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To T, with whom I have made no agreement
from an equal bargaining position.
— MJF
To Rosie, Damian and Garry.

— DGG
Hong Kong University Press
14/F Hing Wai Centre
7 Tin Wan Praya Road
Aberdeen
Hong Kong
© Michael J. Fisher and Desmond G. Greenwood 2007

First published 2007
Reprinted 2008, 2009
ISBN 978-962-209-865-7
All rights reserved. No portion of this publication may be reproduced

or transmitted in any form or by any means, electronic or mechanical,
including photocopy, recording, or any information storage or retrieval
system, without permission in writing from the publisher.
Secure On-line Ordering

http://www.hkupress.org
British Library Cataloguing-in-Publication Data

A catalogue copy for this book is available from the British Library
Printed and bound by Cheer Shine Enterprise Co. Ltd., Hong Kong, China
Contents
Preface ix
Table of Cases xi
Table of Legislation xxvii
Chapter 1 The Nature of Contract Law 1

OVERVIEW 1
1.1 What Contract Is 2
1.2 The Function of Contract Law 8
Chapter 2 Sources of Hong Kong Contract Law 21

OVERVIEW 21
2.1 Hong Kong Contract Law before 1997 22
2.2 The Effect of the “Handover” and the Basic Law:
Hong Kong’s Present System 26
2.3 The Declaratory Theory of Judicial Precedent 32
2.4 The Continuing Inuence of English Law in Practice 34
Chapter 3 Agreement 37
OVERVIEW 37
3.1 The Signicance of Agreement 38
3.2 The Requirement of Offer and Acceptance 38
3.3 Offer Distinguished from Invitation to Treat 40
3.4 The Nature of Acceptance 47
3.5 Communication of Acceptance 52
3.6 Acceptance in Ignorance of the Offer 58
3.7 Termination of Offer 60
3.8 Certainty of Agreement 64
vi Contents
Chapter 4 Consideration 73
OVERVIEW 73
4.1 The Nature of Consideration 76
4.2 Past Consideration 79
4.3 Consideration Must Move from the Promisee 80
4.4 Sufciency of Consideration 81
4.5 Performance of Existing Duty 86
4.6 Part-payment of a Debt 95
4.7 Promissory Estoppel 99
4.8 The Need for the Doctrine 106
Chapter 5 Intention to Create Legal Relations 109

OVERVIEW 109
5.1 Is Intention Necessary? 110
5.2 Domestic and Social Arrangements 112
5.3 Commercial Arrangements 115
Chapter 6 Contractual Capacity 119

OVERVIEW 119
6.1 Drunkenness and Mental Incapacity 121
6.2 Corporations 121
6.3 Minors (Infants) 122
Chapter 7 Formality 133

OVERVIEW 133
7.1 The General Rule 134
7.2 Contracts under Seal 135
7.3 Contracts in Writing or Evidenced in Writing 136
Chapter 8 Contractual Terms 145

OVERVIEW 145
8.1 Representations and Terms 146
8.2 Written Contracts: The Parol Evidence Rule 150
8.3 Implied Terms 153
8.4 Classication of Terms: Conditions, Warranties and 160
Innominate Terms
8.5 Exemption Clauses 168
Contents vii
Chapter 9 Misrepresentation 191

OVERVIEW 191
9.1 The Scope of Misrepresentation 193
9.2 Rescission for Misrepresentation 203
9.3 Damages for Misrepresentation 208
9.4 Contributory Negligence 217
9.5 Exemption of Liability for Misrepresentation 218
Chapter 10 Mistake 221

OVERVIEW 221
10.1 Is a Doctrine of Mistake Necessary? 223
10.2 Types of Mistake 224
10.3 Common Mistake 225
10.4 Mutual Mistake 233
10.5 Unilateral Mistake 235
10.6 Rectication of Written Documents 242
10.7 Non Est Factum 244
10.8 Proposals for Reform 245
Chapter 11 Duress and Undue Inuence 249

OVERVIEW 249
11.1 Duress 251
11.2 Undue Inuence 262
Chapter 12 Unconscionability 283

OVERVIEW 283
12.1 Statutory Unconscionability in Hong Kong 284
12.2 Unconscionability at Common Law 287
Chapter 13 Illegal Contracts 291

OVERVIEW 291
13.1 Types of Illegal Contracts 292
13.2 Gambling Contracts 295
13.3 The Effects of Illegality 296
13.4 Contracts in Restraint of Trade 308
viii Contents
Chapter 14 Termination of contracts 323

OVERVIEW 323
14.1 Termination by Agreement 324
14.2 Termination by Performance 326
14.3 Termination by Breach 330
14.4 Termination by Frustration 340
Chapter 15 Remedies for Breach of Contract 357

OVERVIEW 357
15.1 Damages 358
15.2 Equitable Remedies 383
15.3 Limitation of Actions 390
Chapter 16 Privity of Contract 393

OVERVIEW 393
16.1 The Doctrine of Privity of Contract 394
16.2 Third Party Benets 394
16.3 Third Party Burdens 401
16.4 The Relationship with Consideration 404
16.5 Proposals for Reform 404
Appendix 1 Glossary of Terms 411

Appendix 2 Important Contract Legislation: English and
Hong Kong Equivalents 416
Appendix 3 Limitation Periods: English and Hong Kong Equivalents 418
Bibliography 419
Index 421
Preface
It is now more than 10 years since the last publication of Betty Ho’s Contract Law in
Hong Kong, the only comprehensive student text on this subject. In the intervening
period, a great number of changes have been made to the law of Hong Kong (and that of
England, which continues to exercise signicant inuence here). Hong Kong’s contract
law has been considerably affected by these changes, both at the specic, contract-law
level and at the more overall, “macro” level, given the profound effect of Hong Kong’s
return to Chinese sovereignty in 1997. The legal (and political) signicance of the 1997
handover is summarised at some length in chapter 2. Sufce to say here that, despite the
continuation of the common law in Hong Kong as guaranteed by the Basic Law, “1997”
has presented Hong Kong with the opportunity to develop a unique jurisprudence,
inuenced by a combination of sources — from the former colonial power, from China
mainland and, most important, from within Hong Kong itself, now exercising an “almost”
full right of nal adjudication.
Given the changes outlined, we feel that a new comprehensive and readable student
text is long overdue. We stress “readability” since, except for the largely descriptive rst
two chapters, our text places particular focus on the “stories”, the cases which form the
foundation of Hong Kong contract law. As a “common law”-based jurisdiction, Hong
Kong’s law derives primarily from the decided cases and this is particularly true in
the areas of contract and tort law. While legislative rules are an increasingly important
source of Hong Kong contract law, especially in the area of consumer protection, the
role of legislation remains to “ll the gaps” rather than, as in civil law jurisdictions,
to provide a complete, codied legal framework. We believe, therefore, in conveying
contract law through the careful examination and explanation of case illustrations. This
has the further advantage that the study of cases is far more reader-friendly than a focus
on dense, legalise, text, especially given that many of our readers will be studying law in
their second language.
As we have already implied, this book is written principally for the law student,
though it should be of interest to students of other disciplines who need an understanding
of contract law. We are also gratied to know that many members of the legal profession
here have expressed interest in, and support for, this text.
x Preface
Finally, we wish, on an introductory basis to explain two issues of style. The rst
relates to the use of terms such as “plaintiff”, “defendant”, etc. In England, though not
in Hong Kong, the terminology has changed over the last few years such that the former
“plaintiff” has now become the “claimant”. What we have endeavoured to do throughout
is to use the terminology prevalent at the time a particular case was reported. The second
explanation relates to the use of the expression “he” to include both the masculine and
the feminine. This “Interpretation Act”1 approach avoids the use of the clumsy s/he
pronoun or the grammatically incorrect use of “they” and “their” to indicate a gender-
neutral singular. We are, of course, fully aware that women make contracts and have full
contractual capacity in Hong Kong.
We have endeavoured to state the law accurately as of 25 April 2007.
1. From the Interpretation Act, 1889, which enacts that, unless the context otherwise requires, the
masculine shall include the feminine and the singular the plural.
Table of Cases
Adams v Lindsell 57
Addis v Gramaphone Co 365, 367, 368
Adler v Dickson 178–9
Aerial Advertising v Batchelors Peas Ltd (Manchester) 368
Afovos, The 336
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd and Securicor 174, 176, 185
Alan & Co Ltd v El Nasr Export and Import Co 104
Alaskan Trader, The see Clea Shipping Corp case
Albert v Motor Insurers’ Bureau 115
Allcard v Skinner 266, 278, 391
Alliance and Leicester Building Society v Edgestop Ltd 217
Always Win Ltd v Autot Ltd 73
A-Mayson Development Co Ltd v Bettert 336
Amalgamated Investment & Property Co Ltd v J Walker & Sons Ltd 246–7, 343–4
Andayani v Chan 157, 302
Andre et Cie v Ets Michel Blanc & Fils 199
Andrews Bros Ltd v Singer & Co Ltd 174
Anglia Television Ltd v Reed 373–4
Annadale v Harris 295
Apple Corps Limited v Apple Computer, Inc 56
Appleby v Myers 54
Appleson v H. Littlewood Ltd 115
Appleton v Campbell 294
Arrale v Costain Civil Engineering Ltd 84
Ashmore, Benson, Pease & Co Ltd v AV Dawson Ltd 304–5
Associated Japanese Bank (International) Ltd Credit du Nord SA 223, 228
Astley v Austrust Ltd 383
Atkinson v Denby 301
Atlantic Baron, The (North Ocean Shipping v Hyundai) 254–5
Atlas Express Ltd v Kafco (Importers and Distributors) Ltd 93, 256, 258, 262
Attorney General v Melhado Investments Ltd 156
xii Table of Cases
Attorney General and Another v Humphreys Estate (Queen’s Garden) Ltd 48, 70
Attorney-General of Australia v Adelaide Steamship Co 319
Attwood v Lamont 312, 320–1
Attwood v Small 201–2
Au Wing Cheung v Roseric Ltd 49
Austerberry v Oldham Corporation 402
Avery v Bowden 339, 345
Avon Finance Co Ltd v Bridger 273
Awwad v Geraghty 302
Aylesford (Earl of) v Morris 288
BCCI v Aboody 263

