Interfoto Picture Library vs Stiletto Visual Programmes - Essay Example

?!LEGAL SKILLS CASE ANALYSIS TEST December Interfoto Picture Library v Stiletto Visual Programmes 10 marks will be awarded for correct grammar, punctuation and spelling. 1. What is the date of the judgment? (2 marks) November 12, 1987. 2. Who was the trial judge and what was his decision? (2 marks) Judge Pearce. Gave judgment to the plaintiffs for the sum claimed. 3. Where was the case heard at first instance? (2 marks) Lambeth County Court. 4. Who were counsel and solicitors in the Court of Appeal? (2 marks) Nicholas Yell for the Defendants. Stephen Lennard for the Plaintiffs. 5. What remedies were Interfoto Picture Library Ltd seeking in the Court of Appeal? (2 marks) They were looking to uphold the judgment of the trial court, which had awarded them substantial damages against the defendant. 6. Which cases were applied by the Court of Appeal? (2 marks) Parker v. South Eastern Railway Company; J Spurling Ltd. v. Bradshaw; Thornton v. Shoe Lane Parking Ltd.; McCutcheon v. David MacBrayne Ltd. 7. In what court was McCutcheon v David MacBrayne Ltd [1964] 1 All ER 430 heard?(1 mark) Court of Session. 8. What are the material facts of Interfoto Picture Library v Stiletto Visual Programmes? (6 marks) The plaintiffs run a photographic transparency lending library. After the defendants inquired, the plaintiffs sent the defendants 47 transparencies and a delivery note that had 9 printed conditions on it. Condition 2 stated that the transparencies must be returned to the plaintiff after 14 days, otherwise there would be a ?5 a day penalty for every day after 14 days that the defendants held onto the transparencies. The defendants returned the transparencies four weeks later, claiming that they did not read the printed conditions. The bill to the defendants was ?3,738. The plaintiffs did try to call the defendants twice before the defendants gave back the transparencies. The defendants refused to pay. 9. Why did Dillon LJ not consider if Condition 2 was a penalty? (2 marks) Because the question of whether or not the Condition 2 would be considered to be a penalty was not taken by the lower courts, and it was not mentioned in the notice of appeal. 10. What does Dillon LJ suggest would have been the effect of Condition 2 if it had been a penalty? (2 marks) It would have been void and unenforceable. 11. What were the two arguments made by the defendant? (6 marks) The defendants claimed that the Condition 2 was never a part of the contract, as the defendants never received the delivery note. They also claimed that the contract between the two parties was formed before they knew about the delivery note. 12. How does the basis for the decision in Parker v South Eastern Rly Co (1877) 2CPD 416 differ from that in Thornton v Shoe Lane Parking Ltd [1956] 1 All ER 686? (2 marks) In Parker, the court looked at the terms as a whole, and decided if the terms, as a whole, were brought to the attention of the other party. In Thornton, the court decided that a particularly onerous term should be brought to the attention of the party, and if that particularly onerous term was not brought to the party's attention, that this term did not become a part of the contract. 13. (a) How did counsel for the plaintiff distinguish Thornton v Shoe Lane Parking Ltd [1956] 1 All ER 686? (2 marks) They state that the Thornton case deals with an exemption clause, and the holding should be limited to exemption clauses. Since their case did not involve an exemption clause, they argued that the holding in Thornton did not apply. (b) Was this distinction was accepted by Dillon LJ and explain his reasoning on the issue. (2 marks) No. Dillon stated that what was stated in the Thornton case was a general application of law, therefore the holding could be applied to any onerous statement in any contract. 14. (a) What principle does Bingham LJ say is not an overriding principle of English law? (1 mark) In making and carrying out contracts, each party must act in good faith. (b) How has English law dealt with this principle? Give examples. (4 marks) In a piecemeal fashion. In equity, unconscionable contracts are struck down. The imposition of exemption clauses are limited by Parliament, as are purchase-hire agreements. Certain classes of contracts require utmost good faith. Penalties are not recoverable. 15. (a) Who were the three judges in Parker v South Eastern Rly Co (1877) 2 CPD 416? (1 mark) Mellish, Baggallay, and Bramwell. (b) What did they each decide? (3 marks) Baggallay felt that the plaintiffs were right on the fact. Bramwell decided that the plaintiffs were wrong on the facts. Mellish thought that there was a misdirection and that there should have been a retrial. 16. Did Bingham LJ believe that there was a simple contractual analysis to the problem he was considering? (2 marks) No. He stated that this case was not a simple contractual analysis of whether there had been an offer and an acceptance. 