LLB Contract Law - 2024 Paper 2

Critically evaluate the doctrine of promissory estoppel as developed in Central London Property Trust Ltd v High Trees House Ltd (1947). To what extent does promissory estoppel operate as a "shield and not a sword" in English law? Consider whether the doctrine adequately protects parties who rely on promises that lack consideration, and discuss whether English law should follow the Australian approach in Waltons Stores (Interstate) Ltd v Maher (1988) by allowing promissory estoppel to found a cause of action. Reference should be made to the requirements established in Combe v Combe (1951) and the suspensory nature of the doctrine as explained in Tool Metal Manufacturing Co v Tungsten Electric Co (1955).

Martha advertises her vintage car for sale in a local newspaper for £25,000. On Monday, Tom telephones Martha and says "I would like to buy your car. I will pay £23,000." Martha replies, "I will think about it and let you know by Friday." On Tuesday, Martha writes to Tom saying "I accept your offer of £23,000." She posts the letter at 2pm. On Wednesday morning, Martha changes her mind and telephones Tom at 9am to say she no longer wishes to sell. Tom receives Martha's letter of acceptance on Thursday. Meanwhile, on Tuesday evening, Ursula emails Martha offering £26,000 for the car. Martha immediately replies by email: "I accept, subject to contract." Ursula pays a £2,600 deposit. Martha now wishes to sell the car to the highest bidder. Advise all parties as to whether any binding contracts have been formed.

Sarah, aged 78, has been living with her nephew, Kevin, since her husband died five years ago. Kevin manages all of Sarah's financial affairs. Sarah owns a valuable property in London worth £1.2 million. Kevin persuades Sarah to transfer the property to him for £200,000, telling her that the property market is about to crash and that she will lose most of her investment. Kevin also tells Sarah that if she does not sell to him, he will move out and she will have to manage on her own. Sarah, who suffers from mild cognitive decline and is heavily dependent on Kevin for daily care, agrees to the transfer. Six months later, Sarah's daughter, Rachel, discovers the transaction and seeks legal advice. The property has actually increased in value to £1.4 million. Advise Rachel on any claims that may be available to set aside the transfer, with reference to the doctrines of undue influence and unconscionability.

Critically evaluate the rules governing the remoteness of damage in contract law. Analyse the relationship between the first and second limbs of the rule in Hadley v Baxendale (1854) and consider whether the reformulation of the test in The Heron II (1969) and the more recent decision in Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) (2009) have provided greater clarity or introduced further uncertainty. Discuss whether the assumption of responsibility approach advocated by Lord Hoffmann in The Achilleas should replace the traditional foreseeability test.

Precision Engineering Ltd ("PE") contracts with AeroSpace Components Ltd ("AC") to manufacture 500 specialist titanium brackets for use in aircraft engines, at a price of £400 per bracket (total £200,000), delivery by 1 September. The contract states that time is of the essence. On 15 August, a major fire at PE's factory destroys all the specialist tooling needed to produce the brackets. PE's insurers confirm the tooling cannot be replaced for at least six months. PE argues the contract is frustrated. AC responds that PE could source the brackets from a German manufacturer, Braun GmbH, at a cost of £700 per bracket. PE says this is economically unviable. AC has already entered into a sub-contract with Boeing for the supply of assembled engine components using the brackets. AC stands to lose a £2 million contract with Boeing if the brackets are not delivered on time. Advise the parties on the doctrine of frustration and the consequences if the contract is held to be frustrated.