Maart 2013: jaargang 10, nommer 1 - LitNet

LitNet Akademies Jaargang 10 (1), Maart 2013
(i) A proposes to enter into a contract with B under which he agrees to hire a car
from B. The contract documentation provides that the minimum period of hire is
to be twelve months. Just before signing the relevant document A says to B, “I
take it that I can terminate this contract at any time on giving seven days’ notice.”
B replies, “Certainly, you may.” After three months A gives B a week’s notice of
termination and returns the car. B claims that the contract has another nine
months to run and claims damages from A. The court should give judgment in
A’s favour. Either there was a single contract made partly orally and partly in
writing, the oral part overriding any inconsistent part of the writing, or the parties
made an oral contract collateral to, and overriding, the written one. The parties’
expressed intention, as understood by the conversation, was that the contract
could be terminated on a week’s notice. Evidence of the conversation would not
be excluded by any parol evidence rule.
(ii) On 1 July 1985 A makes B a present of a cheque in B’s favour for £1,000
dated 31 December 1985. B endorses the cheque in favour of C. On 1 November
1985 C presents the cheque to A’s bank and, when it is unpaid, immediately
issues a writ for £1,000 against A, claiming as endorsee of that cheque. C alleges
that at the time A drew the cheque he orally agreed with B that although the
cheque was dated 31 December, it could be presented and would be honoured on
or after 1 November. Evidence of the conversation between A and B should not
be admitted. It will, however, not be excluded because of the parol evidence rule
but because under section 3 of the Bills of Exchange Act 1882 cheques must be in
writing. C cannot sue on the cheque and rely upon evidence of oral terms.
(iii) A agrees “subject to contract” to sell his house to B for £50,000. Contracts
are drawn up stating this price and are returned, signed, to the respective
solicitors ready for exchange. Before exchange takes place, B complains to A that
the price is too high and A agrees to reduce it by £5,000. Thinking that if they tell
their solicitors of this reduction the legal fees will be increased, A and B agree to
say nothing to the solicitors but confirm the reduction by exchange of letters. In
due course, the solicitors exchange the contracts showing the price as £50,000. A
then seeks to maintain that the price to be paid is £50,000, relying on B’s signed
contract. He seeks to exclude evidence of the reduction by relying on the parol
evidence rule. However, the court should admit this evidence and give effect to
the agreed reduction. The clear intention of the parties was that the price would
be £45,000, not £50,000. The situation may be analysed either as a single contract
contained in two documents, one of which was inaccurate because inconsistent
with the true agreement as reflected in the other, which was intended to prevail,
or the parties entered into two contracts, the one collateral to the other but taking
effect so as to override it because constituting the true intention of the parties. 242
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