agriculture [1962] 1 QB 42 (CA) (aff’d in part) [1963] AC 691 (HL).

370  Tandrin Aviation Holdings Ltd v Aero Toy Store LLC [2010] EWHC 40 (Comm), [2010] 2 Lloyd’s Rep 668.

371  Chitty, above n 1, para 15-161.

372  Ibid.

373  Coastal Bermuda Petroleum v VTT Vulcan Petroleum SA (The Marine Star) [1993] 1 Lloyd’s Rep 329 (CA); Mamidoil-Jetoil Greek Petroleum SA v Otka Crude Oil Refinery AD (No 2) [2003] EWCA Civ 1031, [2003] 2 Lloyd’s Rep 635; Mamidoil-Jetoil Greek Petroleum SA v Otka Crude Oil Refinery AD (No 3) [2003] EWCA Civ 617, [2003] 2 Lloyd’s Rep 645; Great Elephant Corp v Trafigura Beheer BV (The Crudesky) [2013] EWCA Civ 905, [2013] 2 All ER (Comm) 992, [2014] 1 Lloyd’s Rep 1; McKendrick, Ewan, ‘The construction of force majeure clauses and self-induced frustration’ [1990] LMCLQ 153.

374  Chitty, above n 1, para 15-155.

375  Trade and Transport Inc v Iino Kaiun Kaisha Ltd [1973] 1 WLR 210.

376  Ibid at 224–227 (Kerr J).

377  Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323 (CA) at 328 (Parker LJ).

378  Chitty, above n 1, para 15-155.

379  Treitel (FFM), above n 367, para 12.038.

380  Warinco AG v Fritz Mauthner [1978] 1 Lloyd’s Rep 151 (CA).

381  Exportelisa SA v Rocco Giuseppe Figli Soc Coll [1978] 1 Lloyd’s Rep 433 (CA).

382  Treitel (FFM), above n 367, para 12.022.

383  Treitel (FFM), above n 367, para 12.033.

384  Bremer Handelsgesellschaft Schaft v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd’s Rep 109 (HL).

385  Bremer Handelsgesellschaft Schaft v Vanden Avenne-Izegem PVBA (above n 384); Avimex SA v Dewulf & Cie [1979] 2 Lloyd’s Rep 57 (HL); Cook Industries Inc v Tradax Export SA [1985] 2 Lloyd’s Rep 454 (CA).

386  Above, paras 5.61–5.69 (waiver) and 5.70–5.81 (equitable estoppel).

387  Bunge Corp v Tradax Export SA [1981] 1 WLR 711 (HL).

388  The Hongkong Fir [1962] 2 QB 26 (CA).

389  Moschi v Lep Air Services [1973] AC 331 (HL) at 350 (Lord Diplock).

390  Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 (HL).

391  Hirji Mulji v Cheong Yue SS Co Ltd [1926] AC 497 (HL).

392  Chapters 10, 11, and 12.

393  Treitel (FFM), above n 367, para 5.051.

394  Jackson v Union Marine Insurance Co Ltd (1874) LR 10 CP 125 at 145 (Bramwell B); Poussard v Spiers & Pond (1876) 1 QBD 410 at 414 (Blackburn J). Whether the promisor can recover the agreed consideration in these cases is a different matter: Sim v Rotherham MBC [1987] Ch 216; Wiluszynski v Tower Hamlets LBC [1989] IRLR 259 (CA).

395  John Lewis Properties plc v Viscount Chelsea [1993] 2 EGLR 77.