#5803 - Formalities, Intention To Contract And Capacity - Irish Contract Law

Formalities

Statute of Frauds (Ireland) 1695

s.2 – No action shall be brought...whereby to charge the defendant on special promise to answer for debt, default or miscarriage of another person or to charge any person on any agreement made upon consideration of marriage or upon any contract of sale of lands, tenements or heridatements, or any interest in or concerning them or any agreement that is not to be made within the space of one year from the making thereof, unless upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the person therewith charged or some other person by him lawfully authorised.

Sale of Goods Act 1893

s.4 (1) A contract for the sale of goods worth ten pounds and upwards shall not be enforceable by any buyer unless the buyer shall accept part of the goods so sold and actually receive the same, or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract be made and signed by the party to be charged or his agents on his behalf.

Consumer Credit Act 1995

Hire purchase, credit agreements and moneylending contracts must be in writing

Boyle v Lee (SC 1991)

Facts

• The plaintiff's agent sent a letter to the defendant's solicitors accepting the sale of their house to him for 90,000, 'subject to contract'

• The defendant then refused to sell the land and the plaintiff claimed that the document was a note or memorandum of a concluded oral agreement

Issue

• Formalities – Statute of Frauds – Documents 'subject to contract'

Judgment

• Finlay C.J.

• The letter, being 'subject to contract' did not constitute a note or memorandum – it is strong prima facie evidence of the absence of a concluded contract, which would require strong countervailing evidence to be rebutted.

• This is because the Statute of Frauds intended for the written evidence of a contract to take priority of the oral evidence.

• Hederman J

• McCarthy J

• O'Flaherty J

• Egan J

Maddison v Alderson (HoL 1883)

Facts

• The plaintiff was the housekeeper of the owner of fee simple estate, who promised her a life estate in the land in return for her service.

• The heir-at-law sued for the estate and the plaintiff claimed that, in the case that the will was invalid she would still be entitled to the estate by virtue of the agreement between her and her master.

Issue

• Statute of Frauds – Equity – Part performance

Judgment

• EARL OF SELBORNE L.C. (concurring)

• If all parts of a contract are performed save the actual conveyance, it would raise an equity that would not allow the court to view the contract as a nullity – the nature of such an equity could not be ascertained without taking the contract into account and the Statute of Frauds could not have intended to create the injustice that would result from failing to honour those equities.

• The Statute of Frauds only covers situations where the action is taken on the words of the contract alone and equities such as in the above case have not been raised.

• However in this case the plaintiff's actions are not sufficent evidence of such a contract – the plaintiff was free to leave her employer at any time.

• LORD BLACKBURN (concurring)

• It would be stretching the law of part performance to far to apply it to this case – in the past it has only taken effect where there is an actual transfer of the possession of land.

• LORD O'HAGAN (concurring)

• To be sufficient to raise an equity, the act relied upon must be unequivocal – A) it must definitely relate to the agreeement alleged and the land at the heart of the agreement, B) it must be impossible that it could concern any other agreement and C) it must be possible that, without more, they demonstrate the existence of the contract.

• In this case the actions of the plaintiff could be explained by supposing that she stayed merely in the hope of continuing to enjoy her present comforts and gaining some abstract future reward.

• The agreement between the parties was too uncertain to be enforced under the doctrine of past performance.

• LORD FITZGERALD (concurred)

Steadman v Steadman (HoL 1974)

Facts

• The parties had dissolved their marriage and one of the terms of their settlement was a joint interest in the family home.

• At a later point the parties agreed that if the husband paid 1500 and paid certain sums for maintenance that the wife would alienate her interest in the home.

• The wife later refused to sign the transfer and the husband claimed that this was breach of the agreeement.

Issue

• Statute of Frauds – Part Performance

Judgment

• Lord Reid (concurring)

• If one party to an agreeement such as this stands by while the other party acts on it and prejudices himself, then they can not later claim that the agreement is unenforceable.

