Tort

TORT

A negligent or intentional civil wrong not arising out of a contract or statute. These include "intentional torts" such as battery or defamation, and torts for negligence.

A tort is an act that injures someone in some way, and for which the injured person may sue the wrongdoer for damages. Legally, torts are called civil wrongs, as opposed to criminal ones. (Some acts like battery, however, may be both torts and crimes; the wrongdoer may face both civil and criminal penalties.)

Under traditional law, family members were prohibited from suing each other for torts. The justification was that allowing family members to sue each other would lead to a breakdown of the family. Today, however, many states recognize that if family members have committed torts against each other, there often already is a breakdown in family relationships. Thus, they no longer bar members from suing each other. In these states, spouses may sue each other either during the marriage or after they have separated

DEFAMATION

DEFAMATION

Defamation is a complex and detailed tort.

DEFINITION

A defamatory statement is one which injures the reputation of another by exposing him to hatred, contempt, or ridicule, or which tends to lower him in the esteem of right-thinking members of society.

WHAT HAS TO BE PROVED

Subject to the differences between the two types of defamation, libel and slander (explained below), the claimant must prove:

(1) that the statement was defamatory,
(2) that it referred to him, and
(3) that it was published, ie communicated, to a third party.

The onus will then shift to the defendant to prove any of the following three defences:

(1) truth (or justification),
(2) fair comment on a matter of public interest, or
(3) that it was made on a privileged occasion.

In addition, some writers put forward the following as defences in their own right:

(4) unintentional defamation, and
(5) consent.

DISTINCTION BETWEEN LIBEL AND SLANDER

The basic differences between the torts of libel and slander are as follows:

(1) Libel is a defamatory statement in permanent form, for example,

· writing,
· wax images (Monson v Tussaud's Ltd [1894] 1 QB 671),
· films (Youssoupoff v MGM Pictures Ltd (1934) 50 TLR 581),
· radio and television broadcasts (s16 Defamation Act 1952; ss166 and 201 Broadcasting Act 1990), and
· public performances of plays (s4 Theatres Act 1968).

Slander is a defamatory statement in a transient form.

(2) Libel is actionable per se whereas damage must be proved for slander, except in four instances:

· Where there is an allegation that the claimant has committed an imprisonable offence;
· Where there is an imputation that the claimant is suffering from a contagious disease, such as venereal disease, leprosy, plague and, arguably, HIV/AIDS;
· Where there is an imputation that a woman has committed adultery or otherwise behaved in an 'unchaste' fashion (Slander of Women Act 1891); or
· Where there is an imputation that the claimant is unfit to carry on his trade, profession or calling.

(3) Libel may be prosecuted as a crime as well as a tort, whereas slander is only a tort.

FUNCTION OF JUDGE AND JURY

All actions for defamation must be commenced in the High Court, and it is one of the few civil actions that are still tried with juries. The Civil Procedure Rules have not removed this right:

Safeway plc v Tate [2001] The Times LR 25 January

It is the function of the judge to decide if the words were capable of being defamatory in the eyes of a reasonable person: (a) If the judge rules that no reasonable person would actually conclude that the words in question were defamatory, the case will fail at that point; (b) If the judge rules that the words are capable of being defamatory in the eyes of a reasonable person, the words will be put to the jury and the judge will ask them to decide whether the words were defamatory (Capital and Counties Bank v Henty (1882) 7 App Cas 741 and Lewis v Daily Telegraph [1964] AC 234). A recent case on this issue is:

Alexander v Arts Council of Wales [2001] The Times LR 9 April

Note that by s7 of the Defamation Act 1996, the court shall not be asked to rule whether a statement is arguably capable, as opposed to capable, of bearing a particular meaning or meanings attributed to it.

Juries also decide the amount of damages to be awarded to the claimant. It is well established that jury awards for defamation are excessive, especially when compared to judicial awards for personal injuries. The Court of Appeal now has the power to substitute an award of damages instead of ordering a new trial in cases where the damages awarded by a jury are excessive or inadequate (s8 Courts and Legal Services Act 1990).

Cases to look up on the award of damages include: Clark v CC of Cleveland Constabulary [1999] The Times LR 13 May.


ESSENTIALS OF DEFAMATION

(1) WORDS MUST BE DEFAMATORY

The statement must be defamatory. According to Lord Atkin, the statement must tend to lower the claimant in the estimation of right-thinking members of society generally, and in particular cause him to be regarded with feelings of hatred, contempt, ridicule, fear and disesteem.

Mere abuse

Vulgar abuse is not defamatory. Mansfield CJ stated "For mere general abuse spoken no action lies" (Thorley v Kerry (1812) 4 Taunt 355 at 365, and also Pollock CB and Wilde B in Parkins v Scott (1862) 1 H&C 153 at 158, 159).

Winfield & Jolowicz (p406) states that spoken words which are prima facie defamatory are not actionable if it is clear that they were uttered merely as general vituperation and were so understood by those who heard them. Further, the same applies to words spoken in jest (Donoghue v Hayes (1831) Hayes R 265).

Innuendo

Sometimes a statement may not be defamatory on the face of it but contain an innuendo, which has a defamatory meaning. Such a statement may be actionable. The hidden meaning must be one that could be understood from the words themselves by people who knew the claimant (Lewis v Daily Telegraph [1964] AC 234) and must be specifically pleaded by the claimant.

(2) REFERENCE TO THE CLAIMANT

The statement must refer to the claimant, ie, identify him or her, either directly or indirectly.

Defamation of a class

If a class of people is defamed, there will only be an action available to individual members of that class if they are identifiable as individuals. "If a man wrote that all lawyers were thieves, no particular lawyer could sue him unless there was something to point to the particular individual" (per Willes J in Eastwood v Holmes (1858) 1 F&F 347 at 349).

If the defendant made a reference to a limited group of people, eg the tenants of a particular building, all will generally be able to sue (Browne v DC Thomson (1912) SC 359.

This issue was considered by the House of Lords in Knupffer v London Express Newspaper Ltd [1944] AC 116.