BCCI v Ali (No 2) 369
BG Plc v Nelson Group Services (maintenance) Ltd 197–8
BP Exploration Co ( Libya) Ltd v Hunt (No 2) 353–4
BP Renery (Westernport) Pty Ltd v Pres. of Shire of Hastings 156
Balfour v Balfour 110, 112–3
Ballett v Mingay 120, 129
Bank of China (Hong Kong) Ltd v Wong King Sing & Others 32, 269
Bannerman v White 147
Barclay’s Bank v Coleman 267
Barclay’s Bank v O’Brien 265, 268, 274–5, 277, 279
Barton v Armstrong 252
Baskcomb v Beckwith 85
Beacon College Ltd v Yiu Man Hau & others 390
Behnke v Bede Shipping Co Ltd 386
Behzadi v Shaftesbury Hotels Ltd 333
Bell v Lever Bros 224, 227–231, 233–4
Belvoir Finance Co Ltd v Stapleton 303
Bentley (Dick) Productions Ltd v Harold Smith (Motors )Ltd 149, 191, 208
Bestkey Development Ltd v Incorporated Owners of Fine Mansion 103, 105
Best Sheen Development Ltd v Ofcial Receiver and Trustee 300, 306
Beswick v Beswick 397–401
Bewise Motors Co Ltd v Hoi Kong Container Services Ltd 175–6
Birse Construction Ltd v Eastern Telegraph Co Ltd 373
Bissett v Wilkinson 198
Blackpool and Fylde Aeroclub Ltd v Blackpool Borough Council 46
Bliss v SE Thames RHA 367
Bolton v Mahadeva 329
Bowerman v Association of British Travel Agents Ltd 115
Bowmakers Ltd v Barnet Instruments Ltd 292, 299
Brace v Calder 380
Bradbury v Morgan 64
Table of Cases xiii
Bradford v Robinson Rentals 364

Bravo Two Zero, The Case see R v HM’S A–G for England and Wales
Brennan v Bolt Burdon 230
Bridge v Deacons (a rm) 313–4, 318
Brimnes, The 56, 62
Brinkibon Ltd v Stahag Stahl 56
British Reinforced Concrete Engineering Co Ltd v Schelff 316
British Russian Gazette & Trade Outlook Ltd v Assoc Newspapers Ltd 325
Buchanan, Susan v Janesville Ltd 313
Bull v Pitney-Bowes Ltd 315, 319
Bunge Corp v Tradax Export SA 167–8, 333
Burnard v Haggis 129
Butler Machine Tool Ltd v Ex-Cell-O-Corp (England) Ltd 50–1
Byrne v Van Tienhoven 58, 61
CCC Films (London) Ltd v Impact Quadrant Films Ltd 374

CIBC Mortgages Plc v Pitt 250, 263–4, 275–6
CMC Group plc v Zhang 377
CTN Cash & Carry Ltd v Gallagher Ltd 259–60
Cable & Wireless (Hong Kong) Ltd Staff Association v Hong Kong 116
Telecom International Ltd
Calimpex International v ENZ 39
Canada Steamship Lines Ltd v R 175
Car and Universal Finance v Caldwell 204, 206
Carillon Construction Ltd v Felix (UK) Ltd 257–8
Carlill v Carbolic Smoke Ball Co 44–5, 54, 60, 62–3, 79, 118, 296
Casey’s Patents, Re 80
Cehave v Bremer (the Hansa Nord) 7, 166
Central London Property Trust Ltd v High Trees House Ltd 97, 99, 101–2, 105–7
Centrovincial Estates plc v Merchant Investors Insurance Co Ltd 3, 39
st
21 Century Logistic Solutions v Madysen 302–3
Chan Ting-lai, Peter v Same Fair Co Ltd 301
Chan Woon-hung t/a Ocean Plastic Factory v Assoc. Bankers Insur Co Ltd 171, 246
Chan Yat v Fung Keong Rubber Manufactory Ltd 138
Chan Yeuk Yu v Church Body of the Hong Kong Sheung Kung Hui 118, 200
Chandler v Webster 350–1
Chapelton v Barry UDC 170
Chaplin v Hicks 375–6
Chaplin v Leslie Frewin (Publishers) Ltd 126
Chappell & Co Ltd v Nestle Co Ltd 82–3
Cheese v Thomas 13, 279–80, 385
Chemco Leasing v Rediffusion 118
Cheng Kwok-fai v Mok Yiu-wah, Peter and Another 218–9
xiv Table of Cases
Chesneau v Interholme 214

Cheuk Tze Kwok v Leung Yin King and another 243
Chichester v Cobb 95
Chin Luk Properties Ltd v Casil Cleaning Ltd 359
China Great Wall Finance Co v Wonderyouth Industries Ltd 69
Chong Kai Tai & another v Lee Gee Kee & another 332
Chu Yu Tin & Others v Lo Kwok Hung 68
Chuang Yue Chien Eugene v Ho Yau Kwong Kevin 294
Chung Mui Teck & others v Hang Tak Buddhist Hall Association and anor 300
Chwee Kin Keong & Others v Digilandmall.com Pte Ltd 236–7
Citilite Properties Ltd v Innovative Development Co Ltd 243
City and Westminster Properties Ltd v Mudd 153
City Polytechnic of Hong Kong v Blue Cross (Asia-Pacic) Insurance Ltd 88
City University of Hong Kong v Blue Cross (Asia-Pacic) Insurance Ltd 47
Clarke v Dunraven 4, 38
Clea Shipping Corp v Bulk Oil International (The Alaskan Trader)(No 2) 340–1, 381
Clements v London and North Western Railway Co 125–6
Cleveland Petroleum Co Ltd v Dartstone Ltd 318
Clifford, Frank W Ltd v Garth 307
Cole v Rana 366
Collins v Godefroy 86
Combe v Combe 99, 102
Condor v Barron Knights Ltd 344–5
Conlon v Simms 197
Constantine (Joseph) Steamship Line Ltd v Imperial Smelting Corp Ltd 348
Cooper v Phibbs 225
Cosmo Sea Freight (HK) Ltd v Gold King Consolidator Ltd 85
Couchman v Hill 147, 152, 180
Couturier v Hastie 223, 225–6, 228
Coward v Motor Insurers’ Bureay 114–5
Cricklewood Property & Investment v Leighton’s Investment Trust 349
Crow v Rogers 396
Cundy v Lindsay 239–241
Currie v Misa 76
Curtis v Chemical Cleaning and Dyeing Co Ltd 180, 194
Cutter v Powell 323, 326, 344
D & C Builders v Rees 13, 96, 103–4, 106, 253, 289, 385
DSND Subsea Ltd v Petroleum Geoservices ASA 257–8
Darton Ltd v Hong Kong Island Development Ltd 48
Daulia Ltd v Four Millbank Nominees Ltd 63
Davis Contractors Ltd v Fareham UDC 6, 246, 342, 344
De Francesco v Barnum 125–6
Table of Cases xv
De La Bere v Pearson 83–4, 359

