It appears to me that a detailed analysis must be performed if this court aims to achieve an objective and coherent conclusion as to the legal consequences of the various undertakings of both the parties: the plaintiff Lady Mary Crawley and the defendant Lord Matthew Crawley – to whom I will refer hereinafter as wife and husband.
Firstly, I will consider whether there is an impediment to the very existence of a contract due to a lack of objectively ascertained agreement.
Secondly, after having verified the presence of an offer and an acceptance, I will address the presence of intention to create legal relations between the parties.
Thirdly, I will determine whether the contract is void for lack of fresh consideration.
Fourthly, I will assess the nature and implications of two potential terms of the contract at hand.
Principle of objective intention
The defendant claims that he is not bound by his promise because his wife misunderstood his intention. He based such argument on the definition given in Smith v. Hughes of the principle of objective intention – hereinafter referred to as POI. Hannen J reasoned as follows:
“If by any means he knows that there was no real agreement (…) [the promisee] is not entitled to insist that the promise shall be fulfilled in a sense to which the mind of the promiser did not assent” .
In the present case, however, I cannot find an absence of real agreement, considering that the differences in understanding between parties are, if any, of mere degree and not nature.
Furthermore, the POI is for ‘reference to the interpretation which a reasonable man in the shoes of the offeree would place on the offer’ . In the words of Lord Clarke in RTS Flexible Systems Ltd v. Molkerei Alois Müller CmbH & Co KG (UK Production) :
“whether there is a binding contract (…) depends not upon their subjective state of mind, but upon consideration of what was communicated (…) and whether that leads objectively to a conclusion that they intended to create legal relations” .
Applying such unequivocal canons, I am bound to conclude that there was an objectively ascertainable intention between parties to rely on a similar, if not specular, promise and hence the contract cannot be invalidated on this basis.
Intention to create legal relations
This particular contract does not appear to raise significant issues as to the presence of an offer but rather to that of an acceptance. There was, in fact, an exchange of statements, followed by a written agreement. It is unclear whether the written document was signed, though it is clear that by conduct the offeree had unequivocally accepted the document as contractually binding.
The court here aims not to ‘make the bargain’ but sees its ‘sole function [as being] to interpret it’ by giving effect to the intention of both parties as they appeared when the agreement was made. Following the Lord Chancellor’s reasoning, if the parties ‘indicate by their conduct that they accept it, the contract is binding’ .
The implications of this ‘technical and schematic doctrine’ also underline the second stage of my analysis on intention to create legal relations – referred to as ITCLR. Based on all surrounding evidence, I am inclined to consider this not an entirely domestic but rather a hybrid-agreement: part-commercial, part-social.
Atkin J in Balfour v. Balfour outlines the rationale behind courts’ reluctance in finding ITCLR in domestic contexts as: (i) inapt, as ‘the principles of common law (…) find no place in the domestic code’ ; (ii) impractical, as courtrooms would be swamped with household disputes; (iii) incongruous, as contrary to the intentions of spouses who genuinely never contemplated legal consequences.
As this reasoning does not contemplate hybrid-agreements, I believe I must consider it but not blindly apply it to a case arising in significantly different circumstances. The law today reaches into the private sphere to a much greater extent: from matrimonial lawsuits in tort to the criminalization of marital rape. I cannot ignore such change in legal attitude by perpetuating a stagnant law of contracts. The overall relevance of Atkin J’s analysis is not compromised, simply adapted to this time and facts.
In line with this stance, there are a few elements indicating that the parties not only possessed an ITCLR, but actively pursued it by: jointly stipulating their agreement in writing and directly involving external third parties. The wife upholding the bargain to her detriment is also one of the elements that in Merritt v. Merritt led the court to find ITCLR. I hence conclude that the conduct of the parties clearly points to the presence of ITCLR and that the merely circumstantial fact of them living ‘in amity’ cannot supersede their deliberate commercial enterprises.
Valid consideration
The third limb of my analysis focuses on fresh consideration, as the written contract’s prime consideration appears undisputed: the wife promised to undertake the renovations and the husband promised to reimburse her for it.
