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Formalities in contract law

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stephen carruthers

on 14 October 2015

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Transcript of Formalities in contract law

formalities in Irish contract law
Dr Stephen Carruthers

Memorandum is evidence of pre-existing contract
Godley v. Power (1961) HC
‘all essential terms’
Memorandum confirmatory of oral agreement
Content of Memorandum
Memorandum must identify:
Material/essential terms
Subject matter
Guardian Builders v Patrick Kelly HC 1981
sufficient detail
Supermacs Ireland v Katesan (Naas) Ltd. (2004) HC
Terms of deposit not necessarily material term
Requirements of Memorandum -1
Land and Conveyancing Law Reform Act 2009
Section 8 repeals Section 2 of the Statute of Frauds (Ireland) Act 1695 so far as it relates to contracts for the sale or other disposition of estates or interests in land. Partially replaced by s.51.

Section 51.—(1) Subject to subsection (2), no action shall be brought to enforce any contract for the sale or other disposition of land unless the agreement on which such action is brought, or some memorandum or note of it, is in writing and signed by the person against whom the action is brought or that person’s authorized agent. (2) Subsection (1) does not affect the law relating to part performance or other equitable doctrines. (3) For the avoidance of doubt, but subject to an express provision in the contract to the contrary, payment of a deposit in money or money’s worth is not necessary for an enforceable contract.
Contracts to be Evidenced in Writing - 3
Statute of Frauds (Ireland) Act 1695- S.2

Contracts to ‘answer for’ the ‘debt, default or miscarriage’ of another
guarantee vs indemnity

Actionstrength Ltd V International Glass Engineering (2003) H/L
Contracts to be Evidenced in Writing -1
Healy v Healy [1973]
Anom Engineering v Thornton [1983]

Black v Grealy [1977]

Actionstrength v Intl. Glass Engineering [2003]
Equitable Doctrines of Waiver and Estoppel
Mackey v Wilde (1997) SC
4 Requirements for doctrine
concluded oral contract
P. evinced intention to be bound
D. induced such intention
Inequitable to allow D. to rely on Statute

Preparatory acts not sufficient
Jodifern v Fitzgerald (1999) HC

Payment of money must be referable to contract
Steadman v. Steadman (1976) AC 536
Howlin v. Thomas Power (Dublin) Ltd 1978
Equitable doctrine of part-performance
‘Subject to Contract’ effective
Mulhall v Haren
(1981) HC
Review of English case-law
Tiverton Ltd v Wearwell Ltd (1975) CA v Law v Jones (1974) CA
Boyle v Lee and Goyns
(1992) SC (3-2)
no contract if STC
Jodifern v Fitzgerald
(2000) SC
‘subject to contract’ in memorandum effective only if at head of document
Requirements of Memorandum – 3
Joinder of documents
McQuaid v. Lynam and Lynam (1965)
Kevin Warren v Sean Dunne (2006) HC – settled

Signature and writing requirements
Casey v. Irish Intercontinental Bank (1979) SC
printed name sufficient
J Pereira Fernandes SA v Mehta (2006) HC (eng.)
Interpretation Act 1937 – Schedule
The word "writing" includes printing, type-writing, lithograpy, photography, and other modes of representing or reproducing words in visible form, and cognate words shall be construed accordingly.

Electronic Signature Directive (99/93/EC)
Electronic Commerce Act 2000

Requirements of Memorandum – 2
Sale of Goods Act 1893, Section 4
(1) A contract for the sale of any goods of the value of ten pounds or upwards shall not be enforceable by action 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 agent in that behalf.‘’
If the buyer actually receives and accepts all or part of the goods sold:
s. 4(3)
Tradax Ireland v. Irish Grain Board (1984)

Hopton v. McCarthy (1882)
no acceptance
Something given in earnest to bind the contract
Buyer has tendered payment in full or in part and it has been accepted by the seller
Kirwan v. Price (1958)
rejected cheque
Contracts to be Evidenced in Writing - 5
Deasy’s Act, 1860, section 4
Damien Sheridan v. The Louis Fitzgerald Group Limited, Burston Limited (2006) HC
entry into possession as part performance
Interlocutory injunction refused