De Mattos v Gibson 403
Denny Mott & Dickson v Fraser & Co 341, 345
Derry v Peek 209–10, 288
Dickinson v Dodds 39, 61–2, 64
Diesen v Samson 366
Diners Club International (HK) Ltd v Ng Chi Sing and Ng Yan Kiang 264
Dixie Engineering Co Ltd v Vernaltex Co Ltd (t/a Wing Wo 101–2, 104–5
Engineering Co)
Donoghue v Stevenson 181, 188
Doyle v Olby Ironmonger Ltd 212
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd 377
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd 394–5
East v Maurer 213

Ecay v Godfrey 148
Edgington v Fitzmaurice 201
Edwards v Skyways Ltd 115, 117
Entores v Miles Far East Corporation 53, 55–6
Errington v Errington & Woods 62–3
Esquire Electronics Ltd v Hong Kong and Shanghai Banking 19, 261, 266–7
Corp Ltd
Esso Petroleum Co Ltd v Customs & Excise Commissioners 82–3
Esso Petroleum v Harper’s Garage (Stourport) Ltd 317–8
Esso Petroleum Co v Mardon 152, 210
Estinah v Golden Hand Indonesian Employment Agency 257
Eugenia, The 346
Eurymedon, The see New Zealand Shipping v Satterthwaite
Evans, J & Son (Portsmouth) v Andrea Merzario Ltd 151
Everet v Williams 293
Experience Hendrix LLC v PPX Enterprises Inc 370–1
Faccenda Chicken v Fowler 311

Farley v Skinner 368
Federal Commerce and Navigation Co Ltd v Molena Alpha Inc 334–5
Feldarol Foundry plc v Hermes Leasing (London) Ltd 187
Felthouse v Bindley 53–4
Fercometal SARL v Mediterranean Shipping Co SA, The Simona 337
Ferguson v Davies 98, 325–6
Fibrosa Spolka Akcyjna v Fairburn, Lawson, Combe, Barbour Ltd 351
Finlay (James) & Co Ltd v NV Kwik Hoo Tung Handel Maatschappij 380
First National Bank v Walker 278
Fisher v Bell 42
xvi Table of Cases
Fitch v Snedaker 60
Fleet v Murton 154
Fletcher v Krell 194
Flint v Brandon 384
Foakes v Beer 96–8, 101, 105–6, 325
Foley v Classique Coaches Ltd 65–6
Forest International Gaskets Ltd. V Fosters Marketing Ltd 215
Forsikringsaktieselskapet Vesta v Butcher 382
Franco v Bolton 294–5
Frost v Knight 335–6
GSL Engineering Ltd v Yau Hon Yin Sammon & ors 310–11
Gallie v Lee (Saunders v Anglia BS) 244–5
Galloway v Galloway 228
Gamerco SA v ICM / Fair Warning (Agency) Ltd 352
Gee Tai Trading Co Ltd v Sun Wah Oil & Cereal Ltd 67
Geir v Kujawa, Weston and Warner Bros (Transport) Ltd 171
Gibbons v Proctor 60
Gibson v Manchester City Council 4, 38, 41–2
Gibson v Proctor 60
Gilbert v Ruddeard 77
Giles (C.H.) & Co v Morris 387–8
Glasbrook Bros Ltd v Glamorgan County Council 86
Golden Strait Corporation v Nipon Kubishka Kaisha 339, 384
Goldsoll v Goldman 320
Gonin, Re 141
Goodman Corporation v Mataichi Kabushiki Kaisha 69
Gordon v Selico Co Ltd 193, 201
Government of Zanzibar v British Aerospace (Lancaster House) Ltd 217
Grainger v Gough 45
Gran Gelato Ltd v Richcliff (Group) Ltd and Others 217
Gray v Southouse 301
Great Peace Shipping Ltd v Tsavliris (International) Ltd 222, 225, 229–233
Green Park Properties Ltd v Dorku Ltd 184
Grifth v Brymer 228
Grist v Bailey 230
HKSAR v Ma Wai Kwan David and Others 28

Hadley v Baxendale 92, 357, 360, 362–3
Haigh v Brooks 83
Halpern v Halpern 230, 279
Hamer v Sidway 78
Hamilton Jones v David & Snape 366
Table of Cases xvii
Hang Seng Credit Card Ltd v Tsang Nga Lee 286–7

Hardwick (Ronald Claud) & Another v Spence Robinson 367–8
Harlingdon & Leinster Enterprises Ltd v Hull Fine Art Ltd 159
Harris v Shefeld United Football Club Ltd 86
Harris v Watson 89
Hartley v Ponsonby 88–9
Hartog v Colin and Shields 236
Harvela Investments Ltd v Royal Trust Co of Canada Ltd 46
Harvey v Facey 40–1
Haywood v Brunswick PBBS 402
Health Link Investment Ltd v Pacic Hawk 332
Heathcote Ball v Barry 43
Hedley Byrne & Co Ltd v Heller & Partners Ltd 203, 208, 210–11, 218
Heilbut Symons v Buckleton 150, 152
Hellmuth Obata & Kassabaum Inc v King 118
Her Majesty’s Attorney-General v Blake 370, 375
Hermann v Charlesworth 294
Herne Bay Steam Boat Co v Hutton 344
Heron II, The see Koufos v C Czarnikow Ltd
Heywood v Wellers (A Firm) 366–7
Hick v Raymond & Reid 332
Hill v C.A. Parsons Ltd 390
Hillas & Co Ltd v Arcos Ltd 17, 65–6
Hirachand Punamchand v Temple 98
Hirji Murji v Cheong Yue SS Co 350
Ho Wing Cheong and ors v Graham Margot and anor 312–3
Hochster v De La Tour 335–6
Hoenig v Isaacs 328
Hoffberger v Ascot Bloodstock Group 380
Hollier v Rambler Motors (AMC) Ltd 173–4
Holwell Securities v Hughes 58
Hong Chi Mui v Tong Ching Company 301
Hong Kong Advanced Knitwear Company v Chan Chak-man 68
Hong Kong Aircrew Ofcers Association v Cathay Pacic Airways Ltd 112, 117
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd 164–8, 333
Horsfall v Thomas 201
Horton v Horton (No 2) 85
Houghton v Trafalgar Insurance Co Ltd 174
Hounslow LBC v Twickenham Garden Developments Ltd 340, 382
Household Fire Insurance Co v Grant 58
Howard Marine & Dredging Co Ltd v Ogden & Sons (Excavations) Ltd 211, 219
Hughes, Thomas v Metropolitan Railway 97, 99–102, 105–6
Hulton v Hulton 206
xviii Table of Cases
Hurst Stores and Interiors v M l Europe Property 243

Hutton v Warren 154
Hyundai Engineering & Construction Co Ltd v Vigour Ltd 70–1
Hyde v Wrench 49–50, 61
ING Bank NV v Tsui Tsin Tong 256

Ingram v Little 237–8, 240–1
Interfoto Pictures Library Ltd v Stiletto Visual Programmes Ltd 172
International Trading Co Ltd v Lai Kam Man & others 383
Irvine, Re 64
Jackson & another v Royal Bank of Scotland plc 361

Jackson v Horizon Holidays Ltd 399–401
Jackson v Union Marine Insurance Co Ltd 345
Jan Albert (HK) Ltd v Shu Kong Garment Factory Ltd 232
Jarvis v Swan Tours Ltd 366–7
Jennings v Rundall 129
Johnson v Agnew 338
Johnson v Unysis Ltd 368
Johnson, Stokes & Master v Trevor Ernest Boucher 298
Jones v Padavatton 5, 111, 114
Jones v Vernon Pools Ltd 115–6
Jorden v Money 100, 107
Joscelyne v Nissen 242
Kao Lee & Yip v Edwards 314–5, 318–9, 321

Karsales (Harrow) Ltd v Wallis 177
Kensland Realty Ltd v Whale View Investment Ltd 158
Kepong Prospecting Ltd v Schmidt 404
Khatun & others v Newham LBC 189, 286
Ki Hing Lau v The Shun Loong Lee Firm 294
Kin Wah JF Construction & Engineering Co Ltd v L& M Foundation 25
Specialist Ltd
Kingswood Estate Co ltd v Anderson 141
Kiriri Cotton Co Ltd v Dewani 301
Kleinwort Benson Ltd v Lincoln City Council 32–3, 199–200, 230
Kleinwort Benson Ltd v Malaysian Corp Bhd 118
Kores Manufacturing Co Ltd v Kolok Manufacturing Co Ltd 315
Koufos v C Czarnikow Ltd. (The Heron II) 362–3
Krell v Henry 342–4, 346
Kwan Siu Man v Yaacov Ozer 64–5, 138
Table of Cases xix
Lagden v O’Connor 359

