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Contract and Human Rights

Year 1 / ASYear 2 / A-Level AQA, OCR, WJEC/Eduqas

Contract formation (offer, acceptance, consideration, intention, privity) plus the HRA 1998 (ss.3, 4, 6), ECHR Articles 2-11 and PACE 1984 police powers - AQA 7162 Paper 3 and OCR H418 Component 3. Case-driven revision with mark-scheme answers for A* performance.

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🎯 Learning Objectives

📋 Key Definitions and Core Concepts

Offer: A definite promise to be bound on specified terms, made with the intention that it will become binding on acceptance - as opposed to an invitation to treat.
Invitation to treat: A statement inviting others to make offers or to negotiate: advertisements (Partridge v Crittenden), shop-window displays (Fisher v Bell), tenders and goods on self-service shelves.
Unilateral contract: A contract where acceptance is by performance of the offer's terms rather than by a return promise - Carlill v Carbolic Smoke Ball Co (1893); communication of acceptance is waived.
Consideration: The price of a promise - some benefit to the promisor or detriment to the promisee (Currie v Misa (1875)). It must move from the promisee and be sufficient (but need not be adequate: Chappell v Nestle (1960)).
Promissory estoppel: An equitable defence (High Trees (1947)) preventing a party from going back on a clear promise, intended to affect legal relations, which the promisee has relied on - a shield, not a sword (Combe v Combe (1951)).
Privity of contract: Only a party to a contract may sue or be sued on it (Dunlop Pneumatic Tyre Co v Selfridge (1915)); modified by the Contracts (Rights of Third Parties) Act 1999, s.1.
Postal rule: Where post is a reasonable or contemplated means of acceptance, acceptance takes effect on posting, not receipt (Adams v Lindsell (1818)) - subject to exceptions for wrongly addressed letters and express exclusion.
Declaration of incompatibility: Under HRA 1998, s.4, a superior court may declare that legislation is incompatible with a Convention right; it does not affect the validity or continuing enforcement of the legislation - only Parliament can amend it.
Public authority: Under HRA 1998, s.6(3), courts, tribunals and any body whose functions are of a public nature (government departments, local authorities, police, NHS); s.6(1) makes incompatible acts of such bodies unlawful.
Warrant of further detention: Under PACE 1984, ss.43-44, a magistrates' court may authorise continued detention beyond 36 hours, up to a maximum of 96 hours in total, for indictable or either-way offences.

Formation: offer, acceptance and the postal rule (AQA 3.4.1; OCR H418 Component 3, contract option)

An offer is a definite promise to be bound on specified terms. The classic battleground is whether a statement is an offer or an invitation to treat - an invitation to others to make offers. In Partridge v Crittenden (1968) an advertisement of wild birds at 25 shillings each was an invitation to treat, so the seller could not be convicted of offering birds for sale. In Fisher v Bell (1961) a flick knife displayed in a shop window was likewise an invitation to treat, not an offer for sale under the Restriction of Offensive Weapons Act 1959 - the shopkeeper escaped liability, and Parliament promptly closed the gap by amending the Act.

The key exception is the unilateral offer to the world: Carlill v Carbolic Smoke Ball Co (1893). The company's advertisement promised £100 to anyone who caught influenza after using the smoke ball as directed, and the £1,000 deposited in the bank showed sincerity - an intention to be bound. The Court of Appeal held this was an offer capable of acceptance by performance - using the smoke ball was acceptance, and communication was waived. A* point: in unilateral contracts the contract completes on performance; in bilateral contracts acceptance must be communicated first.

An offer can be terminated by rejection, counter-offer, revocation, lapse of time or death. A counter-offer destroys the original offer: Hyde v Wrench (1840) - Wrench offered a farm at £1,000; Hyde countered at £950; Wrench refused; Hyde's later 'acceptance' of £1,000 failed because the offer was already dead. Revocation must be communicated before acceptance (Byrne v Van Tienhoven (1880)), and an offer lapses after a reasonable time (Ramsgate Victoria Hotel v Montefiore (1866)).

