Smith V Land And House Property Corporation

This sample paper on Smith V Land And House Property Corporation offers a framework of relevant facts based on the recent research in the field. Read the introductory part, body and conclusion of the paper below.

From a moral point of view one might say that honest people act in accordance of good faith and fairness. But morals normally originate from religion or culture. The Common Law on the other hand is laissez faire, which means that the law doesn’t interfere a lot in legal affairs of businesses.

It doesn’t sympathise a lot with the nature of good faith and fairness as long as one doesn’t misrepresent and deceive or doesn’t act unconscionably. Moreover in the case of Walford v.

Miles [1992] Lord Ackner states that “The concept of a duty to carry on negotiations in good faith is inherently repugnant to the adversarial position of the parties when involved in negotiations. Each party to the negotiations is entitled to pursue his (or her) own interest, so long as he avoids making misrepresentation”1 This shows that from the judiciaries point of view the law shouldn’t be concerned with good faith and fairness but with negative actions.

This is possibly because the common law wants to promote healthy businesses where parties can pursue their interest in their own way but not misrepresent or deceive the other party.

Harris V Watson

Therefore on one hand the common law wants to promote healthy business but at the same time stop people from misleading other people into a contact.

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The Unfair Terms in Consumer Contracts Regulations 1999 on the other hand implies good faith upon the law. As you can see in Article 5 of the Unfair Terms A contract term which has not been individually negotiated 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 consumer2.

Therefore since we know that the common law doesn’t stress the good faith as much as the Unfair Terms in Consumer Contracts Regulations 1999, I will now move on and asses whether fairness is really necessary and welcome in English Law. Some Lawyers would argue that fairness isn’t necessary and welcome at all because it removes the traditional laissez faire businesses culture. In their opinion the Common Law has already tackled the most important issues in contract Law. This is because it had already developed the necessary tools to allow the courts to police contracts adequately.

This tools include the Law of misrepresentation, The Unfair contracts term act of 1977, duress and inequality in bargaining power. First I will start of with misrepresentation. In Mckendick’s casebook misrepresentation is defined as an unambiguous, false statement of fact or law which is addressed to the party misled, which is material and which induces the contract3 So we can see that in misrepresentation the common law is already providing fairness to the involved parties, to some extent by making sure that a party doesn’t argue another party into a contract by misleading them.

In the case of Esso Petroleum Ltd v. Mardon [1976], which you can read up in the Mckendrick textbook, Esso offered the defendant to buy a petrol filling station which was still under construction. They also told the defendant that the throughput of the petrol station was likely to reach 200 000 gallons a year. But at the end the local authority refused planning permission for the petrol pumps to front on the main street. Instead the, station had to be built back to front with the forecourt at the back. Esso assured the defendant these changes would not affect the projected throughput of petrol.

However the throughput of the petrol that year was only 78000 gallons. The defendant sues Esso for negligent misrepresentation. Now in the court Esso argued that their statement as to throughput was a statement of opinion and not a statement of fact. 4 Esso tried to use the same defence as in Bisset v Wilkinson [1927] where the court decided that the vendors statement was a statement of opinion and not a statement of fact. 5 However the problem Esso faced was that unlike the vendor in Bisset, Esso had more knowledge then the customer had who it induced into the contract.

This made the statement of opinion become a fact. This is why the court decision held that Esso did mislead the consumer into the contract. Furthermore in Smith v Land and house property Corporation justice Bowen argued that we can see that the Common Law always provided fairness to the parties, in these cases to the consumers who deserve it. In Bisset the vendor didn’t have greater knowledge then the consumer so the statement he made suddenly became an opinion rather than a fact. Therefore one can argue that the contract Law already provides its parties with adequate fairness so a new law wasn’t needed.

Similarly another doctrine which promotes fairness in common law is that of duress. Duress is when someone threats someone to induce them into a contract. In common law Duress can terminate a contract if one party is threatened by duress to person, goods and financial duress. The common law tries its best to give justice to people who didn’t willingly want to enter a contract but were forced to enter one. In the case of Barton v. Armstrong. It was argued that Barton was threatened to be murdered if he wouldn’t enter the contract with Armstrong.

However the jury decided that because Barton’s primary reason for entering the contract wasn’t duress but a commercial reason, the court dismissed the appeal of Duress in the court of appeal. However Barton appealed to the Privy council where Per Lord Cross argued that “it did not matter that Barton’s primary motive in agreeing the deed was commercial- that he may have signed it even if the threats had not been made” The case of Barton V Armstrong proves that the common law gives the courts adequate ruling power of a case. As in the previous misrepresentation case the courts were allowed to assess the situation and make their own decision.

Clearly we can see that although in Barton V Armstrong Duress wasn’t the main reason why Barton entered the contract but duress of person was still in place. In my opinion the court didn’t just want to give fairness to Barton in this case but it also wanted to set a bench mark for people who are thinking to use duress to induce people into a contract. Another important doctrine in common law is the doctrine of Consideration. In its very essence consideration means “simply something of value received by a promisor from a promisee.