Lambert v Co-Operative Insurance Society Ltd 196
Lambert v Lewis 200
Lampleigh v Braithwait 80
Lansing Linde Ltd v Kerr 311
Laurence v Lexcourt Holdings 230
Lauritzen, J AS v Wijsmuller BV (the ‘Super Servant Two”) 347–8
Lazenby Garages Ltd v Wright 380
Leaf v International Galleries 205–6, 229, 391
Leslie, R Ltd v Sheill 129–30
L’Estrange v Graucob 169–70, 222
Lewis v Averay 206, 237–8, 241
Li Ching Wing v Xuan Yi Xiong 349–50
Li Sau Ying v Bank of China (HK) Ltd 251, 267, 270–1
Liesboch Dredger v SS Edison (The Liesboch) 359
Liu Chong Hing Bank Ltd v Ocean Importers & Exporters Co Ltd and others 256
Liverpool City Council v Irwin 10, 155–7
Lloyds v Harper 401
Lloyd’s Bank v Bundy 266, 283, 289
Lo Wo and Others v Cheung Chan Joseph and Another 13–4, 289–90
Lobb, Alec (Garages) Ltd v Total Oil (Great Britain) Ltd 318
Lobley Co Ltd v Tsang Yuk Kiu 46
Lombard North Central plc v Butterworth 163, 332
London County Council v Allen 402
Long v Lloyd 205
Long, Edward & Co Ltd v Polytex Cotton Goods Traders Ltd 325
Lord Strathcona Steamship Co v Dominion Coal Co Ltd 403
Luen Yick Co v Tang Man Kee Machinery Workshop 376–7
Luxor (Eastbourne) Ltd v Cooper 63
Lynch v DPP for N Ireland 261
Lynch v Thorne 156
McArdle, Re 79–80
McCutcheon v David MacBrayne Ltd 173
McRae c Commonwealth Disposals Commission 223, 226–7, 374
Maddison v Alderson 140
Magee v Pennine Insurance Co Ltd 230
Mahmoud and Ispahani, Re 298
Mahoney v Purnell 280–1
Malik v BCCI 157, 359, 369
Mahmud v BCCI SA (in liquidation) 369
Manchester DC for Education v Commercial and General Investments Ltd 55
Mandarin Container & Others, Re 378
xx Table of Cases
Maritime National Fish Ltd v Ocean Trawlers 347–8

Marles v Philip Trant & Sons Ltd (No 2) 303–4
Massey v Midland Bank plc 275
May & Butcher v R 66
Mersey Steel & Iron Co. v Naylor Benzon & Co 334
Metropolitan Electric Supply Co v Ginder 388
Merritt v Merritt 112–3
Mihalis Angelos, The 167
Ming Shiu Ching & others v Ming Shiu Sum and others 169
Mohamed v Alaga & Co 302
Moorcock, The 154
Morris v Baron & Co 325
Mosvolds Rederi v Food Corp of India 155
Murray v Leisureplay plc 378–9
Nanyang Credit Card Co Ltd v Ying Wei (Hop Hick) Cargo Service 175
Napier v National Business Agency 306–7
Nash v Inman 123–4, 349
National Carriers v Panalpina 342, 349
National Commercial Bank (Jamaica) v Hew 272, 276, 280
National Westminster Bank plc v Morgan 288
Naughton v O’Callaghan 211
Nema, The see Pioneer Shipping Ltd case
New Zealand Shipping Co Ltd v Satterthwaite & Co Ltd (the Eurymedon) 95, 179
Nicolene Ltd v Simmonds 67
Nordenfelt v Maxim Nordenfelt 309, 316, 319
North Ocean Shipping v Hyundai (The Atlantic Baron) 254
Notts Patent Brick & Tile Co v Butler 194–5
OTB International Credit Card Ltd v Au Sai Chak, Michael 289

Okachi (Hong Kong) Co Ltd v Nominee (Holding) Ltd 167
Olley v Marlborough Court Ltd 70–1
On Park Parking Ltd v SOJ 156
Oscar Chess v Williams 146–9
O’Sullivan v Management Agency and Music Ltd 280
Page One Records Ltd v Britton & others 389–90

Pan Atlantic Co Ltd v Pine Top Insurance Co Ltd 196
Pankhania v Hackney LBC 199–200
Pao On v Lau Yiu Long 80, 90, 94, 254–5, 257–8
Paradine v Jane 18, 341
Parker v Clark 114
Parker v South Eastern Railway 169
Table of Cases xxi
Parker v Taswell 136

Parkinson v College of Ambulance Ltd 293, 298
Parsons H.(Livestock) Ltd v Uttley, Ingham & Co Ltd 363–4
Partridge v Crittenden 44–5
Payne v Cave 43, 61
Pearce v Brooks 294
Pearson, S & Son Ltd v Dublin Corporation 201
Pepsi-Cola International Ltd v Charles Lee 213–5, 217
Perry v Sidney Phillips & Son 368
Peters v Fleming 119
Petrotrade Inc v Texaco Ltd 173
Pharmaceutical Society of Great Britain v Boots Cash Chemists 42
Philips Hong Kong Ltd v The Attorney-General of Hong Kong 378–9
Phillips v Brooks 238
Phillips Products Ltd v Hyland 182–3
Photo Production Ltd v Securicor Transport Ltd 177–8
Pickfords Ltd v Celestica Ltd 31–2
Pinnel’s Case 95–6, 105, 323, 325
Pioneer Shipping Ltd v BTP Tioxide Ltd (the “Nema”) 345
Pitt v P.H.H. Asset Management Ltd 71, 87
Planche v Colburn 328
Polaroid Far East Ltd v Bel Trade Co Ltd and others 212
Posner v Scott-Lewis 387
Postlethwaite v Freeland 332
Powell v Lee 52
Pym v Campbell 151
R v Andrews 293
R v Clarke 59–60
R v Her Majesty’s Attorney-General for England and Wales 258–60, 272
(Bravo Two Zero)
R & B Customs Brokers Ltd v United Dominion Trust Ltd 187
Radford v De Froberville 372
Rafes v Wilchelhaus 234–5
Ramsgate Victoria Hotel Co v Monteore 63
Rawlinson v Ames 141
Redgrave v Hurd 202
Reigate v Union Manufacturing Co 155
Reynolds v Atherton 64
Rhone v Stephens 402
Rice (t/a Garden Guardian) v Great Yarmouth BC 163
Richardson Greenshields of Canada (Pacic) Ltd v Keung Chak Kin 296
Rigby v Connol 387
xxii Table of Cases
Ritchie v Atkinson 328

Roberts & Co Ltd v Leicestershire CC 3, 242–3
Roberts v Gray 125
Roberts v Havelock 328
Rose and Frank v Crompton 116–7
Rose (Frederick E.) (London) Ltd v Pim Junior (William H.) & Co Ltd 230, 242
Ross v Caunters 211
Routledge v Grant 61–2
Routledge v Mc Kay 147–8, 150
Royal Bank of Scotland v Etridge (No 2) 34, 251, 263–5, 267–71, 273, 275–9
Royscot Trust Ltd v Rogerson and another 214–5, 217
Ruxley Electronics Ltd v Forsyth 371–3
Ryan v Mutual Tontine Westminster Chambers Association 387
Safehaven Investments Inc v Springbok Ltd 338

Saunders v Anglia Building Society 244–5
Scally v Southern Health and Social Services Board 158
Scammell v Ouston 66–7
Schawel v Reade 148
Schroeder, A Music Publishing Co Ltd v Macaulay 315–6
Schuler AG v Wickman Machine Tools Ltd 15, 162–3, 331–2
Scorer v Seymour-Johns 321
Scotson v Pegg 95
Scruttons Ltd v Midland Silicones Ltd 179
Selectmove, Re 97, 104, 107, 325
Shadwell v Shadwell 76–7, 81, 84, 95
Shanghai Tonhji Science & Technology Industrial Co Ltd v Casil Clearing Ltd 241
Shanklin Pier Ltd v Detel Products Ltd 152
Sharp(GF) & Co Ltd v Mc Millan 350
Shirlaw v Southern Foundries Ltd 155
Shogun Finance Ltd v Hudson 222, 238–41
Shuey v US 62
Shum Kit Ching v Caesar Beauty Centre Ltd 379
Shun Shing Investment Ltd v AG 156
Siboen, The and the Sibotre 253–4
Simona, The see Fercometal SARL case
Simpkins v Pays 113–4
Sindall (William) plc v Cambridgeshire County Council 216, 223
Singh v Ali 303
Sky Petroleum Ltd v VIP Petroleum Ltd 386
Smith v Eric Bush 163, 191, 203, 211
Smith v Hughes 3, 39, 235
Smith v Land and House Property Corporation 197–8
Table of Cases xxiii
Smith v Wilson 151, 154