Unintentional defamation

At common law it was irrelevant that the defendant did not intend to refer to the claimant. Section 4 of the Defamation Act 1952 provided a special statutory defence in cases of 'unintentional defamation', by allowing the defamer to make an 'offer of amends' by way of a suitable correction and apology and may include an agreement to pay compensation and costs. The defence is now contained in ss2-4 of the Defamation Act 1996, which was an attempt to modernise the law. The person accepting the offer may not bring or continue defamation proceedings. If the offer to make amends fails, the fact that the offer was made is a defence and may also be relied on in mitigation of damages.

A publication made 'malicously' (spitefully, or with ill-will or recklessness as to whether it was true or false) will destroy the defence of unintentional defamation.

(3) PUBLICATION

The statement must be published, ie communicated, to a person other than the claimant.

For example, dictating a defamatory letter to a typist is probably slander (Salmond and Heuston on the Law of Torts, 1996, p154), but when the letter is published to a third party it is libel. However, in Bryanston Finance v De Vries [1975] QB 703 it was held that where a letter was written to protect the interests of the business there was a common interest between the employer and employee, and so a letter dictated to a secretary in the normal course of business was protected by qualified privilege.

Communication between husband and wife

A statement made to one's own spouse will not be 'published' for the purposes of defamation (Wennhak v Morgan (1888) 20 QBD 635 at 639). Communication between husband and wife is protected as any other rule "might lead to disastrous results to social life".

Distributors

The defence sometimes known as 'innocent dissemination' is designed to protect booksellers and distributors of materials which may contain libellous statements. The law is now contained in s1 of the Defamation Act 1996.

A person has a defence if he shows that he was not the author, editor or commercial publisher of the statement; he took reasonable care in relation to its publication; and he did not know, and had no reason to believe, that what he did caused or contributed to the publication of a defamatory statement (s1(1)). A person shall not be considered the author, editor or publisher of a statement if he is only the printer, producer, distributor, or seller of printed material containing the statement, or the broadcaster of a live programme (s1(3)).

An internet service provider was held not to be the publisher, within the meaning of s1, of defamatory statements posted on a newsgroup, and therefore was entitled to rely on s1(1)(a). However, on the facts the claimant had notified the defendants that the posting was defamatory and requested that they remove it, but they had refused to do so.

Consent

Consent of the claimant to the publication of a statement, by showing other people defamatory material which the defendant meant for the claimant only, will create a situation in which technically there has been no publication (Hinderer v Cole (1977) (unreported) - defamatory letter sent by the defendant to the claimant was shown by the claimant himself to third parties).

For further information look up Chapman v Lord Ellesmere [1932] 2 KB 431; Tadd v Eastwood [1985] ICR 132.


DEFENCES

(1) TRUTH (OR JUSTIFICATION)

Only false statements are actionable, so if the statement made about the claimant is true, there can be no action for defamation. The burden of proof is on the defendant to prove that the statement made is true, rather than on the claimant to prove that it was false.

If a number of imputations are made by the defendant but only one action is brought by the claimant in respect of them, then, by virtue of s5 of the Defamation Act 1952, a defence of justification shall not fail by reason only that the truth of every charge is not proved if the words not proved to be true do not materially injure the claimant's reputation, having regard to the truth of the remaining charges.

The Rehabilitation of Offenders Act 1974 provides that certain criminal convictions, depending upon their seriousness, are to become 'spent' after certain periods of time have elapsed, and treated as if they had never happened. Section 8 provides that in defamation actions which are based on allegations that the claimant has committed offences which would otherwise be 'spent', justification can be used as a defence except where the publication was made with malice (ie, spitefully, or with ill-will or recklessness as to whether it was true or false).

(2) FAIR COMMENT ON A MATTER OF PUBLIC INTEREST

The defence of fair comment is frequently relied upon by the press, as it is designed to protect statements of opinion on matters of public concern. Lord Esher, in Merivale v Carson (1887) 20 QBD 275, stated that the test was:

"Would any fair man, however prejudiced he may be, however exaggerated or obstinate his views, have said that which this criticism has said of the work which is criticised?"

The defence only applies to comments made on matters of public interest, eg comments on works of literature, music, art, plays, radio and television; and also the activities of public figures.

A publication made 'malicously' (spitefully, or with ill-will or recklessness as to whether it was true or false) will destroy the defence of fair comment.

Where there are imputations partly based on fact and partly expressions of opinion, the defence of fair comment will not fail merely because the truth of every allegation of fact is not proved if the expression of opinion is fair comment having regard to such of the facts alleged or referred to in the words complained of as are proved (s6 of the Defamation Act 1952).

(3) PRIVILEGE

(a) Absolute

There are certain occasions on which the law regards freedom of speech as essential, and provides a defence of absolute privilege which can never be defeated, no matter how false or malicious the statements may be. The following communications are 'absolutely privileged' and protected from defamation proceedings:

· Statements made in either House of Parliament. However, by s13 of the Defamation Act 1996, this privilege can be waived.

· Parliamentary papers of an official nature, ie, papers, reports and proceedings which Parliament orders to be published (s1 of the Parliamentary Papers Act 1840). Extracts from parliamentary papers are covered by qualified privilege (s3).

· Statements made in the course of judicial proceedings or quasi-judicial proceedings.

· Fair, accurate and contemporaneous reports of public judicial proceedings before any court in the UK (s3 of the Law of Libel Amendment Act 1888). The same privilege was extended to radio and television broadcasts of judicial proceedings in similar circumstances by s9(2) of the Defamation Act 1952.

· Communications between lawyers and their clients.

· Statements made by officers of state to one another in the course of their official duty (Chatterton v Secretary of State for India [1895] 2 QB 189).

(b) Qualified

Qualified privilege operates only to protect statements which are made without malice (ie, spitefully, or with ill-will or recklessness as to whether it was true or false).

The judge must decide whether the situation is covered by qualified privilege. If so the jury must then decide whether the defendant acted in good faith or whether there was malice.

The following communications will be protected by 'qualified privilege':

· Statements made in pursuance of a legal, moral or social duty, but only if the party making the statement had an interest in communicating it and the recipient had an interest in receiving it.