• There are two steps in a case such as this – A), examine whether the acts of part performance indicate and existence of an oral contract and if this is so, B) only then should the court look to the oral contract

• The standard of proof for the existence of a contract should be the balance of probabilities.

• Lord Morris of Borth-y-Gest (dissenting)

• The doctrine of part performance only applies, where a reasonable person observing the acts of the parties would have surmised that they applied to the sale of the land in question.

• That is not so in this case – the payment of money by itself does not indicate that there was an agreement concerning land.

• Viscount Dilhorne (concurring)

• The res gestae alleged by the husband are 1) the announcement of the agreement reached to the magistrates in the divorce court, 2) the payment by the plaintiff of the maintenance money, 3) the dispatch to the defendant's solicitor of the form to transfer her interest

• These acts constitute a part performance in law.

• Such acts do not need to concern the land to constitute part performnce, but in this case they did i.e. the announcement and dispatch were in connection with the land.

• Lord Simon of Glaisdale (concurring)

• The acts of part performance do not need to unequivocally point to the existence of the particular contract, but merely that a contract exists.

• It is unnecessary to decide whether the acts of part performance must be related to the land, as in this case two of the acts were.

• The acts of part performance must be established on the balance of probabilities.

• Payment of money can be an act of part performance, but it must be proven on the balance of probabilities that it was connected with the agreement (this must be inferred from the circumstances, not attested to by oral evidence.)

• Lord Salmon (concurring)

• The court in Maddison, were not deciding whether payment of money could constitute part performance, hence their statements on the matter are obiter.

• If the 100 is looked at in light of the circumstances it was clearly in connection with the agreement concerning land.

• Thus the doctine of part performance applied.

Actionstrength v International Glass Engineering (HoL 2003)

Facts

• The plaintiffs were a recruitment company who providing construction workers to the first defendant.

• The first defendants fell into arrears and the plaintiffs threatened to pull their men off site.

• The second defendants' contractor agreed to pay their debts for them if the plaintiffs refrained from removing their men, to which the plaintiffs agreed.

• Later the plaintiffs removed their men and sued the defendants' and their contractor, the latter entering a defence under the statute of frauds.

Issue

• Statute of Frauds – Part Performance

Judgment

• Lord Bingham of Cornhill (concurring)

• The plaintiffs rely on nothing but the oral guarantee of the defendants to establish the agreement – there was no representation that they would honour it in the absence of a written agreement or that they would later commit the promise to writing or that the agreement was not one covered by the statute of frauds, nor was there any payment from the defendants that indicated the existence of an oral agreement.

• If there was to be an estoppel in this case, there would be one in every case involving assumption of debt under the statute of frauds which would serve to render the statue inoperable.

• Lord Woolf (concurring)

• Lord Hoffmann (concurring)

• The doctine of part performance exists for two reasons – 1) the actions of parties could raise an estoppel and 2) the actions could themselves be evidence of a contract.

• In the case of contracts regarding land, the statute and doctrine can co-exist, as the statute of frauds continues to apply while the contract remains executory and is only subject to modification when it is acted upon.

• However in cases of debt, the party seeking to enforce it will always have acted to his prejudice by advancing credit.

• Thus this contract is not enforceable.

• Lord Clyde (concurring)

• Beyond the oral agreement, the defendants gave the plaintiffs no indication that they would not rely on their legal rights – thus no question of estoppel is raised and the Statute applies.

• Lord Walker of Gestingthorpe (concurring)

• It would render s.4 of the Statute of Frauds inoperable, if an oral agreement without more raised an estoppel in a case such as this.

• Thus the contract is unenforceable.

Family and Domestic Agreements

Balfour v Balfour (CA 1919)

Facts

• The plaintiff agreed to give money to his wife to support herself while he was working abroad, which he failed to do.

• She sued him for breach of contract.

Issue

• Intent to create legal relations – Status...