Acceptance must be a mirror image of the offer and must be communicated to the offeror; silence is not acceptance (Felthouse v Bindley (1862) - the nephew's silence could not bind him).

The postal rule: in Adams v Lindsell (1818) acceptance took effect on posting, not receipt - the offeror is taken to accept the risk of postal delay. The rule only applies where post is a reasonable or contemplated means of acceptance, with exceptions: the letter must be correctly addressed and stamped (Household Fire Insurance Co v Grant (1879) - even an acceptance lost in the post bound the offeror), and the offeror may exclude it (Holwell Securities v Hughes (1974) - notice in writing required actual communication). For instantaneous communications, acceptance takes effect when and where it is received: Entores v Miles Far East Corp (1955), clarified in Brinkibon v Stahag Stahl (1983).

Consideration, promissory estoppel and intention to create legal relations (AQA 3.4.1)

Consideration is the price of a promise: Currie v Misa (1875) - a benefit to the promisor or a detriment to the promisee. It must move from the promisee (Tweddle v Atkinson (1861) - the groom could not sue on a promise made for his benefit). It need not be adequate but must be sufficient: in Chappell v Nestle (1960) three chocolate wrappers were good consideration because Nestle stipulated for them.

Past consideration is no consideration: Re McArdle (1951) - work done before the promise of payment could not support the later promise.

Performance of an existing contractual duty is not good consideration: Stilk v Myrick (1809) - sailors promised extra wages simply to complete the voyage after desertions gave nothing extra. The modern approach is Williams v Roffey (1991): a subcontractor's promise to complete on time was supported by a practical benefit to Roffey (avoiding the penalty clause in the main contract). Limits: no economic duress, and the principle does not extend to part payment of a debt.

Part payment of a debt: Pinnel's Case (1602), reaffirmed in Foakes v Beer (1884) - payment of a lesser sum cannot discharge the whole debt unless made under a deed, supported by different consideration (early payment, goods, a different place), or equity intervenes.

Promissory estoppel: Central London Property Trust (High Trees House) Ltd v University Colleges (1947), Denning J - the landlord's wartime promise to accept half rent bound him while the promise lasted. Elements: a clear and unequivocal promise, intended to affect legal relations, on which the promisee relied. It is a shield not a sword (Combe v Combe (1951) - no cause of action), it only suspends rights (full rent was payable again after the war), and it applies only where it would be inequitable to go back.

Intention to create legal relations turns on rebuttable presumptions. Domestic and social agreements are presumed not intended to be binding: Balfour v Balfour (1919) - a husband's promise of a monthly allowance while he worked abroad was unenforceable. But the presumption is rebutted where the relationship has broken down: Merritt v Merritt (1970) - a separated couple's written agreement about the house was binding; the marriage was effectively over. Commercial agreements are presumed to have legal intention, rebuttable only by clear wording such as an honour clause (Rose and Frank Co v Crompton (1925)). In problem questions intention is usually decided in a sentence or two - do not spend long on it.

Privity: Dunlop v Selfridge, Twisted Dreams and the 1999 Act (AQA 3.4.1)

At common law only a party to a contract may sue or be sued on it, and consideration must move from the promisee. In Dunlop Pneumatic Tyre Co v Selfridge and Co (1915) Dunlop sold tyres to the wholesaler Dew under a clause fixing resale prices; Selfridge bought from Dew, but Dunlop could not enforce the price clause against Selfridge - Dunlop was not a party and had given no consideration. In Tweddle v Atkinson (1861) the groom could not sue on the fathers' agreement even though it was expressly intended for his benefit.

The rule caused injustice, and courts worked around it: agency, a trust of the promise (Beswick v Beswick (1968) - the widow enforced via specific performance), collateral contracts (Shanklin Pier v Detel Products (1951)) and assignment. Asymmetrically, a third party could be sued on an exemption clause (the shield) but could not rely on one (the sword): Scruttons Ltd v Midland Silicones (1962), where Lord Reid invited Parliament to act.