· Statements made in protection of an interest, eg public interests or the defendant's own interests in property, business or reputation.

· Fair and accurate reports of parliamentary proceedings.

· Fair and accurate reports of public judicial proceedings in the UK, eg when the report is not published contemporaneously with the proceedings.

· Statements privileged by s15 of the Defamation Act 1996, which applies to statements made in newspapers and radio and television broadcasts. There are two categories:

(i) Statements having qualified privileged without explanation or contradiction: see Part I of Schedule 1 to the Act.

(ii) Statements having qualified privilege subject to explanation or contradiction: see Part II of Schedule 1 to the Act.

This defence was recently tested in:

Loutchansky v Times Newspapers (QBD, 27 April 2001).

REMAND AND INVESTIGATIONS

Section 117 of the Criminal Procedure Code is the mechanism which allows the detention of a suspect for more than 24 hours to enable the police to complete their investigation. Under the new Section 117(2), where investigations cannot be completed within 24 hours from the time of the person’s arrest, the arrested person shall be produced before a Magistrates who shall then authorize the person to be remanded for a period not exceeding 7 days if the offence investigated is punishable with imprisonment with less than 14 years and not exceeding 14 days if the offence investigated is punishable with death or imprisonment of 14 years or more.

Before its amendment, Section 117 had been opened to abuse. First, there is what is known as the practice of obtaining a ‘chain smoking’ remand order from a Magistrate. This is where a person who is arrested for the purposes of an investigation into an offence committed in the jurisdiction of a Magistrate Court, is taken, after a remand order is obtained, to another Magistrate Court outside jurisdiction to obtain a further demand order on the basis of investigating some other purported offence. Through this practice, the provisions of the previous Section 117(2) of the Criminal Code Procedure were circumvented and a total remand period could well exceed the 15 days.

This practice has led to an arrested person being subjected to physical and mental torture and there were instances of arrested persons dying in custody during the remand period. The power to grant a remand period of 15 days in total has also led to a tendency on the part of police to “arrest first and investigate later”.

Therefore, to put this in check a new subsection (2) was introduced to replace the previous subsection (2) of Section 117 together with the introduction of subsections (3), (4), (5), (6) and (7).

The most fundamental significance of the amendments to the Criminal Procedure Code, is the right of an arrested person to be represented by Counsel during remand proceedings and that an arrested person is not subjected to lengthy remand periods.

The new subsection (2) to section 117 is divided into two distinct stages. First, if the offence which is being investigated is punishable with imprisonment for less than 14 years, the detention shall not be more than 4 days on the first application and shall not be more than 3 days on the second application. However, where the offence being investigated is punishable with death or imprisonment of 14 years or more, the detention shall not be more than 7 days on the first application and shall not be more than 7 days on the second application.

Section 117 is now reproduced:

Section 117(1)

Whenever any person is arrested and detained in custody and it appears that the investigation cannot be completed within the period of twenty-four hours fixed by section 28 and there are grounds for believing that the accusation or information is well founded the police making the investigation shall immediately transmit to a Magistrate a copy of the entries in the diary hereinafter prescribed relating to the case and shall at the same time produce the accused before the Magistrate.

Section 117(2)

117(2) The Magistrate before whom an accused person is produced under this section may, whether he has or has not jurisdiction to try the case, authorize the detention of the accused in such custody as follows: -

(a) If the offence which is being investigated is punishable with imprisonment of less than fourteen years, the detention shall not be more than four days on the first application and shall not be more than three days on the second application;

(b) If the offence which is being investigated is punishable with imprisonment of less than fourteen years, the detention shall not be more than four days on the first application and shall not be more than seven days on the second application.

(c) The officer making the investigation shall state in the copy of the entries in the diary referred to in subsection (1), any period of detention of the accused immediately prior to the application, whether or not such detention relates to the application.

(d) The Magistrate, in deciding the period of detention of the accused person, shall take into consideration any detention period immediately prior to the application, whether or not such detention relates to the application.

(e) The Magistrate in deciding the period of detention of the accused shall allow representations to be made either by the accused himself of through a counsel of his choice.

(f) If the Magistrate has no jurisdiction to try the case and considers further detention unnecessary he may order the accused person to be produced before a Magistrate having such jurisdiction or, if the case is triable only by the High Court, before himself or another Magistrate having jurisdiction with a view to transmission for trial by the High Court.

(g) A Magistrate authorizing under his section detention in the custody of the police shall record his reasons for so doing.

(h) Commentary:- With this new subsection on the period of detention, it is hoped that it would rid the police of “arrest first and investigate later”. The period of detention provided for under the new subsection is reasonable in the circumstances, since offences punishable by death or imprisonment of 14 years or more are much more complex in nature, thus, requiring for the purpose of investigation and the collection of evidence as compared to an offence punishable by imprisonment of less than 14 years.

The application for remand which is divided into two stages of application makes it much more controlled.

The most fundamental aspect to S.117 in its current form is the arrestee’s right to be represented by counsel during the remand proceedings and that the period of detention is controlled. This would ensure that a person arrested is not remanded save on strong and reasonable grounds.

The new subsection (3) and (4) of the amended S117 makes it imperative for the police officer seeking the remand order from the Magistrate to inform the Magistrate any period of detention made prior to the application whether such detention relates to the application, and it is compulsory for the Magistrate to take into account such period detention in allowing the said application.

(a) How person arrested is to be dealt with and detention for more than twenty-four hours.

Section 28 of the Criminal Procedure Code provides: -

(1) A police officer making an arrest without a warrant shall without unnecessary delay and subject to the provisions herein as to bail or previous release take or send the person arrested before a Magistrate’s Court.

(2) No police officer shall detain in custody a person arrested without a warrant for a longer period than under all the circumstances of the case is reasonable.

(3) Such period shall not in the absence or after the expiry of a special order of a Magistrate under section 117 exceed twenty-four hours exclusive of the time necessary for the journey from the place of arrest to the Magistrate’s Court.