Smith New Court Securities Ltd v Scrimgeour Vickers 210, 215
(Asset Management) Ltd
Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board 396
Solle v Butcher 229–232
South Caribbean Trading Ltd v Tragura Beeher BV 90, 94
Spencer v Harding 46
Spice Girls Ltd v Aprilia World Service BV 193
Spring v National Amalgamated Stevedores and Dockers Society 155
Spurling v Bradshaw 172
St Albans City & District Council v International Computers 186
St John Shipping Corp v Joseph Rank Ltd 305
Starsin, The 243
Startup v Macdonald 329
Steadman v Steadman 140–1
Steinberg v Scala (Leeds) Ltd 127–8
Stevenson v Mc Lean 50
Stevenson v Rogers 187
Stickney v Keble 385
Stilk v Myrick 88–92, 262
Stocks v Wilson 130
Storer v Manchester City Council 41–2
Strongman (1945) Ltd v Sincock 304
Sudbrook Trading Estate Ltd v Eggleton 67–8
Suisse Atlantique Societe d’Armement Maritime SA v Rotterdamsche 177
Kolen Centrale NV
Sumpter v Hedges 327
Sung Hung Kai Credit Ltd v Szeto Yuk-Mei and others 245
Super Servant Two, The see Lauritzen, J AS
Surrey County Council v Bredero Homes 370
Susanto Wing Sun Co Ltd v Yung Chi Hardware Machinery Co Ltd 56
Swiss Bank Corporation v Lloyds Bank Ltd 403–4
TSB Bank plc v Cameld 279

Tam Lup Wai Franky v Vong Shi Ming Nicolas 261, 264
Tamplin v James 3, 234–5
Taylor v Caldwell 341–3, 348
Tenax SS Co Ltd v Reinante Transoceania Navegacion SA see Brimnes, The
Thomas v Brown 141
Thomas v Thomas 81–2
Thompson v London, Midland and Scottish Railway 169–70
Thompson v T Lohan (Plant Hire) Ltd 182–3
Thompson (W.L.) Ltd v Robinson (Gunmakers) Ltd 380
xxiv Table of Cases
Thomson v Christie Manson & Woods Ltd & others 211

Thomson v Thomson 298
Thorne v Motor Trade Association 261
Thornton v Shoe Lane Parking Ltd 171
Thorpe v Thorpe 365
Tilden Rent-a-Car Co v Clendenning 169
Timmins v Moreland Street Property Co Ltd 138
Tinn v Hoffman 55, 60
Tinsley v Milligan 299–300, 302–3, 305, 308
Tony Investments Ltd v Fung Sun Kwan 234
Tool Metal Manufacvturing Co Ltd v Tungsten Electric Co Ltd 105–6
Traill v Baring 199
Trentham (G Percy) Ltd v Archital Luxfer Ltd 39
Tribe v Tribe 306
Tulk v Moxhay 402
Tung Wing Steel Co Ltd v George Wimpey International Ltd 256
Turner v Green 12
Tweddle v Atkinson 80, 394–7
Twinkle Step Investment Ltd v Smart Int’l Industrial Ltd 158
U.B.C (Construction) Ltd v Sung Foo Kee Ltd 17, 92–3

Union Eagle Ltd v Golden Achievement 331–2
United Dominions Trust Ltd v Western 245
United Insurance Company Ltd, The v Chan Park Sang and Others 195–6
Universe Tankships Inc of Monrovia v International Transport Workers 255–6, 261
Federation (The Universe Sentinel)
Vastfame Camera Ltd v Birkart Globistics Ltd et al 176

Vaswani v Italian Motors (Sales & Services) Ltd 335
Vesta, F v Butcher 382
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd 361–2, 364, 371
Vigers v Cook 326
Vita Food Products v Unus Shipping Co Ltd 305
Vitol SA v Norelf Ltd (the “Santa Clara”) 331
WWF-World Wide Fund for Nature v World Wrestling Federation 370
Entertainment Inc
Wales v Wadham 199
Walford and Others v Miles and Another 12, 70–1
Wallis, Son & Wells v Pratt and Haynes 161
Ward v Byham 86
Warlow v Harrison 43
Warner Bros Pictures Inc v Nelson 388–9
Warren v Mendy 389
Table of Cases xxv
Weeks v Tybald 117, 200

Whelan Re 64
White & Carter (Councils) Ltd v McGregor 339–40, 381–2
Whittington v Seale-Hayne 192, 207–8
Williams v Bayley 262–4
Williams v Carwardine 59
Williams v Roffey Brothers and Nicholls (Contractors) Ltd 17, 88–90, 256, 261–2, 378
Williams v Williams 84, 86–7
Wimpey(George) UK Ltd v V.I.Components 243
With v O’Flanagan 194, 199
Witter (Thomas) Ltd v TBP Industries Ltd 217
Wong Lai –ying & others v Chinachem Co Ltd 345
Wong Ng Kai Fung Patsy v Yau Lai Chu 160
Wong Wui v Yin Shiu Peter 337–8
Wood (Harold) Brick Co v Ferris 332
Woodar Investment Development Ltd v Wimpey Construction 334–5, 399–401
(UK) Ltd
Woodhouse A.C. Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd 102
World Fair, The Ltd and another v Hong Kong Island Development Ltd 69–70
Wroth v Tyler 362, 364, 383
Wrotham Park Estate Co Ltd v Parkside Homes Ltd 369–70
Wu Ciu-kuen v Chu Shui-ching 114
Yates Building Co Ltd v Pulleyn & Sons (York) Ltd 54–5

Yau Yeong Wood and Another v The Standard Oil Co of New York 24
Yim Wai-tsang v Lee Yuk-har 298
Yip Alice v Wong Shun (No 2) 305
Yiu Yau Ping v Fong Yee Lan 49
Young v Bristol Aeroplane Co Ltd 231
Young v Thames Properties Ltd 329
Table of Legislation
HONG KONG
Age of Majority (Related Provisions) Ordinance (Cap 410)

s2 122, 417
s3 124, 417
s4 120, 130–1
Application of English Law Ordinance (Cap 88) 31
s3 22, 24
Schedule 23
Apportionment Ordinance (Cap 18)
s3 22, 24
Schedule 23
Apprenticeship Ordinance (Cap 47) 143
Arbitration Ordinance (Cap 341) 293
Banking Ordinance (Cap 155) 141
Basic Law of the Hong Kong SAR (Cap 2101) 13, 21, 24–27, 31, 33–4
A1 27
A5 26
A7 27
A8 21, 26–8, 384
A17 27
A18 26
A84 21, 31
A160 26
Betting Duty Ordinance (Cap 108) 296
s3(7) 296
s3(8) 296
Bills of Exchange Ordinance (Cap 19) 409
s3(1) 137
s89(1) 137
Bills of Lading and Analogous Shipping Documents Ordinance (Cap 440) 409
xxviii Table of Legislation
Bills of Sale Ordinance (Cap 20) 142

s2 142
s7 142
s15 142
Schedule 142
Carriage by Air Ordinance (Cap 500) 409
Civil Liability (Contribution) Ordinance (Cap 377)
Coinage Ordinance (Cap 454) 329
Commodities Trading Ordinance (Cap 250)
s26(2) 301
s28 301
Companies Ordinance (Cap 32)
s23 38, 409
Contracts for Employment Outside Hong Kong Ordinance
(Cap 78) 143
Control of Exemption Clauses Ordinance (Cap 71)10, 12, 23, 25, 146, 178, 180–1, 196
218–9, 285
s2 181
s2(3) 182
s3 176, 184, 186, 218
s3(1) 184–5
s3(2) 184
s3(3) 184
s3(4) 184–5
s3(5) 184–5
s3(6) 184–5
s4 190
s4(1) 190
s5 183, 189
s7 181–3, 189
s7(1) 182
s7(2) 182–3, 408
s8 181, 185–6, 189
s9 181, 189
s10 181, 188
s11 181, 184, 187–8
s11(3) 185
s12 181, 184, 186–8
s12(3) 185
Schedule 1 189
Schedule 2 184–5, 188
Table of Legislation xxix
Conveyancing and Property Ordinance (Cap 219)