Parliament did so in the Contracts (Rights of Third Parties) Act 1999. Under s.1(1) a third party may enforce a term of the contract if the term expressly provides that he may (s.1(1)(a)) or purports to confer a benefit on him (s.1(1)(b)). The third party must be identified by name, as a member of a class or by description, or be identifiable when performance falls due. By s.1(4) the third party has the same remedies as if he were a party; under s.2 the parties cannot rescind or vary so as to extinguish the third party's entitlement once he has assented, relied and the promisor knows, or reliance is reasonably presumed; under s.3 the promisor keeps all the defences against the promisee.

A* detail: Prudential Assurance Co Ltd v Ayers (2007), the 'Twisted Dreams' case - after a fire in premises leased from Prudential by Ayers and occupied by the nightclub Twisted Dreams, the nightclub could rely on the head lease's exclusion clause under s.1(1)(b) despite not being named in it - the Act goes beyond named third parties and cures the Scruttons shield/sword problem. The Act applies only to contracts made after 11 May 2000 - always check the date in the problem.

Human rights: the HRA 1998, Convention articles and police powers (AQA 3.5.1-3.5.2; OCR H418 Component 3, human rights option)

In English law rights are not granted by the state - the starting point is residual liberty: you may do anything the law does not prohibit. Before the Human Rights Act 1998 (in force 2 October 2000), rights were protected only through the common law, statutes and the ECHR in Strasbourg (individual petitions from 1966). The HRA made Convention rights directly enforceable in UK courts without entrenching them - Parliament remains sovereign and can still legislate contrary to them. The Act has vertical effect: it binds public authorities. Horizontal effect is only indirect - courts are themselves public authorities (s.6(3)), so they must develop the common law compatibly.

s.6(1) makes it unlawful for a public authority to act incompatibly with Convention rights. s.3 requires primary and subordinate legislation to be read and given effect compatibly so far as possible - a strong interpretive obligation exercised before any declaration is contemplated. In R v Lambert (2001) the reverse burden in s.28(2) of the Misuse of Drugs Act 1971 was read down to an evidential burden to preserve Article 6(2) compatibility. In Ghaidan v Godin-Mendoza (2004) 'living with the original tenant as his or her wife or husband' in the Rent Act 1977 was read to include a same-sex partner - s.3 can go to the very edge of interpretation, but cannot contradict the underlying thrust of the legislation.

s.4: where no compatible reading is possible, a superior court may make a declaration of incompatibility. It does not affect the validity or continuing enforcement of the legislation - only Parliament can change it, though ministers usually respond, potentially by fast-track remedial order under s.10. A v Secretary of State for the Home Department (2004), the Belmarsh case: s.23 of the Anti-terrorism, Crime and Security Act 2001, permitting indefinite detention of foreign terrorist suspects, was incompatible with Article 5(1) (and Article 14); the government responded with the Prevention of Terrorism Act 2005 (control orders) - showing both the limits of judicial power and the persuasive force of declarations.

ArticleRightKey authority and exam link
2Right to lifeProcedural duty of independent inquiry into deaths involving state responsibility - R (Middleton) v West Somerset Coroner (2004); positive duty to protect life - Osman v UK (1998)
3Prohibition of torture and inhuman or degrading treatmentAbsolute - no balancing; R (Limbuela) v SSHD (2005) - leaving an asylum seeker destitute breached Article 3
5Liberty and securityPrompt judicial review of the lawfulness of detention (Article 5(4)) - Fox, Campbell and Hartley v UK (1990); delay without judicial review breached Article 5(3) in Brogan v UK (1988)
6Fair trialIndependent and impartial tribunal, presumption of innocence (Article 6(2) - the basis of R v Lambert), legal representation; applies to criminal and civil litigation
8Private and family life, home, correspondenceQualified right; Gillan and Quinton v UK (2010) - blanket s.44 Terrorism Act 2000 stop-and-search lacked safeguards; privacy developed through confidence in Campbell v MGN (2004)
10Freedom of expressionQualified; protects even offensive or shocking speech (Handyside v UK (1976)); R (Simms) v SSHD (2000) - prisoners' right to interview journalists upheld as a common law right
11Freedom of assembly and associationIncludes trade union membership; ASLEF (No 2) v UK (2007) - union could not be forced to retain a BNP member

