Author Name:   swati shanker

This article analysis the contribution of Lord Denning in the field of contract law through various cases...

Lord Denning was perhaps the greatest law-making judge of the century and the most controversial. His achievement was to shape the common law according to his own highly individual vision of society. Lord Denning was one of the most celebrated judges of his time. He is popular as a dissenting judge.

Lord Alfred Thompson Denning (1899-1999) was a Populist English judge whose career spanned 37 years. He was known as a fighter for the underdog and a protector of the little man's rights against big business. He served for 20 years as the head of the Court of Appeals, one of the most influential positions in the English legal system. Denning was a controversial judge who was often the dissenting voice on the bench. His decisions were based more on his religious and moral beliefs than the letter of the law and he was often criticized for his subjectivity. Denning retired from the bench in 1982 under a cloud of controversy regarding some racially insensitive views that he published. Denning continued to publish books during his retirement and died at the age of 100.

He has enriched various areas of law through his various precious judgements. This article highlights the contribution of Lord Denning in the field of law of contract. His contribution has been shown through his valuable decisions given in certain cases related to contract. It has also been tried to analyse the legacy of his judgements in contemporary era.

Legacy Of Denning's Judgment:
Denning has been described as the most influential judge of the 20th century. Denning became possibly the best known judge ever to belong to the English judiciary. He was equally well-loved and controversial, appreciated for his role as 'the people’s judge' and his support for the common man and disliked by elements of the bar and judiciary for 'uncertainty in the law' created by his broad judgments. Denning made sweeping changes to the Common Law, with the resurrection of equitable estoppel and his reform of divorce law. A common misconception is that most of his judgments were overturned in the House of Lords; many were, including the expansion to the doctrine of fundamental breach set out by him. Though some of his judgements are not valid today yet they provided incentives for further development of law.

Contribution Of Denning In Law Of Contract:
Lord Denning contributed a lot in the field of Law of Contract. His contribution can be restricted to the following areas of contract.

1. Standard form contract
(a) Reasonable notice of terms
(b) Theory of fundamental breach

2. Consideration
(a) Privity of contract
(b) Promissory estoppels

Standard Form Contract:-
Reasonable Notice Of Terms:

Standard form contracts are the contracts in written or printed form. Such standardised contracts contain a large number of terms and conditions in 'fine print' which restrict and often exclude liability under the contract.

LORD DENNING's contribution in the field of standard form contract can be cited in the case of:

1.Thornton V. Shoe Lane Parking Ltd. [1971]1 Aller 686 Ca
Facts:-
In this case the plaintiff parked his car and a ticket was thrown out by a machine. The ticket pointed to a poster inside the garage which displayed the conditions, one of which excluded liability for any injury to car or customer. While taking back his car, the plaintiff was injured, for which he brought an action and the defendants sought the protection of the exemption clause.

Issue:-
Whether the defendant i. e. the parking co. will be held liable?

Lord Denning's Remarks:-
Lord Denning in this case pointed out that:

“No customer in a thousand ever read the condition. If he had stopped to do so, he would have missed the train or the boat”. The individual therefore, deserves to be protected against the possibility of exploitation inherent in such contracts. Thus, evolved the concept of reasonable notice of terms.

He further pictorially remarked that in order to give sufficient notice, it would need to be printed in red ink with a red hand pointing to it, or something equally startling.

Thus, his this view evolved the concept of reasonable notice of terms.

Judgment:
The defendants were held liable. It was held that the exempting condition is so wide and so destructive of rights that the court should not hold any man bound by it unless it is drawn to his attention in the most explicit way.

2.Curtis V.Chemicalcleaning And Dyeing Co.[1951]1kb 805
Facts:
The plaintiff delivered a white satin wedding dress to the defendants for cleaning. On being asked to sign a receipt, she inquired why she was to sign it and was told that she was to take responsibility for any damage to beads and sequins. The plaintiff then signed the receipt without reading it. The receipt, in fact, contained a condition excluding liability for any damage howsoever caused. When the dress was returned there was a stain on it. On the plaintiff's action the cleaners pleaded the exemption clause.

Issue: Whether the defendants will be held liable or not?

Denning's View:
Denning stated that in those circumstances by failing to draw the attention to the width of the exemption clause the assistant created the false impression that the exemption only related to beads and sequins, and that it did not extent to the material of which the dress was made and this was sufficient to disentitled them from relying on the exemption clause.

Judgment:
The plaintiff customer was entitled to recover.

Where the person seeking to rely upon an exemption clause makes some verbal variation, the clause will be treated as void.

Theory Of Fundamental Breach:
Another means of getting around the injustice of exemption clauses is by means of the doctrine of fundamental breach. It is a method of controlling the unreasonable consequences of wide and sweeping exemption clauses. Even where adequate notice of the terms and conditions in a document has been given, the party imposing the condition may not be able to rely on them if he has committed a breach of the contract which can be described as 'fundamental'. The rule has been thus stated by Lord Denning LJ as:

“These exempting clauses are now-a-days all held to be subject to the overriding proviso that the only avail to exempt a party when he is carrying out his contract, not when he is deviating from it or is guilty of a breach which goes to the root of it. Just as a party who is guilty of a radical breach is disentitled from insisting on the further performance by the other, so too he is disentitled from relying on an exempting clause.”