17. What other authorities does Bingham LJ cite? (4 marks) Hood v. Anchor Line; Spurling Ltd. v. Bradshaw; McCutcheon v. David MacBrayne; Thornton v. Shoe Lane Parking. 18. Explain whether each of the following statements is part of the ratio of Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1988] 1 All ER 348. If you think a statement is part of the ratio, explain why. If you think a statement is not part of the ratio, explain why. (15 marks) i. The more onerous the term the more steps a party has to take to bring that term to the attention of the other party. It is a part of the ratio. In fact, this was, in a nutshell, the reason that the court found in the way that they did. ii. Equity will strike down unconscionable bargains. It was a part of the ratio, in that the concurring opinion cited this statement in stating that this was one way that English courts interpret contracts. However, since it was a part of the concurring opinion, and was only stated in dicta, it is safe to say that this was a minor part of the ratio. iii. Condition 2 was an unreasonable and extortionate clause. It was a part of the ratio. The court actually stated that the clause was unreasonable and extortionate, and, if the clause were not considered unreasonable and extortionate, the implication was that the plaintiffs would not have to do as much to bring the clause to the defendants' attention. iv. The Plaintiffs had not brought Condition 2 to the attention of the defendants. This was a part of the ratio, and this was specifically the reason why the court found as they did. The other phrase above, which states that the more onerous a term is, the more steps a party must take to bring it to the other party's attention was the more general statement of law. The specific statement of fact was that the Plaintiffs did not bring the clause to the Defendants' attention. v. Penalty clauses are void and unenforceable. This was not a part of the ratio, because the issue of whether or not the Condition 2 was a penalty was not brought up by the trial court, nor by either party. 19. Bob hired a van from Jack’s Van Hire to transport his furniture when he moved house. Bob went to Jack’s office to hire the van. Before Bob took the van, Jack asked Bob to sign the last page of the hire contract. As he was in a hurry, Bob signed this quickly, without reading it. The hire contract contained the following term: Condition 54: If the customer drives the vehicle over 50 mph at any time during the rental period, Jack’s Van Hire will charge the customer ?1,000. This is for the wear and tear caused to the vehicle by driving it in excess of 50mph. Bob was caught by the police driving the van at 65mph in a 50mph zone. When Jack’s Van Hire found out about this, it took ?1,000 from Bob’s credit card for driving the van over 50 mph contrary to Condition 54 of the hire contract. Using ONLY the decision in Interfoto Picture Library Ltd v Stiletto advise Bob on what grounds he can argue against the charge made by Jack’s Van Hire. (25 marks) Bob can argue that this is a particularly onerous clause, therefore it should have been brought to his attention. First of all, there were 54 conditions. The argument would be that there were too many terms to read, and that most people would not read all of these terms. Moreover, the Interfoto court implied that, at a bare minimum, onerous terms must at least be discussed between the two parties before signing the contract. The Interfoto court likewise stated that ordinary contract terms become a part of the contract, even if they are not brought to the other party's attention. They become a part of the contract, as long as it is obvious that some terms are a part of the contract. However, when it comes to unusual terms that are not usually a part of a standard contract, then the party must bring this to the other party's attention. The Interfoto court reasoned that terms are becoming more and more one-sided, and more and more complicated, yet the parties who sign the contract continue to assume that the terms involved are reasonable, and that the terms are the same terms that have always been a part of a contract. In other words, parties do not imagine that the terms to which they are signing are different than standard terms, unless the special terms are brought to their attention. If there are unusual terms, then, if they are not brought notice to by the party seeking to enforce the terms, then these terms do not become a part of the contract. In this case, the term in question – that the car can never go over fifty miles per hour – is not only an unusual term for a moving company, but an onerous one. Most people will drive over 50 MPH, and most highways have higher speed limits than that. To ask somebody to drive under the speed limit is not reasonable. This is also a term that one would not suspect would be in a contract, and, if there are a multitudinous terms, as there are here, then to not bring attention to it means that this term is not a part of the contract. Read More