Police powers under PACE 1984 and its Codes of Practice (A-C) balance effective law enforcement against the Convention rights. s.1 stop and search: in public places, on reasonable suspicion that a person carries stolen or prohibited articles (including bladed items). Safeguards: genuine reasonable grounds, only a jacket, outer coat or gloves may be removed (s.2, Code A), and a written record. The blanket s.44 Terrorism Act 2000 power, usable without suspicion, lacked safeguards and was incompatible with Articles 5 and 8 (Gillan and Quinton v UK (2010)).

s.24 arrest: a constable may arrest without warrant anyone reasonably suspected of committing, having committed or being about to commit an offence, if arrest is necessary for one of the s.24(5) criteria (unknown name or address, preventing disappearance or harm, prompt and effective investigation). Citizens' arrests (s.24A) are narrower - indictable offences and necessity only.

PACE detention timeline and safeguards
  • s.36/s.40 - the custody officer authorises detention and must review whether it remains necessary
  • s.41 - detention may not exceed 24 hours without charge
  • s.42 - a superintendent may extend by up to 12 hours (36 total) for indictable or either-way offences on reasonable grounds
  • ss.43-44 - a magistrates' warrant of further detention, up to 96 hours in total
  • s.56 - right to have someone informed of the arrest; s.58 - right to consult a solicitor, free if means-tested; Code C - breaks, recorded interviews, appropriate adult for juveniles and vulnerable detainees
  • Fox, Campbell and Hartley v UK (1990) - Article 5(4) requires a prompt judicial review of detention with wide powers; delay and narrow review breached the Article

Evaluation: police powers are extensive but hedged with safeguards; the exam reward lies in weighing crime control against due process. Remedies for breach: a complaint to the IOPC, civil actions (false imprisonment, trespass to the person) and a claim under HRA 1998, s.7. Detention beyond the statutory limit is false imprisonment even if in good faith (R v Governor of Brockhill Prison, ex p Evans (2000)).

💡 Worked Example

Exam-style: Jai posts a letter to Kim on 1 March offering to sell her his motorbike for £3,000, adding that the offer will remain open until 10 March. On 3 March Kim posts a letter accepting the offer. On 4 March Jai posts a letter revoking the offer, which arrives on 5 March, one hour after Kim's acceptance. The written contract of sale includes a clause stating that Lila, Kim's sister, may borrow the motorbike at weekends. Jai now refuses to sell, arguing first that the motorbike is really worth £4,500, and secondly that Lila has no rights under the contract because she was never a party to it. Discuss. [AQA Paper 3, 25 marks]
Mark-scheme logic: The answer must hit: <strong>(1) Formation by post (AO1/AO2)</strong> - state the postal rule (<em>Adams v Lindsell</em> (1818)): Kim's acceptance took effect on posting on 3 March, so the contract was formed before Jai's revocation was even posted; revocation arriving on 5 March is ineffective (<em>Byrne v Van Tienhoven</em> (1880) - revocation must be communicated before acceptance). <strong>(2) The promise to keep the offer open (AO1/AO2)</strong> - although Jai promised to keep the offer open until 10 March, Kim gave no consideration for that promise, so it is not an enforceable option and the offer was in principle revocable (<em>Routledge v Grant</em> (1828)) - but here revocation came too late. <strong>(3) Adequacy of consideration (AO1/AO2)</strong> - Jai's argument that the bike is worth £4,500 fails: consideration need not be adequate, only sufficient (<em>Chappell v Nestle</em> (1960); <em>Currie v Misa</em> (1875)) - £3,000 is plainly sufficient. <strong>(4) Intention (AO1/AO2)</strong> - this is a commercial transaction for the sale of goods, so legal intention is presumed (<em>Balfour v Balfour</em> presumption does not apply). <strong>(5) Lila's position (AO1/AO2/AO3)</strong> - at common law Lila has no rights: only parties may sue (<em>Dunlop Pneumatic Tyre Co v Selfridge</em> (1915); <em>Tweddle v Atkinson</em> (1861)). But under the Contracts (Rights of Third Parties) Act 1999, s.1(1)(b) the clause purports to confer a benefit on Lila, who is expressly identified by name (s.1(3)); she may enforce it with the same remedies as a party (s.1(4)), and Jai and Kim cannot vary or rescind so as to remove her entitlement once she has relied or assented (s.2). Contrast <em>Prudential Assurance v Ayers</em> (2007) - third parties can rely on benefit clauses even when unnamed. <strong>(6) Conclusion (AO3)</strong> - Kim can enforce the sale (contract formed 3 March); Jai's arguments fail; Lila may enforce the weekend borrowing clause under s.1(1)(b), though she could not sue on the price terms of the contract. Stronger answers evaluate whether reform of privity has gone too far or strikes the right balance.