It has been argued by the defendant that no valid consideration was provided for the husband’s promise of an extra £500 when it became clear the wife would not be able to complete the renovation on time. I have not been persuaded that this case can be equated with Stilk v. Myrick because in the present case the wife did not merely exercise a pre-existing contractual duty, but rather purported to obviate the disbenefit of an incomplete renovation.
I believe that resemblance should be found with Williams v. Roffey Bros Ltd . Here Glidewell LJ outlined the relevant law in six prepositions:
“(i) if A has entered into a contract with B to do work (…) for payment from B; and (ii) at some stage before A had completely performed his obligations under the contract, B has reason to doubt whether A will, or will be able to, complete his side of the bargain; and (iii) B thereupon promises A an additional payment in return for A’s promise to perform his contractual obligation (…); and (iv) as a result of giving his promise B (…) obviates a disbenefit; and (v) B’s promise is not given as a result of economic duress or fraud (…) ; then (vi) the practical benefit to B is capable of being consideration for B’s promise.”
All six elements being present, I am bound to find a ‘legally binding’ promise by applying such case’s ratio as set out by Hirst J in Anangel Atlas Compania Naviera SA v. Ishikawajima-Harima Heavy Industries Co. (No.2) :
“whoever provides the services, where there is (…) a practical avoidance of disbenefit for the promisee, there is good consideration, and it is no answer to say that the promisor was already bound”
Terms of the contract I
Two specific terms of this contract have proven particularly problematic: one express and one possibly implied.
I will commence with the clause addressing the employment of Miss Fitzcrawley and her company for a portion of the renovations, which was stated as a condition. It appears clear to me that no issue of incorporation of this term subsists, as notice was adequately given when both parties stipulated the contract. This clause has effectively been breached by his wife. The issue is whether the husband has the right to terminate the contract or ask for damages, contingently to the nature of the term itself.
Firstly, in establishing whether any term is technically a ‘condition’ , one of four instances must subsist and I will adopt such test as in BS&N Ltd v. Micado Shipping Ltd (Malta) (The ‘Seaflower’) . The first and second, regarding conditions imposed by statute or precedent, are inapplicable. Per the third instance, terms can qualify as conditions if there is ‘abundantly clear intention’ for such treatment, mere use of the word not sufficing ; per the fourth, the overall nature and surroundings of the contract can lead to a qualifying condition – but only by ‘necessary implication’. I believe this term falls short of the requirements of either instance, ultimately failing on all grounds.
Secondly, I concur that any term is a ‘warranty’ if ‘it can be predicated that no breach can give rise to an event which will deprive the party not in default of substantially the whole benefit’. Not employing those responsible for part of the renovations can hardly be equated with deprivation of the ‘whole benefit’ – i.e. the total renovation. I can hence hold this term to be a warranty, breach of which entitles the husband to damages only.
Terms of the contract II
The court must also consider whether to imply the oral representation of three bathrooms as a term, before concluding on the term’s categorization or potential breach. This possibility would only subsist through an implication ‘in fact’, established by Bowen LJ in The Moorcock as when ‘The law is raising an implication from the presumed intention of the parties with the object of giving to the transaction such efficacy as both parties must have intended’.
Admittedly, the parties’ lack of contractual drafting expertise could be a basis for implication. However, is the fact that the parties jointly compiled a written document after their oral exchanges overwhelmingly evidential of mere representation? After attentive contemplation, I find myself in accord with Lord Moulton in that ‘intentions of the parties can only be deduced from the totality of the evidence’ . I am also persuaded that to achieve objective contractual construction, the question for the court is one construed by Lord Hoffman in AG of Belize v. Belize Telecom Ltd : ‘whether such provision would spell out in express words what the instrument, read against the relevant background, would reasonably be understood to mean’.
Hence, I conclude that such clause must be implied because it is ‘necessary in the business sense to give efficacy in the contract’.
Ultimately, the contract was indeed construed as an entire obligation, which, as a consequence of all abovementioned considerations, I believe was substantially performed. In the words of Pickford LJ in Dakin & Co Ltd v. Lee , the plaintiff completed:
“some part of [the contract] insufficiently and badly; and that does not disentitle [her] to be paid, but it does entitle the defendant to deduct such an amount as is sufficient to put that insufficiently done work into the condition in which it ought to have been under the contract” .
Applying this, the husband must hence reimburse his wife of all strictly relevant documented expenses, and nothing else.