3.Spurling Ltd v Bradshaw [1956] EWCA Civ 3

J Spurling Ltd v Bradshaw [1956] EWCA Civ 3 is an English contract law and English property law case on exclusion clauses and bailment. It is best known for Denning LJ's red hand rule comment where he said,

“I quite agree that the more unreasonable a clause is, the greater the notice which must be given of it. Some clauses which I have seen would need to be printed in red ink on the face of the document with a red hand pointing to it before the notice could be held to be sufficient.”

Facts
J Spurling Ltd had a warehouse in East London. Mr Andrew Bradshaw had eight barrels of orange juice. He asked Spurling Ltd to store them. In the contract was the "London lighterage clause" which exempted warehousemen from liability due to their negligence. When the barrels were collected, they were damaged. When Bradshaw refused to pay Spurling Ltd, the company sued for the cost. Bradshaw counterclaimed for damages for breach of an implied term of a contract of bailment to take reasonable care.

Judgment
Denning, held that although the warehouse employees were negligent, the clause effectively exempted them. . But his reference to the concept of a fundamental breach precluding an exclusion of liability was rejected by the House of Lords some years later.

If the clause is taken literally, it is wide enough to exempt the company from any obligation to redeliver the goods. It would mean that if the managing director sold the orange juice to somebody else, or used it up for the company's purposes, maybe by mistake or even dishonestly, the company would not be liable; or if some discontented storeman took the bung out of a barrel and let the orange juice escape, the company still would not be liable. If the clause went to those lengths, it would be very unreasonable and might for that reason be invalid.

The essence of the contract by a warehouseman is that he will store the goods in the contractual place and deliver them on demand to the bailer on his order. If he stores them in a different place, or if he consumes or destroys them instead of storing them, or if he sells them, or delivers them without excuse to somebody else, he is guilty of a breach which goes to the root of the contract and he cannot rely on the exempting clause. But if he should happen to damage them by some momentary piece of inadvertence, then he is able to rely on the exempting clause: because negligence by itself, without more, is not a breach which goes to the root of the contract. Denning stated that i would not like to say, however, that negligence can never go to the root of the contract. If a warehouseman were to handle the goods so roughly as to warrant the inference that he was reckless and indifferent to their safety, he would, I think, be guilty of a breach going to the root of the contract and could not rely on the exempting clause. He cannot be allowed to escape from his obligation by saying to himself: "I am not going to trouble about these goods because I am covered by an exempting clause."

Another thing to remember about these exempting clauses is that in the ordinary way the burden is on the bailee to bring himself within the exception. A bailor, by pleading and presenting his case properly, can always put on the bailee the burden of proof.

3. Consideration:
Consideration means something which is of some value in the eye of law. The most commonly accepted definition is that in curie v. Misa. It stated that a valuable consideration in the sense of the law, may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearence, detriment, loss, or responsibility given, suffered or undertaken by the other.

LORD DENNING'S contribution in the field of consideration can be restricted to two main areas:

Promissory Estoppel:
It is a rule of Evidence preventing a person to deny the statement of the fact which he had made earlier and by which he had made others to believe and to act upon. It is provided in s.115 of the evidence act.

In England also “the law for centuries has been that an act done at the request of another, express or implied, is sufficient consideration to support a promise”

LORD DENNING in an article recent developments in the doctrine of consideration, [1952] 15 mod LR1. has stated that, “nowadays there are some grounds for suggesting that an act may be good consideration even though it is not a benefit to the promisor nor a detriment to the promisee. If a man promises a charitable institution that he will pay hundred pounds into its funds if it procures nine other persons to do the same, justice requires that his promise joule be held binding on him as soon as it has procured the nine others to pay a 100 pounds each; but the act done by the institution is not a benefit to him nor a detriment to the institution.”

4.Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 (or the High Trees case)

It is a case in contract law in England and Wales. Denning J held estoppel to be,

“A promise was made which was intended to create legal relations and which, to the knowledge of the person making an English contract law decision in the High Court. It reaffirmed the doctrine of promissory estoppel the promise, was going to be acted on by the person to whom it was made and which was in fact so acted on.”

Facts
In 1937, High Trees House Ltd leased a block of flats in Balham, London, for a rate £2500/year from Central London Property Trust Ltd. Due to the conditions during the beginning of World War IIoccupancy rates were drastically lower than normal.

In January 1940, to ameliorate the situation the parties made an agreement in writing to reduce rent by half. However, neither party stipulated the period for which this reduced rental was to apply. Over the next five years, High Trees paid the reduced rate while the flats began to fill, and by 1945, the flats were back at full occupancy. Central London sued for payment of the full rental costs from June 1945 onwards (i.e. last 2 quarters of 1945).