(4) Commentary:- Before the new section 28A a person arrested under this section is almost always not informed of the grounds in which he is arrested not afforded the right to counsel. Further, an arrested person is also deprived from communicating with his family or friends with regards to his detention.

(5) This has resulted in his family and/or counsel being unaware as to when the person arrested would be produced in court for remand or be charged. This has led to arrested persons being remanded and/or charged in the absence of his counsel and/or family.

(b) Rights of Person Arrested

Section 28A provides: -

(1) A person arrested without a warrant, shall be informed as soon as may be of the grounds of his arrest by the police officer making the arrest.

(2) A police officer shall, before commencing any form of questioning or recording of any statement from the person arrested, inform the person that he may –

(a) communicate or attempt to communicate, with a relative or friend to inform of his whereabouts; and

(b) communicate or attempt to communicate and consult with a legal practitioner of his choice.

(3) Where the person arrested wishes to communicate or attempt to communicate with the persons referred to in paragraphs 2(a) and (b), the police officer shall, as soon as may be, allow the arrested person to do so.

(4) Where the person arrested has requested for a legal practitioner to be consulted the police officer shall allow a reasonable time-

(a) for the legal practitioner to be present to meet the person arrested at his place of detention; and

(b) for the consultation to take place.

(5) The consultation under subsection (4) shall be within the sight of a police officer and in circumstances, in so far as practicable, where their communication will not be over heard.

(6) The police officer shall defer any questioning or recording of any statement from the person arrested for a reasonable time until the communication or attempted communication under paragraph 2(b) of the consultation under paragraph (4) has been made;

(7) The police officer shall provide reasonable facilities for the communication and consultation under this section and all such facilities provided shall be free of charge.

(8) The requirements under subsections (2), (3), (4), (5), (6) and (7) shall not apply where the police officer reasonably believes that-

(a) compliance with any of the requirements is likely to result in-

(I) an accomplice of the person arrested taking steps to avoid apprehension; or

(II) the concealment, fabrication or destruction of evidence or the intimidation of a witness; or

(b) having regard to the safety of other persons the questioning or recording of any statement is so urgent that it should be not delayed.

(9) Subsection (8) shall only apply upon authorization by a police officer not below the rank of Deputy Superitendent of Police.

(10) The police officer giving the authorization under subsection (9) shall record the grounds of belief of the police officer that the conditions specified under subsection (8) will arise and such record shall be made as soon as practicable.

(11) The Investigating officer shall comply with the requirements under subsections (2), (3), (4), (5), (6) and (7), as soon as possible after conditions specified under subsection (8) have ceased to apply where the person arrested is still under detention under this section or under section 117.

Commentary:- This new section 28A, clearly spells out the rights of an arrested person, thus, making it compulsory for the police to comply with the same. Under this new section, not only must a person arrested be informed of the grounds for his arrest, but he is also afforded the right to contact a legal practitioner of his choice within 24 hours from the time of his arrest.

Besides this, under this new section, an arrested person shall also be allowed to communicate with a relative or friend of his with regards to his whereabouts within 24 hours from the time of his arrest. The new section 28A also provides that an arrested person shall be given the right to counsel before the police commences any form of questioning or recording of any statement from the person arrested, subject to the exceptions laid down in Section 28(8).

The new section 28A reflects the rights of an arrested person as enshrined under Article 5 of the Federal Constitution. With clearly spelt out rights under this new section, it is hoped that the police would comply strictly with the same.

ARREST note

Under Section 15(1) of the Criminal Procedure Code (“CPC), an arrest may be made in the following manner: -

(a) by actually touching the body of the person to be arrested; or

(b) by actually confining the body of the person to be arrested; or

(c) where there is submission to custody by word or action.

Apart from the mode of arrest prescribed by Section 15(1), in Malaysia there also exists what is known as common law arrest. This is where a police officer states in terms that he is arresting or when he uses force to refrain the individual concerned or when he makes it clear that he will, if necessary, use force to prevent the individual from going where he may want to go.

When arrested, a person has a fundamental right under the Federal Constitution to be informed as soon as possible in ordinary language, of the grounds of his arrest unless that can be inferred from the surrounding circumstances or if he makes it impossible for the person making the arrest to inform him. Thus, a person arrested is entitled to ask the reasons for his arrest as well as to which police station he is being taken to. The police must bring a person arrested immediately to the nearest police station and nowhere else.

The Federal Constitution also gives the arrested person a right to consult and he defended by a legal practitioner of his choice. A person arrested has the right to remain silent and refuse to answer any questions.

A police officer who has taken a person into custody must produce him before a Magistrate without necessary delay. Police detention of the arrested person must not exceed 24 hours (excluding the time taken for the journey from the place of arrest to the Magistrate Court).

Under the new Section 28A of the Criminal Procedure Code which came into force since September 2007 the rights of an arrested person are clearly spelt out.

Under this new section, an arrested person will have the following rights: -

• to be informed as soon as may be the grounds for this arrest;

• right to contact a legal practitioner of his choice within 24 hours from the time of his arrest;

• right to communicate with a relative or friend of his with regards to his whereabouts within 24 hours from the time of his arrest;

• right to consult with his lawyer and the lawyer is allowed to be present and to meet the arrested person at the place of detention before the police commences any form of questioning or recording of any statement from the person arrested.

However, the right to communicate with a relative, counsel or friend and the right to consult a counsel of his choice will be refused where there is reasonable belief that to do so could result in an accomplice of the person arrested taking steps to avoid apprehension or there would be destruction, concealment or fabrication of evidence or intimidation of witnesses or where taking regard to the safety of other persons, the questioning or recording of any statement should not be delayed.

Term of contract

A promise which is not a term of the principal contract, could possibly be enforced as a collateral contract. Collateral means "by the side of". This was an important innovation used to evade:

a. the parol evidence rule (e.g., City & Westminster Properties v Mudd [1959] Ch 129);
b. the formerly limited remedies for misrepresentation (e.g., Esso Petroleum v Mardon [1976] QB 801); and
c. privity of contract (e.g. Shanklin Pier v Detel Products [1951] 2 KB 854).