❓ Practice Questions & Mark Schemes

Explain, with reference to Partridge v Crittenden, Fisher v Bell and Carlill v Carbolic Smoke Ball Co, when an advertisement is an offer rather than an invitation to treat. [AQA Paper 3, 12 marks]
Answer: AO1: An offer is a definite promise to be bound on specified terms; an invitation to treat invites others to make offers. Advertisements are normally invitations to treat: <em>Partridge v Crittenden</em> (1968) - an advert of wild birds at 25 shillings was not an offer for sale; <em>Fisher v Bell</em> (1961) - a flick knife in a shop window was not an offer, so there was no offence under the Restriction of Offensive Weapons Act 1959. Exception: where an advertisement is a unilateral offer to the world - <em>Carlill v Carbolic Smoke Ball Co</em> (1893): the promise of £100 for using the smoke ball as directed was an offer capable of acceptance by performance, because the wording showed an intention to be bound and the £1,000 bank deposit demonstrated sincerity; communication of acceptance was waived. AO2: apply each rule to the facts before concluding - the general rule covers most adverts, the Carlill exception applies only where the wording is sufficiently definite and promissory.
Ravi posts a letter of acceptance of Ben's offer to sell his car for £4,000, correctly addressed and stamped. The letter is lost in the post and never arrives. Ben, hearing nothing, sells the car to Chandra for £4,500. Advise Ravi. [OCR H418 Component 3, 20 marks]
Answer: AO1: the postal rule - <em>Adams v Lindsell</em> (1818): where post is a reasonable or contemplated means of acceptance, acceptance takes effect on posting. The exception for lost or misdirected letters: <em>Household Fire Insurance Co v Grant</em> (1879) - an acceptance lost in the post still bound the offeror, provided the letter was correctly addressed and stamped. AO2: Ravi posted a correctly addressed acceptance, so the contract was formed on posting even though the letter never arrived; Ben's sale to Chandra is a breach. AO3/evaluation: the rule shifts the risk of postal delay to the offeror, which is defensible where the offeror chose post, but it can be excluded - <em>Holwell Securities v Hughes</em> (1974) required actual communication - and does not govern instantaneous communications (<em>Entores</em> (1955); <em>Brinkibon</em> (1983)). Conclusion: Ravi has a binding contract and may claim damages - expectation measure, the £500 difference between the contract price and Ben's resale, subject to mitigation.
Theo promises his builders a £1,000 bonus to finish an extension on time, although the contract already required on-time completion, which they then do; Theo refuses to pay. Separately, Theo owes Uma £10,000; Uma agrees in writing to accept £6,000 in full settlement, which Theo pays; Uma now sues for the £4,000 balance. Advise the builders and Uma. [AQA Paper 3, 25 marks]
Answer: Builders: <strong>(a)</strong> under <em>Stilk v Myrick</em> (1809) performance of an existing contractual duty is not good consideration, so the bonus promise would fail; <strong>(b)</strong> under the modern approach in <em>Williams v Roffey</em> (1991) a practical benefit to the promisor - avoiding the penalty clause for late completion, securing the subcontractor's continued performance - is good consideration, so the builders are likely to succeed; note the limits - no economic duress, and the principle does not apply to part payment of a debt. Uma: under <em>Pinnel's Case</em> (1602) and <em>Foakes v Beer</em> (1884) part payment of a debt does not discharge the whole debt unless made under a deed, with different consideration (here there was none - early payment or goods would have sufficed), or unless equity intervenes. Promissory estoppel (<em>High Trees</em> (1947)) is a shield, not a sword (<em>Combe v Combe</em> (1951)) - Uma may sue for the balance, though estoppel could defend a claim by Theo, not create one for him. Conclusion: the builders succeed via <em>Williams v Roffey</em>; Uma recovers the £4,000 balance unless the settlement was made under a deed; evaluation should weigh whether <em>Williams v Roffey</em> has blurred the doctrinal line or pragmatically filled a gap.