Judgment
Based on previous judgments Denning J held that the full rent was payable from the time that the flats became fully occupied in mid-1945. However, he continued in an obiter statement that if Central London had tried to claim for the full rent from 1940 onwards, they would not have been able to. This was reasoned on the basis that if a party leads another party to believe that he will not enforce his strict legal rights, then the Courts will prevent him from doing so at a later stage. This obiter remark was not actually a binding precedent, yet it essentially created the doctrine of promissory estoppel.

DENNING held that “If I were to consider this matter without regard to recent developments in the law, there is no doubt that had the plaintiffs claimed it; they would have been entitled to recover ground rent at the rate of 2,500. A year from the beginning of the term, since the lease under which it was payable was a lease under seal which, according to the old common law, could not be varied by an agreement by parole (whether in writing or not), but only by deed. Equity, however stepped in, and said that if there has been a variation of a deed by a simple contract.( With regard to estoppel, the representation made in relation to reducing the rent, was not a representation of an existing fact. It was a representation, in effect, as to the future, namely, that payment of the rent would not be enforced at the full rate but only at the reduced rate. Such a representation would not give rise to an estoppel because, a representation as to the future must be embodied as a contract or be nothing.

Denning sated that if the case had been one of estoppel, it might be said that in any event the estoppel would cease when the conditions to which the representation applied came to an end, or it also might be said that it would only come to an end on notice. In either case it is only a way of ascertaining what is the scope of the representation. He said I prefer to apply the principle that a promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as its terms properly apply. Here it was binding as covering the period down to the early part of 1945, and as from that time full rent is payable.

HE therefore gave judgment for the plaintiff company for the amount claimed.

Privity of Contract
The rule of privity of contract means that stranger to a contract can neither sue nor be sued. This rule has taken firm rules in English contract law.

LORD DENNING'S contribution in this area can be well illustrated with the help of landmark case of BESWICK V.BESWICK.

5.Beswick V.Beswick [1967] Ukhl 2:
Beswick v Beswick [1967] UKHL 2 is a landmark English contract law case on privity of contract and specific performance. The House of Lords disagreed with Lord Denning MR's dicta in the Court of Appeal that someone specifically intended to benefit from a contract could enforce it.

Today Lord Denning MR's decision has been given effect to through the Contracts (Rights of Third Parties) Act 1999

Facts
Lord Denning in the Court of Appeal started describing the facts of the case in the following way.

Old Peter Beswick was a coal merchant in Eccles, Lancashire. He had no business premises. All he had was a lorry, scales, and weights. He used to take the lorry to the yard of the National Coal Board, where he bagged coal and took it round to his customers in the neighbourhood. His nephew, John Joseph Beswick, helped him in his business. In March 1962, old Peter Beswick and his wife were both over 70. He had had his leg amputated and was not in good health. The nephew was anxious to get hold of the business before the old man died. So they went to a solicitor, Mr. Ashcroft, who drew up an agreement for them.

The agreement was that Peter assigns his business to his nephew in consideration of the nephew employing him for the rest of his life and then paying a weekly annuity to Mrs Beswick. Since the latter term was for the benefit of someone not party to the contract, the nephew did not believe it was enforceable and so did not perform it, making only one payment of the agreed weekly amount of 5 pounds.

The nephew argued that as Mrs Beswick was not a party to the contract, she was not able to enforce it due to the doctrine of privity of contract.

Lord Denning MR held that Mrs Beswick was entitled to claim in her capacity as a third party intended to benefit from the contract. He said,

Where a contract is made for the benefit of a third person who has a legitimate interest to enforce it, it can be enforced by the third person in the name of the contracting party or jointly with him or, if he refuses to join, by adding him as a defendant. In that sense and it is a very real sense, the third person has a right arising by way of contract.

Judgment
Court of Appeal
The court of appeal held that she was entitled to enforce the agreement. The plaintiff was allowed to enforce the agreement in her personal capacity, although she was not a party to the contract and it was considered not necessary to infer a trust in favour of the plaintiff.

House of lords
Danckwerts LJ and Salmon LJ concurred in the result, though not with Lord Denning MR's reasoning

The House of Lords did not approve the approach initiated by Lord Denning MR and found for the plaintiff on a different ground. LORD REID said that the plaintiff in her personal capacity has no right to sue, but she has a right as administrix of her husband's estate to require the appellant to perform this obligation under the agreement”. LORD PEARCE stated that “the estate(though not the widow personally) can enforce it”.

Significance Of This Opinion Of Denning:
Today Lord Denning MR's decision has been given effect to through the Contracts (Rights of Third Parties) Act 1999.

Bibliography:
# Denning, Alfred Thompson (1983). The Closing Chapter. Butterworths.
# McKendrick, Ewan (2007). Contract Law (7th ed.). Palgrave Macmillan.
# Heward, Edmund (1990). Lord Denning: A Biography. George Weidenfeld & Nicholson Limited
# landmark in the law, lord Denning,lexis nexis ,2004

The  author can be reached at: swatishanker@legalserviseindia.com

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