The concept of a collateral contract was clearly illustrated by Lord Moulton in Heilbut, Symons & Co v Buckleton [1913] AC 30:
'It is evident, both on principle and on authority, that there may be a contract the consideration for which is the making of some other contract. "If you will make such and such a contract, I will give you one hundred pounds," is in every sense of the word a complete legal contract. It is collateral to the main contract, but each has an independent existence, and they do not differ in respect of their possessing to the full the character and status of a contract.'
In Evans v Andrea Merzario [1976] 1 WLR 1078, Lord Denning MR, while explaining the use for a collateral contract after the Misrepresentation Act 1967 (which does not apply in respect of promises as to the future), stated:
'When a person gives a promise or an assurance to another, intending that he should act on it by entering into a contract, and he does act on it by entering into the contract, we hold that it is binding …
… The cases are numerous in which oral promises have been held binding in spite of written exempting conditions.'

TERMS OF THE CONTRACT
1. THE PAROL EVIDENCE RULE
The parol evidence rule is that where the record of a transaction is embodied in a document, extrinsic evidence is not generally admissible to vary or interpret the document or as a substitute for it.
According to GH Treitel, The Law of Contract, 9th ed. p176, there are obvious grounds of convenience for the application of the parol evidence rule to contracts: certainty is promoted by holding that parties who have reduced a contract to writing should be bound by the writing and by the writing alone. On the other hand, the parol evidence rule will commonly be invoked where a dispute arises after the time of contracting as to what was actually said at that time; and in such cases one of the parties could feel aggrieved if evidence on the point were excluded merely because the disputed term was not set out in the contractual document. Evidence extrinsic to the document is therefore admitted in a number of situations which fall outside the scope of the rule.
EXCEPTIONS TO THE PAROL EVIDENCE RULE:
(A) WRITTEN AGREEMENT NOT THE WHOLE AGREEMENT
If the written agreement was not intended to be the whole contract on which the parties had actually agreed, parol evidence is admissible. See:
Evans v Andrea Merzario [1976] 2 All ER 930
The plaintiffs, who had shipped goods for many years with the defendants, who were forwarding agents, agreed to a changeover in the method of shipment to enable goods to be carried in containers stored below deck on the ship. The defendants gave an oral assurance that the goods would be carried below deck on the ship. In fact, goods were carried above deck and the containers were washed overboard in a storm. The printed standard conditions of the forwarding trade enabled the defendants to carry containers above deck if they wished to do so.
It was held that there was a breach of contract and that the defendants could not rely on the written agreement. Lord Denning MR said that the promise to carry goods below deck was an enforceable collateral contract. Roskill and Geoffrey Lane LJJ also thought that the oral assurance was an express term of the contract of carriage, which was partly oral, partly in writing and partly by conduct.
(B) VALIDITY
Parol evidence may be given about the validity of the contract, eg to establish the presence or absence of consideration or of contractual intention, or some invalidating cause such as incapacity, misrepresentation, mistake or non est factum.
(C) IMPLIED TERMS
Where the contract is silent on a matter on which a term is normally implied by law, parol evidence may be given to support, or to rebut, the usual implication. See:
Burgess v Wickham (1836) B&S 669
It was held that a person who takes out a policy of marine insurance can show that the insurer knew the ship to be unseaworthy, and so negative the usual implied warranty of seaworthiness.
(D) OPERATION OF THE CONTRACT
Parol evidence can be used to show that the contract does not yet operate, or that it has ceased to operate. See:
Pym v Campbell (1856) 6 E&B 370
A written agreement for the sale of a patent was drawn up, and evidence was admitted of an oral stipulation that the agreement should not become operative until a third party had approved of the invention.


(E) EVIDENCE AS TO PARTIES
Parol evidence can be used to show in what capacities the parties contracted, eg where a person contracts ostensibly as principal, evidence is admissible to prove that he really acted as another's agent so as to entitle the latter to sue (Humfrey v Dale (1857) 7 E & B 266).
(F) AID TO CONSTRUCTION
Where the words of the contract are clear, parol evidence cannot be used to explain their meaning, unless they have a special meaning by custom. Parol evidence can, on the other hand, be used to explain words or phrases which are ambiguous, or which, if taken literally, make no sense, as well as technical terms.
(G) TO PROVE CUSTOM
Evidence of custom is admissible "to annex incidents to written contracts in matters with respect to which they are silent." (Hutton v Warren (1836). Custom can also be used as an aid to construction, eg in Smith v Wilson (1832) evidence was admitted of a local custom to show that "1,000 rabbits" meant "1,200 rabbits."
(H) RECTIFICATION
A document may fail in accurately recording the true agreement. Equity allows such a written contract to be rectified by parol evidence. (See handout on Mistake)
(I) COLLATERAL CONTRACT
Even though parol evidence cannot be used to vary or add to the terms of a written contract, it may be possible to show that the parties made two related contracts, one written and the other oral, ie a collateral contract. See:
City & Westminster Properties v Mudd [1959] Ch 129
The defendant, who had been a tenant of the premises for six years, had resided at the shop. When the lease fell for renewal, the plaintiffs inserted a clause for use of the premises to be for business purposes only. The defendant asked if he could sleep there, was told that he could and he signed the lease. Even though this assurance contradicted the lease, evidence of it was held admissible to prove a collateral contract which the tenant could plead in answer to a claim for breach of contract.