It can take the form of a right, interest or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility, given, suffered or undertaken by the other. “6 The doctrine of common law sounds very simple. However the complexity with Consideration really starts in sufficient consideration when someone is doing more then he is obliged under his legal duties. For instance in the case of Stilk v Myrick [1809] a captain promised its 9 men remaining crew the split wages of the two deserters if they would sale back with him to London.

However once arrived back in London the captain refused to pay the extra money. In any normal circumstances the claimant would have received the money. However because of a just and proper policy in the case of Harris v Watson which made it clear that a sailor is not entitled to claim any extra wages, which were promised to him at a time when the ship was in danger. Therefore the court decided that the claimant were not entitled of the extra wages. The court came to this decision by looking at various facts. One was that there was no consideration for the extra work before the sailors started their journey.

The sailors already agreed that they would do anything they could before the journey to make sure that the ship returns to London safely at any circumstances. However there are still some lawyers doubting the fairness given to the sailors in this case. Surely the sailors worked overtime and had to work more now then they originally planned and now they would have deserved some extra money. Some lawyers even go that far to question the doctrine of Consideration. Some as Professor Atiyah would argue for the case of Harris v Watson proves there is no coherent doctrine of consideration based on reciprocity.

He states that : “the truth is that the courts have never set out a doctrine of consideration. They have been concerned with the much more practical problem of deciding in the course of litigation whether a particular promise in a particular case should be enforced… When the courts found a sufficient reason for enforcing a promise they enforced it;and when they found that for one reason or another is was undesirable to enforce a promise, they did not enforce it… “7 All in one we can see that the Common Law pretty much tries its best to give people fairness.

The fact that courts are allowed adequately to police contracts is important because in this way they can do their best to provide fairness to people using Law and a bit of good faith. However in the other hand there are also critics of the common law who believe that there need to be a set of rules, which regulates contracts and includes good faith and fairness. One argument is that the replacement of the unfair contract terms act of 1977 was necessary to be replaced by unfair terms in consumer contracts regulations 1999.

The main purpose in the regulations of 1999 is to regulate the unfair terms in contract between consumer and seller. The word consumer has a different meaning in UTCCR 1999 and a different in the UCT 1977. If we look at the regulations then consumer means “any natural person who, in contract covered by these Regulations, acting for purposes which are outside his trade, business or profession. But if we look at the Unfair terms act of 1977 we will find that it doesn’t exclude companies from possible consumers.

A consumer here means “any natural or legal person who, in contract covered by the regulations, is acting for purposes relating his trade, business or profession, whether publicly owned or privately owned. “8 One can see that the regulations of 1999 are much more protective over the consumer then the common law. Further more if you read Regulation 5 (4) “The burden of proof is upon the seller or supplier to show that term has been individually negotiated. “9 The regulations are trying to remove the burden from the supplier they’re not necessarily making the Law fairer for everyone.

In a direct comparison to the common Law in my opinion the common Law provided much more fairness because then the judges still had adequate ruling power and could confront the situation much better than the statute can ever do. The UCTA on the other hand is confined with clauses as the exclusion, limitation and indemnity. As mentioned before the Common Law includes some bits of good faith but still doesn’t recognize a doctrine of good faith. In this way it stands out from many other states in the world. However with the help of the Regulations of 1999 the English law is becoming more aware of fairness and good faith.

However some people again that although Britain never had a doctrine of Good Faith doesn’t mean that it needs one now or didn’t have important bits to it already. But moreover the Unfair terms in consumer contracts regulation 1999 didn’t introduce a doctrine of good faith either. It was never that important before the regulations neither is it now. So one can argue that even tough we have a new law system but we still don’t have a doctrine of good faith, which makes some question themselves did we really need the changes from common law to the regulations if the doctrine of good faith hasn’t even become a doctrine yet.

Maybe the doctrine of good faith will never play an important part in English Law. The English law was never about good faith and fairness, it always promoted a laissez faire business culture. Therefore I think that the Common Law was already in itself a very fair sets of Law which took great emphasis on good faith. The misrepresentation made sure that people weren’t mislead into a contract but still promoted a healthy business. The doctrine of Duress made sure that none would be forced into signing a contract by threatening them about their life, wealth or goods.

Common Law always promoted healthy and fair businesses and not business deals under duress. Consideration is the very basic idea of a business You give me some equally valuable for my goods, which the common law wanted to uphold. The Common Law always tried its best to be fair by not letting people mislead, forcefully induce people to contacts. However on the other hand the regulations of 1999 want to give me more security to consumers. Especially after it includes companies as well to consumers.

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Smith V Land And House Property Corporation. (2019, Dec 07). Retrieved from

Smith V Land And House Property Corporation
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