s2 135, 137
s3 41, 138–40
s3(2) 140
s4(1) 133, 135
s4(2) 135
s5 139
s6 139
s7 139
s19 136
s19(1) 135
s20 136
s23 136
s23A 136
s26 398
s40 402
Disability Discrimination Ordinance (Cap 480) 43
Electronic Transactions Ordinance (Cap 553)
s19 57
Employees Compensation Ordinance (Cap 282)
s5 410
Employment Ordinance (Cap 57)
s57 257
Gambling Ordinance (Cap 148) 292, 295–6
s2 295–6
s3 295
s7 296
s8 296
Hong Kong Bill of Rights Ordinance (Cap 383) 27
s8 Article 1 27
s8 Article 7 27
Hong Kong Reunication Ordinance (Cap 2601) 28
Law Amendment and Reform (Consolidation) Ordinance (Cap 23) 247, 324, 351
s11 332
s13A 140
s16 231, 324, 351, 355
s16(2) 351–2
s16(3) 351–3
s16(5) 354
s17 231, 351, 354–5
s17(5) 354
s18 231, 351, 355
xxx Table of Legislation
s21 382
s26 135
Legal Tender Notes Issue Ordinance (Cap 65) 329
Limitation Ordinance (Cap 347)
s4(1) 390–1
s26(1) 390
s27 390
s31 390
Marine Insurance Ordinance (Cap 329) 142
s22 142
s95 142
s96 142
s97 `142
Married Persons Status Ordinance (Cap 182) 398
Mental Health Ordinance (Cap 136)
s11 121
s12 121
s13 121
Misrepresentation Ordinance (Cap 284) 23, 184, 191–2, 208, 210
s2 205
s3(1) 197, 211, 213–5, 217, 246
s3(2) 205, 207, 215–7
s4 184, 193, 218–9
Mock Auctions Ordinance (Cap 255) 44
Money Lenders Ordinance (Cap 163) 141, 287
s18 141–2
s18(1) 141
s18(2) 142
s18(3) 142
s25 287
Occupiers Liability Ordinance (Cap 314) 181
Power of Attorney Ordinance (Cap 31) 133
s3 135
s4(2) 135
Prevention of Bribery Ordinance (Cap 201) 293
Rules of the High Court (Cap 4A) O22 329
Sale of Goods Ordinance (Cap 26) 30, 145, 158
s2(1) 159
s2(5) 159
s4(2) 30, 123, 142
s8 226
s10 68–9
s12(1) 163–4
Table of Legislation xxxi
s13(2) 163
s14 158–9, 187, 188.
s15 158–9, 187, 188
s16 158–60, 187, 188
s16(2) 159–60
s16(3) 159–60
s17 158, 160, 187
s25 204
s32 327–8
s52 379–80, 383
s53 379–80, 383
s54 385
s55 161
s60(2) 43
Sale of Land by Auction Ordinance (Cap 27) 44
Sex Discrimination Ordinance (Cap 487) 43
Societies Ordinance (Cap 151) 298
Supply of Services (Implied Terms) Ordinance (Cap 457) 160, 189
s3(1) 189
s3(2) 190
s4 190
s5 160, 190
s6 160, 190
s7 69, 160, 190
s8(1) 190
Supreme Court Ordinance (No15 of 1844) 22
Theft Ordinance (Cap 210) 198
s17 198
s18 198
Trustee Ordinance (Cap 29) 30
Unconscionable Contracts Ordinance (Cap 458) 12, 23, 283–7
s1 285
s2 285
s3 285
s3(1) 285
s4 285
s5 285
s5(1) 285
s5(2) 285
s6 285.
s7 285
s8 285
xxxii Table of Legislation
ENGLAND
Contract (Rights of Third Parties) Act 1999 179, 395, 405

s7(4) 409
Copyright Act 1956 82
Employers’ Liability Act 1880 126
Family Law Reform Act 1969
s1 122
Hire Purchase Act 1964 239, 241
Honours (Prevention of Abuses) Act 1925 293
Infants’ Relief Act 1874 119, 121–2, 124, 128
Judicature Acts 1873–5 31, 384
Law of Property Act 1925
s56 398
s56(1) 398
s78 397
s79 402
s205 398
Law of Property (Miscellaneous Provisions) Act 1989 23
s1(1) 135
s2 138–9
Law Reform (Contributory Negligence) Act 1945 382
Law Reform (Frustrated Contracts) Act 1943 231, 247, 324, 351
s1(2) 352
s1(3) 353
Law Reform (Miscellaneous Provisions) Act 1970
s1 95
Minors Contracts Act 1987
S2 121
s3 120
s3(1) 131
Misrepresentation Act 1967 23, 191–3, 208, 211
s1 205
s2(1) 149, 208, 211, 214, 219, 246
s2(2) 205, 215–6
s3 193, 218
Pharmacy and Poisons Act 1933 42
Protection of Birds Act 1954 45
Restriction of Offensive Weapons Act 1959 42
Sale of Goods Act 1893 123
s2 123
s6 226–7
s8 66, 68
Table of Legislation xxxiii
Sale of Goods Act 1979 30, 159

s3 123
s6 219, 227
s8 68
s12 159
s13 159
s14 159, 187
s23 204
s52 386
s53 161
Statute of Frauds 1677 10, 54, 134, 136, 138–40
Supply of Goods and Services Act 1982 9, 189–90
Torts (Interference with Goods) Act 1977
s11(1) 240, 247
Trustee Act 1925 30
Unfair Contract Terms Act 1977 10, 23, 25, 146, 178, 180, 196–7, 218, 286
s2 176, 183
s2(2) 172, 183
s3 186
s8 218
s7 186
s11 186
s13 183
Unfair Terms in Consumer Contracts Regulations 1994 25, 283–4
Unfair Terms in Consumer Contracts Regulations 1999 180, 196–7, 286
Unsolicited Goods and Services Act 1971 53
1
The Nature of Contract Law
OVERVIEW
Contracts may take a huge variety of forms, from the simplest, small “one-off” transaction
like buying a newspaper, to a complicated commercial contract, written in technical
language and intended to be of lengthy duration. Nevertheless, the same basic rules as to
formation, performance and enforcement apply to all contracts.
The purpose of this chapter is to ask rst what contract law is and second what it
does. In keeping with the largely non-theoretical nature of this book and the constraints
of space, the answers to the above questions will be based on traditional notions of
contract and more radical formulations will be merely alluded to. This should not be
taken as a rejection of more radical views but an assertion that our objective is to reect
how contract law is generally viewed, by traditional judges, lawyers and legal writers.
In asking what contract law is, we may begin with the statement that contracts
are “legally enforceable agreements”. In dening contract, these two elements — an
agreement between the parties and some form of enforcement thereof — are crucial.
We might, perhaps, wish to add another requirement; the agreement should not have
been procured by improper means such as threats or dishonesty. We would also wish
to “qualify” the rst basic element, since agreement, especially where the parties are of
unequal bargaining power, is often more theoretical than real. I may make a contractual
“agreement” to travel on a bus every morning but if I dislike the “infotainment” provided
or the sub-zero air conditioning I am in a “take it or leave it” situation; unable to vary
the conditions of travel or to negotiate a reduced fare for travelling in discomfort. My
alternative is to walk or take a taxi!
The notion of “agreement” must also be qualied by saying that whether parties
have agreed is usually judged “objectively” rather than “subjectively”. This means that
what is actually in a party’s mind is usually irrelevant; what matters is that a “reasonable
person”, assessing the party’s words and deeds, should conclude that he has “agreed”.
Moreover, agreement, while a necessary requirement of contract, is not a sufcient
one; many agreements may lack contractual force because of other deciencies. A
particular feature of contract in common law systems, such as Hong Kong and England,
is the requirement of “consideration” which means, essentially, that no one may enforce
2 Contract Law in Hong Kong
an agreement unless he has given something of value to the other party to the agreement,
either in the form of a “benet” to that other party or a “detriment” to himself. Further,
an agreement may be non-contractual where it is viewed by the courts as a purely social
arrangement, never intended to be legally binding. Additionally, a party to an agreement
may be found to lack contractual “capacity” because of his youth or other disability; some
agreements, such as those concerning the transfer of land, may lack the necessary written
formality, and the threats or dishonesty mentioned above may constitute “vitiating”
elements sufcient to invalidate the agreement. Despite these additional requirements,
agreement remains the fundamental basis for contractual liability. Legal obligations may
exist in the absence of agreement but they will not be contractual ones.
The element of “enforceability” in contract law also requires qualication in so
far as it implies that parties may be required to honour their promises. In fact, actual
“enforcement”, by an order known as “specic performance”, is exceptional and the
normal result of the breach of a contractual undertaking by one party is that he is
required to pay monetary compensation (damages) to the “innocent” party. Nonetheless,
enforcement, in the sense of being entitled to seek legal redress for breach, is what
distinguishes contracts from other, non-binding, types of agreement. While parties may
seek to avoid litigation, especially where they have dealt with one another over a long
period, the importance of the right to seek compensation for breach “as a last resort” is
fundamental.
Having outlined what contract is, we then need to ask what it “does”. In traditional
terms, the law of contract, put most simply, allows people to make their own contracts
with minimal interference and then insists on performance. In theoretical language, these
are known as the principles of freedom and sanctity of contract. “Freedom of contract”
denotes that it is for the parties to make their own contracts without the intervention of
government, legislation or the courts. “Sanctity of contract” upholds the principle that
once agreements are made they should be honoured; where a contracting party does not
honour the agreement, the other party will be entitled to a legal remedy.
Freedom of contract has never been total, either in Hong Kong or England. It has
always been recognised, for example, that a contract to do something criminal would be
unenforceable. Restrictions on contractual freedom have now become so numerous that
many writers regard freedom of contract as of only historical importance. Sanctity of
contract, on the other hand, has remained largely intact. It remains the case that, unless
the performance of a contract becomes illegal or impossible, full performance, or at least
compensation for failure to perform, is required.
1.1 What Contract Is