The Law Commission (1976) recommended that the rule should be abolished, but by 1986 concluded that it did not stop the courts accepting parol evidence if this was consistent with the intention of the parties.
2a. REPRESENTATIONS AND TERMS
The first step in determining the terms of a contract is to establish what the parties said or wrote. Statements made during the course of negotiations may traditionally be classed as representations or terms and if one turns out to be wrong, the plaintiff's remedy will depend on how the statement is classified:
• A representation is a statement of fact made by one party which induces the other to enter into the contract. If it turns out to be incorrect the innocent party may sue for misrepresentation.
• Breach of a term of the contract entitles the injured party to claim damages and, if he has been deprived substantially what he bargained for, he will also be able to repudiate the contract.
• If a statement is not a term of the principal contract, it is possible that it may be enforced as a collateral contract (which has developed rapidly in the twentieth century as a significant means by which the difficulties of fixing a statement with contractual force may be circumvented).
How can the courts decide whether a statement is a term or a mere representation? It was established in Heilbut, Symons & Co v Buckleton [1913] AC 30, that intention is the overall guide as to whether a statement is a term of the contract. In seeking to implement the parties' intentions and decide whether a statement is a term or a mere representation, the courts will consider the following four factors:
(A) TIMING
The court will consider the lapse of time between the making of the statement and the contract's conclusion: if the interval is short the statement is more likely to be a term. See:
Routledge v McKay [1954] 1 WLR 615
The defendant stated that a motor cycle, the subject matter of the proposed sale, was a 1942 model. In the written contract, signed a week later, no mention was made of the date of the model. The lapse of a week between the two events weighed with the court as a factor militating against construing the statement as a contractual term. (See further below)

Schawel v Reade [1913] 2 IR 64
The defendant told the plaintiff, who required a horse for stud purposes, that the animal was 'perfectly sound'. A few days later the price was agreed and, three weeks later, the plaintiff bought the horse. The statement was held to be a term of the contract, but here the defendant, who was the owner of the horse, would appear to have had special knowledge.


(B) IMPORTANCE OF THE STATEMENT
The court will consider the importance of the truth of the statement as a pivotal factor in finalising the contract. The statement may be of such importance that if it had not been made the injured party would not have entered into the contract at all. See:
Bannerman v White (1861) CB(NS) 844
The buyer of hops asked whether sulphur had been used in their cultivation. He added that if it had he would not even bother to ask the price. The seller assured him that it had not. This assurance was held to be a condition of the contract. It was of such importance that, without it, the buyer would not have contracted.

Couchman v Hill [1947] 1 All ER 103
The buyer asked for the assurance that the heifer he was contemplating purchasing at an auction sale was unserved, as he required it for servicing by his own bull. He also stated that without this assurance, he would not bid. Both the seller and auctioneer gave him this assurance. The heifer turned out to have been served.
The Court of Appeal held that the assurance was a term of the contract, despite the fact that this was in conflict with the printed conditions to which the auction sale was subject, which provided that no warranty was given. In the alternative, the Court of Appeal found that the statement was a collateral contract.


(C) REDUCTION OF TERMS TO WRITING
The court will consider whether the statement was omitted in a later, formal contract in writing. If the written contract does not incorporate the statement, this would suggest that the parties did not intend the statement to be a contractual term. See:
Routledge v McKay [1954]
In the written contract, signed a week later, no mention was made of the date of the model. It was held, on this point, that what the parties intended to agree on was recorded in the written agreement, and that it would be inconsistent with the written agreement to hold that there was an intention to make the prior statement a contractual term.

Birch v Paramount Estates (1956) 167 EG 196
The defendants made a statement about the quality of a house. The contract, when reduced to writing, made no reference to the statement. The Court of Appeal regarded the statement as a contractual term. But here the defendants had special knowledge.
(D) SPECIAL KNOWLEDGE/SKILLS
The court will consider whether the maker of the statement had specialist knowledge or was in a better position than the other party to verify the statement's accuracy. See:
Harling v Eddy [1951] 2 KB 739
The vendors of a heifer represented that there was nothing wrong with the animal but, in fact, it had tuberculosis from which it died within three months of the sale. A contributory factor leading the Court of Appeal to decide that the statement was a term of the contract was that the vendors were in a special position to know of the heifer's condition.

Oscar Chess v Williams [1957] 1 All ER 325
A private seller of a car obtained £290 in part exchange on the basis that it was a 1948 model. It was in fact, a 1939 model. The registration book had been fraudulently altered by a previous owner, but the seller was innocent of this. The price of a 1939 model was considerably lower. The plaintiff motor dealer would still have been prepared to buy the car, but at a lower price had they known the true facts.
The Court of Appeal held, by a majority, that the statement was not a term of the contract. The main reason for this decision was that the seller had no special knowledge as to the age of the car, while the buyers were car dealers, and so in at least as good a position as the seller to know whether the statement was true.

Dick Bentley Productions v Harold Smith Motors [1965] 2 All ER 65
A statement was made by a motor dealer to a private purchaser that the car had done only 20,000 miles since being fitted with a replacement engine and gearbox. The car had actually done nearly 100,000 miles since then. The Court of Appeal unanimously held that the statement was a contractual term (a warranty). Lord Denning MR distinguished Oscar Chess v Williams and said that the car dealer was clearly in a better position than the buyer to know whether the representation was true.
2b. CONDITIONS AND WARRANTIES
Traditionally terms have been divided into two categories: conditions and warranties.
(A) CONDITIONS
A condition is a major term which is vital to the main purpose of the contract. A breach of condition will entitle the injured party to repudiate the contract and claim damages. The injured party may also choose to go on with the contract, despite the breach, and recover damages instead. See:
Poussard v Spiers (1876) 1 QBD 410
Poussard was engaged to appear in an operetta from the start of its London run for three months. The plaintiff fell ill and the producers were forced to engage a substitute. A week later Poussard recovered and offered to take her place, but the defendants refused to take her back.
The court held that the defendant's refusal was justified and that they were not liable in damages. What chiefly influenced the court was that Poussard's illness was a serious one of uncertain duration and the defendants could not put off the opening night until she recovered. The obligation to perform from the first night was a condition of the contract. Failure to carry out this term entitled the producers to repudiate Poussard's contract.

(Note: The word 'condition' also has another meaning. It may mean a stipulation that a contract should not be enforceable except on the happening of a given event, or should be brought to an end on the happening of a given event. The condition is then properly called a 'condition precedent', or a 'condition subsequent' respectively. See Cheshire & Fifoot, p153-4).