Explain and evaluate how the Contracts (Rights of Third Parties) Act 1999 has reformed the common law rule in Dunlop Pneumatic Tyre Co v Selfridge. Refer to Prudential Assurance Co Ltd v Ayers. [AQA Paper 3, 15 marks]
Answer: AO1: the common law rule - only a party may sue or be sued and consideration must move from the promisee (<em>Dunlop v Selfridge</em> (1915); <em>Tweddle v Atkinson</em> (1861)); judicial workarounds (trust - <em>Beswick v Beswick</em> (1968); collateral contract - <em>Shanklin Pier</em> (1951)) and the asymmetry that third parties could be sued on exemption clauses but could not rely on them (<em>Scruttons v Midland Silicones</em> (1962)). AO1: the Act - s.1(1)(a) express provision or s.1(1)(b) benefit-conferment; identification by name, class or description; s.1(4) same remedies as a party; s.2 restrictions on rescission and variation once the third party has relied or assented; s.3 defences preserved. AO2: <em>Prudential Assurance v Ayers</em> (2007) - the Twisted Dreams nightclub could rely on the exclusion clause in the head lease under s.1(1)(b) although unnamed, showing the Act reaches beyond named third parties. AO3/evaluation: the Act cures the shield/sword problem and obvious injustice, but criticism remains - it applies only to contracts made after 11 May 2000, leaves old contracts governed by the common law, and courts still debate when a term 'purports to confer a benefit'; a balanced conclusion on whether reform went far enough earns the top band.
Police officers stop and search Sadiq in a public street under PACE 1984, s.1 on reasonable suspicion that he is carrying a bladed article; nothing is found. He is then arrested under s.24 on suspicion of theft and detained for 40 hours before release without charge. He never asked for a solicitor and the custody officer did not tell him of the right. Discuss whether the police acted lawfully and whether Sadiq has any remedy. [OCR H418 Component 3, 20 marks]
Answer: Stop and search: <strong>s.1 PACE 1984</strong> permits stop and search in a public place on reasonable suspicion of stolen or prohibited articles, including bladed items, with safeguards - genuine grounds, limited removal of clothing (s.2, Code A) and a written record; on these facts the search appears lawful, though Article 8 engagement should be noted and the proportionality of repeated searches discussed. Arrest: <strong>s.24</strong> permits arrest without warrant on reasonable suspicion plus one necessity criterion (s.24(5)) - lawful if the officer genuinely suspected theft and arrest was necessary, for example to enable prompt investigation. Detention: <strong>s.41</strong> caps detention at 24 hours; extension beyond that requires a superintendent's authorisation to 36 hours (s.42) or a magistrates' warrant of further detention to 96 hours (ss.43-44) - 40 hours without either is unlawful, and detention beyond the lawful period is false imprisonment even if in good faith (<em>R v Governor of Brockhill Prison, ex p Evans</em> (2000)). Safeguards: s.58 (right to a solicitor) and Code C were breached; Article 5(3)-(4) requires prompt judicial control of detention (<em>Fox, Campbell and Hartley v UK</em> (1990)). Remedies: complaint to the IOPC, an action for false imprisonment with nominal or aggravated damages, and a claim under HRA 1998, s.7 for breach of Article 5. Conclusion: search and arrest likely lawful; the detention was unlawful and the failure to caution on the s.58 right compounds the breach.

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