A contract may be described as a “legally enforceable agreement”. That simple
statement summarises the rules on contract to be found in the decided cases and the
relevant legislation.1 The element of agreement is of crucial importance since, while
1. For more on the sources of Hong Kong contract law see chapter 2.
The Nature of Contract Law 3
not all agreements are contracts, all contracts require at least an apparent agreement.
Moreover, it is the element of agreement that distinguishes contracts from other forms of
obligation, notably tortious ones.
The need for “agreement”, however, must be qualied. First, it is clear that in many
cases agreement is more apparent than real. The idealised view of agreement involving
intense haggling, give and take and ultimate consensus is replaced, in many cases, by
something more akin to “take it or leave it”. The consumer who buys a new car, signs a
contract for electricity supply, or purchases private schooling, is unlikely to have any say
in the “form” of the contract. Even the argument that he can go elsewhere if he does not
like the terms imposed loses much of its force in those situations where, as in the case of
new car sales, “standard” terms are likely to apply wherever the car is purchased. It is in
such cases of inequality of bargaining power that legislative and judicial “interference”
with the contract is more likely.
It should also be pointed out that “agreement” is judged objectively, thus:
If, whatever a man’s real intention may be, he so conducts himself that a reasonable
man would believe that he was assenting to the terms proposed by the other party,
and that other party upon that belief enters into the contract with him, the man thus
conducting himself would be equally bound as if he had intended to agree to the other
party’s terms.2
So, if A genuinely and reasonably believes that B agrees to his terms, the necessary
“agreement” exists, irrespective of B’s subjective belief. Suppose, for example, that A
advertises an item on the internet and seeks bids. B offers to buy for $10,000 and A
immediately accepts. There is the objective appearance of agreement and a court would
generally ignore a subsequent claim by B that he was “mistaken” and meant to offer only
$1,000. A reasonable person looking at the agreement would say it was a contract to sell
for $10,000 and this would be the legal position. A simple case illustration is provided by
Centrovincial Estates plc v Merchant Investors Insurance Co. Ltd.3 Here the plaintiffs,
in renegotiating a lease, “offered” a rental of £65,000 per year, which the defendants
accepted. The plaintiffs pleaded that there was no contract as they had been “mistaken”.
The previous price was over £68,000 per year in a rising market and the plaintiffs said
that they “meant” to state a price of £126,000 per year. The court upheld the gure of
£65,000 since it had been clearly expressed in writing and accepted by the other party.
It would have been different, of course, if it could have been clearly shown that, in
the circumstances of the case, the defendants must have known that the plaintiffs were
making a mistake and took advantage of the situation.4 In the absence of conclusive
evidence of such bad faith, however, there was, “objectively”, an offer to let at £65,000
per year and an acceptance thereof.5
2. Per Blackburn J. in Smith v Hughes (1871) L.R. 6 Q.B. 597.

3. [1983] Com LR 158. See also Tamplin v James discussed at 10.3.
4. As in Roberts & Co. Ltd. v Leicestershire C.C. discussed at 10.5.
5. The decision has been criticised: see Atiyah P. (1986) 102 L.Q.R. 363.
Agreement is generally viewed as comprising two elements; an offer by one party

and an acceptance of that offer by the other.6 There are exceptional cases where contracts
have been upheld although agreement, at least in terms of offer and acceptance between
the so-called “parties”, is difcult to discern. In Clarke v Dunraven,7 the respondent’s
boat was sunk by the appellant’s boat, during a sailing race, as a result of the appellant’s
breach of the race rules. All parties in the race had agreed with the organisers to abide
by the rules and, in the event of non-compliance, to pay compensation for any resulting
damage. The House of Lords, in upholding the respondent’s claim, found that there was
a contract between appellant and respondent though neither had made an agreement with
the other.
Given the absence of a developed tort of negligence at the time this case was
decided, the only potential remedy available to the respondent lay in contract8 and the
decision may be viewed as one in which the court did justice by means of extreme
“creativity”.9 Certainly the parties were happy to agree to the terms of the race; but it
was surely articial to imply that the plaintiff and defendant had made an “agreement”
with each another. Without disapproving this case, the highest courts have upheld the
principle, in contemporary cases, that there should invariably be offer and acceptance as
between the parties.10
Nor is it always sufcient to focus on the existence of an agreement, since the
time at which the agreement is formed may also be highly signicant. Discussion of
this question usually focuses on narrow issues of when (or where) a contract made
by telephone, email or fax is concluded. While there may be signicant jurisdictional
implications in such cases, the “time of formation” involves far wider issues, since so
many of the courts’ deliberations are required to focus on the situation at the time at
which the contract was made. If, for example, one party wishes to rely on an exemption
clause11 in the contract, its existence must have been made known to the other party
before the contract was concluded. Moreover, where the “reasonableness” of the
exemption is signicant, this must be judged as at the time the contract was made. Where
a party wishes to escape liability to pay damages for misrepresentation,12 he must prove
a genuine and reasonable belief in the truth of his false statement up to the time when the
contract was made. It is not enough that his belief was genuine at the time his statement
was made. In those rare cases where common mistake13 is operative this will require a
mistake as to a fundamental state of affairs already existing at the time the contract was
made. If a subsequent event fundamentally alters the agreement, it cannot constitute
6. There must, it is said, be a meeting of minds or consensus ad idem.

7. [1897] A.C. 59.
8. The respondent was entitled to statutory compensation but this was very limited.
9. See 1.2.2.
10. See, for example, Gibson v Manchester C.C discussed at 3.2.
11. See 8.5.
12. See chapter 9.
13. See 10.2.2.
mistake (though it could amount to a “frustration”). The doctrine of frustration itself,14

which arises where an event occurs after a contract is formed (but before the time for
performance) which makes performance impossible, may not be successfully invoked
by a party who should have foreseen, at the time the contract was made, the subsequent
serious event. In the case of damages,15 too, the time when the contract was made may be
crucial, since the “reasonableness”, and hence enforceability, of the pre-estimate of loss
in a so-called “liquidated damages” clause is judged as at the time the contract was made,
not in light of what actually happened as the result of one party’s breach. Moreover, a
party in breach will only be liable in damages for consequences which should have been
foreseen as likely to result from the breach at the time the contract was made.
In summary, the circumstances existing when the parties agree a contract now, may
have profound consequences for the contract later.
While agreement is always necessary, it is not sufcient, in itself, to prove the
existence of a contract. Given a clear agreement between the parties, other requirements
remain to be fullled.
For hundreds of years in England, and throughout Hong Kong’s common law
history, the further requirement of “consideration”16 is demanded in all cases of contracts
made other than under seal. Thus,
. . . the growth of the doctrine of consideration as a limitation on what promises will

be enforced seems to have been prompted by the adoption in the sixteenth century of a
new form of action, the action of assumpsit, to enforce promises. Before that, promises
were actionable in the royal courts only if they were part of one of a recognised type
of exchange such as a sale, or were made (under seal). . . 17
The consideration requirement has proved an extremely elastic one and most of the
“rules” of consideration are subject to exception, as we shall see in chapter 4. Where the
courts have wanted to enforce an agreement they have normally been able to discover
consideration. In short, the requirement of consideration remains but is capable of
considerable “adaptation” by the courts where appropriate.
It is also now generally accepted that a contract requires an intention18 to be bound
by both parties. While this proposition is a relatively new one and is not without its
critics (notably Samuel Williston), the cases indicate that intention must be viewed as
a separate, essential element for the formation of a contract, albeit that intention, like
agreement, must be judged “objectively”.19
14. See 14.4.