(B) WARRANTIES
A warranty is a less important term: it does not go to the root of the contract. A breach of warranty will only give the injured party the right to claim damages; he cannot repudiate the contract. See:
Bettini v Gye (1876) 1 QBD 183
Bettini, an opera singer, was engaged by Gye to appear in a season of concerts. He undertook to be in London at least six days before the first concert for the purpose of rehearsals. He arrived three days late because of a temporary illness. He gave no advance notice and Gye refused to accept his services.
It was held that the plaintiff had been engaged to perform for a 15-week season and the failure to attend rehearsals could only affect a small part of this period. The promise to appear for rehearsals was a less important term of the contract. The defendant could claim compensation for a breach of warranty but he could not repudiate Bettini's contract.

(C) INTERMEDIATE TERMS
It may be impossible to classify a term neatly in advance as either a condition or a warranty. Some undertakings may occupy an intermediate position, in that the term can be assessed only in the light of the consequences of a breach. If a breach of the term results in severe loss and damage, the injured party will be entitled to repudiate the contract; where the breach involves minor loss, the injured party's remedies will be restricted to damages. These intermediate terms have also become known as innominate terms. See:
Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha [1962] 1 All ER 474
Hong Kong Fir Shipping [1962] 1 All ER 474

The defendants chartered a vessel from the plaintiffs for 24 months, "she being fitted in every way for ordinary cargo service." The engine room staff turned out to be inefficient and the engines were old with the result that she was held up for repairs for five weeks mid-voyage. It was then found that further repairs, requiring 15 weeks to complete, were necessary to make her seaworthy. Although the charter party still had 20 months to run, the defendants repudiated the contract and claimed that the term as to seaworthiness was a condition of the contract, any breach of which entitled them to do so. The plaintiffs claimed damages for wrongful repudiation.
The Court of Appeal decided the term was neither a condition nor a warranty, and in determining whether the defendants could terminate the contract, it was necessary to look at the consequences of the breach to see if they deprived the innocent party of substantially the whole benefit he should have received under the contract. On the facts, this was not the case, because the charterparty still had a substantial time to run. The defendants could only claim damages.
Diplock LJ said that there are many contractual undertakings of a complex character which cannot be categorised as being conditions or warranties. Of such undertakings some breaches will and others will not give rise to an event which will deprive the innocent party of substantially the whole benefit which it was intended he should obtain from the contract. The legal consequences of a breach of such undertaking, unless expressly provided for in the contract, depend upon the nature of the event to which the breach gives rise and do not follow automatically from a prior classification of the undertaking as a condition or warranty.
In the present case the shipowner's undertaking as to seaworthiness could be broken by the presence of trivial defects easily and rapidly remediable as well as by defects which would result in a total loss of the vessel. Consequently, the undertaking was one breach of which may give rise to an event which relieves the charterer of further performance of his undertakings if he so elects and another breach of which may not give rise to such an event but entitle him only to monetary compensation in the form of damages.

The Mihalis Angelos [1971] 1 QB 164
The owners of a ship let it to charterers, undertaking that the ship would be expected ready to load about 1 July, would proceed to a certain port for the loading of cargo, and that the charterer would have the option of cancelling the charter if the ship was not ready to load by July 20. The charterer was unable to get a cargo by July 17 and cancelled the charter, alleging that it was frustrated. The ship itself was not ready until July 23. At trial it was argued that the charterer was entitled to avoid the contract on July 17 because of a breach of contract by the shipowner, ie he had impliedly promised that he had reasonable grounds for believing that the ship would be ready to load on July 1, and that there were no such grounds. The trial judge held that there was a breach of this term, but the term was not a condition and the breach was not so fundamental as to give the right to terminate the contract.
The Court of Appeal held that the term was a condition and that the charterer had properly avoided the contract even though he had done so on the ground that the contract was frustrated when this was not the case. Lord Denning stated that "The fact that a contracting party gives a bad reason for determining it does not prevent him from afterwards relying on a good reason when he discovers it." Megaw LJ, discussing the term "expected ready to load … " stated:
"… such a term in a charterparty ought to be regarded as being a condition of the contract, in the old sense of the word "condition"; that is that when it has been broken, the other party can, if he wishes, by intimation to the party in breach, elect to be released from performance of his further obligations under the contract; and he can validly do so without having to establish that, on the facts of the particular case, the breach has produced serious consequences which can be treated as "going to the root of the contract" or as being "fundamental," or whatever other metaphor may be thought appropriate for a frustration case."
The Hansa Nord [1976] QB 44
Citrus pulp pellets for use in animal food had been sold for £100,000 under a contract which provided for "shipment to be made in good condition." Part of the goods had not been so shipped and in addition the market value in such goods had fallen at the delivery date. The buyers rejected the goods which were later resold pursuant to a court order and eventually reacquired by the original buyers for just under £34,000. The buyers then used the goods for the originally intended purpose of making cattle food, though the defective part of the goods yielded a slightly lower extraction rate than sound goods would have done.
The Court of Appeal held that rejection was not justified. The term as to shipment in good condition was neither a condition nor a warranty but an intermediate term; and there was no finding that the effect of its breach was sufficiently serious to justify rejection. The buyers seem to have tried to reject, not because the utility of the goods was impaired, but because they saw an opportunity of acquiring them at well below the originally agreed price. In these circumstances their only remedy was in damages: they were entitled to the difference in value between damaged and sound goods at the agreed destination.

Reardon Smith Line v Hansen-Tangen [1976] 3 All ER 570
In order to perform a charter, a steamship company nominated a vessel to be built by Osaka Shipbuilding Co and known as "Yard No. 354 at Osaka" (the name of the shipbuilder). She was built elsewhere, but by a company under Osaka's control and in accordance with the physical specifications in the charter. The tanker market fell and the charterers sought to reject.
It was held by the House of Lords that they were not entitled to do so. The phrase "Yard No. 354 at Osaka" was not part of the description but a mere substitute for a name: it was a means of identification, which, in the circumstances, had not failed. In order to reach this decision, the House looked at the background to the case. Lord Wilberforce expressed the view that the court must place itself in thought in the same factual matrix as that in which the parties were. In order to place himself in that factual matrix, he asked what was the commercial purpose of the charter parties and what was the factual background against which they were made.