Contracts to be Evidenced in Writing - 4
Statute of Frauds (Ireland) Act 1695- S.2
contracts the consideration for which is marriage
s. 2 Family Law Act 1981 – contract to marry not enforceable

contracts not to be performed within one year of conclusion
Naughton v. Limestone Land Co. (1952)
over one year
Hynes v. Hynes (HC) (1984)
under one year
Contracts to be Evidenced in Writing – 2

English law

S.4 1677 English Statute for the Prevention of Frauds and

adopted in many US and Commonwealth jurisdictions
required written formalities
Originally MYLEGS (marriage, year, land, executor, goods, surety).
S 4 repealed by Law Reform (Enforcement of Contracts ) Act 1954 except for guarantee transactions – land transactions separate legislation

Irish Law
Statute of Frauds (Ireland) Act 1695
Statute of Frauds retained by Statute Law Revision Act 2007 – Schedule 1 http://www.irishstatutebook.ie/isbc/preunionirishstatutes.html

Section 8 of 2009 Land and Conveyancing Law Reform Act repeals Section 2 of the Statute of Frauds (Ireland) Act 1695 in so far as it relates to contracts for the sale or other disposition of estates or interests in land. S. 2 is partially replaced by s.51
The Statute of Frauds – 1695
Implementation in Ireland by:
Electronic Commerce Act 2000
S.2(1) definition of electronic signature and advanced electronic signature
Electronic signature: ‘data in electronic form which are attached or logically associated with other electronic data and which serves as a method of authentication’
see Mehta v J Pereira Fernandes SA (2006) HC (Eng.)
Golden Ocean Group Limited v Salgaocar Mining Industries PVT Ltd and another [2012] EWCA Civ 265
WS Tankship II BV v The Kwangju Bank Ltd and another [2011] EWHC 3103

Advanced Electronic signature: may be used as equivalent to sealing (Art. 16)
S. 13 validates use of electronic signature if other party consents
S.19 ‘An electronic contract shall not be denied legal effect, validity or enforceability solely on the grounds that it is wholly or partly in electronic form, or has been concluded wholly or partly by way of electronic communication.’
S.10(1)(b) – interests in real property subject to reservation
Formalities and Electronic signatures
Sections 62-65 Land and Conveyancing Law Reform Act 2009
a legal estate or interest in land may only be created or conveyed by a deed (s.62(1))
Abolition of requirement for sealing by individuals but not corporations (s.64)
Abolition of rule that mere affixing of corporate seal constitutes full delivery (s.65)
Formalities and Deeds
The pitfalls of no written terms ..
Video takes on formalities and contract law (American law !!!)

UK Law Reform (Enforcement of Contracts) Act 1954

Uniform Commercial Code- § 2-201(1)
US Restatement (2nd) Contracts para. 139

Formalities in other jurisdictions
General rule writing not required BUT

Deeds under Seal
Avoids requirement of consideration
Sealing requirement abolished by UK Law of Property (Miscellaneous Provisions) Act 1989
Sealing abolished under Land and Conveyancing Law Reform Act 2009 for individuals but NOT companies

Contracts wholly in writing
Specific statutes
Consumer legislation

Contracts to be evidenced in writing
S.2 Statute of Frauds 1695
S.4 Sale of Goods Act 1893
S. 51 Land and Conveyancing Law Reform Act
s.4 Deasey's Act 1860
WS Tankship II BV v The Kwangju Bank Ltd and another [2011] EWHC 3103

Golden Ocean Group Limited v Salgaocar Mining Industries PVT Ltd and another [2012] EWCA Civ 265
Associated British Ports -v- Ferryways NV [2008] 2 All ER (Comm) 504
difference between guarantee and indemnity -

Contracts in writing - summary
Definition of Deed
Chapter 3 Land and Conveyancing Law Reform Act 2009

s.64 definition of deed
formalities for deeds
Full transcript