Bunge Corp. v Tradax [1981] 2 All ER 513
Under a contract for the sale and purchase of soya bean meal, it was agreed that a shipment was to be made in June, by the 30th. The buyers had to provide a vessel and to give at least 15 days' notice of its probable readiness. The sellers would then nominate a port for delivery. The buyer gave notice on June 17, less than 15 days before the end of the shipment period. The seller repudiated the contract arguing that there had been a breach.
The House of Lords held that this term was a condition, so that the sellers were entitled to rescind on the ground that the notice reached them five days too late. Two justifications were given for this classification: (1) the sellers could not, as a practical matter, perform their own obligation of nominating a port for delivery until the buyers had given them notice of the ship's readiness to load; and (2) the classification promoted certainty, for it enabled the sellers to tell, immediately on receipt of the notice of the ship's readiness to load, whether they were bound to deliver. The House of Lords thought that in mercantile contracts time would usually be of the essence and not an innominate term.

(D) NOTE
If the term is described in the contract as a 'condition' that will not be conclusive. See:


Schuler v Wickman Machine Tools [1974] AC 235
Wickman were the exclusive selling agents in the UK for Schuler's goods. The agency agreement provided that it was a condition that the distributor should visit six named customers once a week to solicit orders. This entailed approximately 1,500 visits during the length of the contract. Clause 11 of the contract provided that either party might determine if the other committed 'a material breach' of its obligations. Wickman committed some minor breaches of this term, and Schuler terminated the agreement, claiming that by reason of the term being a condition they were entitled to do so.
The House of Lords held that the parties could not have intended that Schuler should have the right to terminate the agreement if Wickman failed to make one of the obliged number of visits, which in total amounted to nearly 1,500. Clause 11 gave Schuler the right to determine the agreement if Wickman committed a material breach of the obligations, and failed to remedy it within 60 days of being required to do so in writing.
The House had regard to the fact that the relevant clause was the only one referred to as a condition. The use of such a word was a strong indication of intention but it was not conclusive. Lord Reid felt that it would have been unreasonable for Schuler to be entitled to terminate the agreement for Wickman's failure to make even one visit because of the later clause. The word 'condition' made any breach of the clause a 'material breach', entitling Schuler to give notice requiring the breach to be remedied. But not, as Schuler sought, to terminate the contract forthwith without notice.
3. IMPLIED TERMS

In most contracts the primary obligations of the parties are contained in express terms. In addition there are various circumstances in which extra terms may be implied into the agreement.
A) TERMS IMPLIED BY CUSTOM
The terms of a contract may have been negotiated against the background of the customs of a particular locality or trade. The parties automatically assume that their contract will be subject to such customs and so do not deal specifically with the matter in their contract. See:
Hutton v Warren (1836) 1 M&W 466
The tenant of a farm was given six months' notice to quit. His landlord insisted that he continue to cultivate the land during the notice period in keeping with custom. The tenant successfully argued that the same custom entitled him to a fair allowance for the seeds and labour he used on the land.

B) TERMS IMPLIED BY THE COURT
(i) Intention of the Parties/Terms Implied as Fact
The courts will be prepared to imply a term into a contract in order to give effect to the obvious intentions of the parties. Sometimes the point at issue has been overlooked or the parties have failed to express their intention clearly. In these circumstances, the court will supply a term in the interests of 'business efficacy' so that the contract makes commercial sense. See:
The Moorcock (1889) 14 PD 64
The owner of a wharf agreed to provide mooring facilities for 'The Moorcock'. The ship was damaged when it hit a ridge of rock at low tide. Although the defendants had no legal control over the river-bed, they could ascertain its state but they had not done so. The court held that honesty of business required an implied undertaking on the part of the wharf owner that it was a reasonably safe place to moor a ship. The wharf owner had broken his implied undertaking and was, therefore, liable in damages to the ship owner.

A more recent test is the 'officious bystander test' used to incorporate implied obvious terms (Shirlaw v Southern Foundries [1940] AC 701). If while the parties were making their contract, an officious bystander were to suggest some express provision, they would both reply, "oh, of course." See, eg:
Wilson v Best Travel [1993] 1 All ER 353
Wilson booked a holiday in Greece with Best Travel. He fell through a glass door in the hotel and was injured and claimed that (a) there was an implied term that the hotel would be reasonably safe, or (b) there was a breach of a duty to provide services with care and skill under s13 of the Supply of Goods and Services Act 1982. In applying the officious bystander test, the court said that the defendants would not have said 'Oh, of course' to such a term, as the defendants had no control over the hotel. The hotels were inspected and as they met Greek standards (although not British ones) the defendants had acted with care and skill. Therefore the plaintiff's claim failed.
(ii) Relationship Between the Parties/Terms Implied by Law
In certain relationships and contracts the law seeks to impose a model or standardised set of terms as a form of regulation. Such terms arising from the relationship between the parties will be implied as of law. See:
Liverpool City Council v Irwin [1976] 2 All ER 39
The condition of a council tower block deteriorated: there were defects in the stairs and lifts and internal rubbish chutes became blocked. The Irwins alleged a breach on the part of the council of its implied covenant for their quiet enjoyment of the property. The House of Lords held that it was an implied term of a lease of a maisonette in a Council block that the landlord should take reasonable care to keep the common parts of the block in a reasonable state of repair. The term was clearly not implied in fact: the "officious bystander" test was not satisfied; nor was the implication necessary to give business efficacy to the contract. The implication arose because the nature of the relationship made it desirable to place some obligation on the landlord as to the maintenance of the common parts of the premises. It amounted to the imposition of a legal duty, in spite of the fact that no term could be implied in fact. However, on the facts there had been no breach of the obligation.
C) TERMS IMPLIED BY STATUTE
See the next Handout for the terms implied under:
• Sections 12, 13, 14 and 15 of the Sale of Goods Act 1979;
• Sections 13, 14 and 15 of the Supply of Goods and Services Act 1982; and
• the relevant provisions of the Sale and Supply of Goods Act 1994.