15. See 15.1.
16. See chapter 4.
17. Beale, Bishop and Furmston Contract Cases and Materials 5th ed. p. 8.
18. See chapter 5.
19. See,for example, Jones v Padavatton [1969] 1 W.L.R.328; [1969] 2 All E.R. 616.
The agreement on which a contract is made is also subject to the rules of contractual
capacity20 and, exceptionally, to any special requirements as to form.21 Further, even
where a contractual agreement contains all the necessary requirements for its formation
there may be some “vitiating” element, such as misrepresentation or mistake, which
precludes, in whole or in part, the enforcement of the agreement.22
It is “enforceability” which distinguishes contracts from other forms of agreement.
Enforceability does not mean that a party in breach can be compelled to perform his
contractual undertaking; such a requirement (“specic performance”) by the courts is
the exception rather than the rule. What an “innocent” party may always do, however,
is obtain compensation for the consequences of the other’s breach. Where such breach
has caused no loss, the law will award nominal damages in recognition of the breach.
Traditionally, via the principle of “sanctity”, courts have always enforced contracts
whatever the circumstances of the failure to perform. The word “sanctity” implies a
moral element, that parties ought to keep their side of the bargain because they have
formally promised to do so. Such a moral aspect is now generally rejected in favour of
more pragmatic approaches. It would now be more common to view the enforcement
of agreements as producing certainty in the market place, or preventing parties taking
the law into their own hands. Economic approaches talk in terms of whether it is more
“efcient” to perform rather than pay compensation for non-performance and the moral
aspect of keeping a promise is rarely expressed. Nevertheless, even with the innovation of
“frustration”, a limited exception to sanctity introduced in the nineteenth century, courts
remain reluctant to excuse non-performance. A nding of frustration is exceptional23 and
a party who fails fully to complete his side of the contract is invariably liable to be sued
for breach.
1.1.1 The Boundaries of Contract Law
Before considering the function, or purpose, of contract law we will rst try to outline
what areas a typical contract law text, such as this, will deal with. It might be thought
that “Contract Law” would include study of all types of contract but this is far from the
case. Some areas, especially where they are highly specialised or statute-based, are dealt
with as separate subjects in their own right. Contracts of employment, for example, are
treated, generally, within the scope of “Employment Law”. This has much to do with
the fact that legislative rules are far more important in this area than common law24
20. See chapter 6.

21. See chapter 7.
22. See chapters 9–12.
23. See, for example, Davis Contractors Ltd. v Fareham UDC [1956] A.C. 696; [1956] 3 W.L.R. 37;
[1956] 2 All E.R. 145.
24. While “common law” has various meanings (see chapter 2) in this context it refers to those rules
deriving from cases rather than legislation.
contractual principles. When considering the employee’s contract of employment, for

example, we say that the contract may improve the employee’s guaranteed statutory
rights but cannot diminish them, irrespective of its express terms. Such a limitation on
the parties’ “freedom” applies both in England and Hong Kong, though it should be
appreciated that the protection of employees’ “rights” is far less developed in Hong Kong.
Specialised treatment of “sale of goods” contracts tends to be dealt with in “Commercial
Law”, again because the subject is highly statute-based. As a nal example detailed
treatment of sales of land are more likely to be dealt with in a “Land Law” or “Real
Property Law” course; once again the relevant rules are primarily statutory (legislative)
rather than common law.
The huge diversity of contract-types has led some commentators to say we should
talk of a law of “contracts” rather than contract just as, in respect of non-contractual
obligations, writers talk of a law of “torts” rather than tort, on the basis that there are few
principles common to all torts. The analogy is questionable, however, because, while we
can see that there is little similarity between, for example, the torts of negligence and
defamation, there are rules common to all contracts. Sale of goods may, for example,
be a specialised area but the more specic rules will not begin to operate unless the
basic contractual elements (agreement, consideration and so on) exist. The concept that
there are basic contract rules applicable to all contractual situations was emphasised in
the case of Cehave v Bremer (The Hansa Nord)25 where Roskill LJ responded to the
argument that there should be a different classication of terms in sale of goods contracts
by stating:
Sale of goods is but one branch of the general law of contract. It is desirable that the
same legal principles should apply to the law of contract as a whole and that different
legal principles should not apply to different branches of that law.
This view lends support to the view that judges should recognise some generally
applicable contractual principles. These may be amended, or dispensed with, by
legislation but, absent legislation, these general contractual principles will apply.
In short, the focus of this book will be on the general principles applicable in the
law of contract. The order of topics will be:
• the necessary elements for the formation of a contract (chapters 3–7);
• the contents, or terms, of a contract (chapter 8);
• “vitiating” elements which make the agreement defective in some way (chapters
9–13);
• how contracts come to an end (termination) (chapter 14); and
• remedies for breach of contract (chapter 15).
The nal chapter (chapter 16) is about “privity” of contract, the basis of which is
that only parties to the contractual agreement have rights and obligations under it. Since
“agreement” is our starting point, privity can be seen as completing the circle.
25. [1976] Q.B. 44; [1975] 3 W.L.R. 447; [1975] 3 All E.R. 739.
It may seem odd that, although we do not cover all types of contract in depth,
we do nd time to consider some overlapping areas of tort law. The law of tort deals
with obligations which arise other than through agreement. It is relevant to the study of
misrepresentation since, while misrepresentations “induce” the making of a contract,
damages for misrepresentation are tortious. Consideration of these damages is within
the scope of this book, because to deal with the meaning of misrepresentation but not
its consequences would be articial. Similar overlaps will be apparent when we deal
with attempts to exclude liability in contract and tort and when we look at the difference
between the “remoteness” rules in contract and tort. No detailed tort knowledge will be
required, however, to understand this text.
The contract law we will examine in this book is built, primarily, on two foundations:
the cases, or “precedents”, which form its overall framework, and the legislation which
has supplemented this case law, or “common law” as it is also known. Since Hong Kong
law, post-1997, comprises a unique blend of English common law and legislation, Hong
Kong common law and legislation and, to lesser extent, Chinese customary law, we
have devoted chapter 2 to the sometimes complex issue of the “sources” of Hong Kong
contract law.
1.2 The Function of Contract Law
Some writers draw a distinction between the role of the contract and the role of contract
law. The former may often be expressed in quite limited terms, such as “informing” the
parties of their respective rights and obligations and assisting their “planning”. The focus
here will be on the function of contract law; asking what it does and, by implication what
would happen if we had no law of contract.
Until comparatively recently the predominant theory of contract could be described
as the “will theory” — that the role of the courts was to identify and enforce the contractual
will of the parties and to intervene as little as possible in respect of bargains freely
made by competent adults. The emphasis has been on contractual “freedom”. Freedom
of contract remains a dominant principle in the United States where state intervention in
the free market is condemned.
More recently, in England and, to a lesser extent, Hong Kong, it has been
possible to identify a more “interventionist” approach by legislation and the courts.
Such intervention has been broadly “protectionist” — seeking to support the weaker
contracting party from the “dominance” of the other, stronger party. This approach can
be discerned, legislatively, in the area of employees’ rights, consumer protection and
anti-discrimination laws. Judicial intervention can be seen in the increasingly restrictive
approach to exemption clauses26 and the expansion of the doctrines of “duress” and
“undue inuence”.27 Interventionism is based on the premise that complete freedom of
26. See 8.5.

27. See chapter 11.
contract tends to favour those who have more negotiating power because of their greater
resources, contractual experience, access to legal advice and so on.
It is the “balance” between freedom of contract approaches and intervention to
assist the weaker party with which we will be chiey concerned.28
1.2.1 The Will Theory of Contract
In classical contract theory the role of the courts is to permit, even encourage, free
bargaining by competent adults. The function of the court, if called upon, is to discover
the true nature of the parties’ agreement and, in the case of breach of such agreement,
to compensate the innocent party. This theory reached its high point in the highly
industrialised, economically dominant England of the nineteenth century. The theory
was underpinned by the twin ideals of “freedom of contract” and “sanctity of contract”.
The notion of freedom of contract is not merely that an agreement is required but that
such agreement represents the entire contract; provided the agreement was made freely,
the courts and legislature should not intervene. Only in the event of a breach of the
agreement should the courts be concerned. A classic denition of the freedom (and
sanctity) of contract approach is provided by Jessell MR:
. . . (if) there is one thing which more than another public policy requires it is that men
of full age and competent understanding shall have the utmost liberty of contracting,
and that their contracts…entered into freely and voluntarily shall be held sacred. . .29
There have always been exceptions or qualications to the theory in its pure form.
Courts have always asserted the right to “police” the bargain and a freely made contract
will be invalidated if it is shown to be illegal or induced by one party’s fraud. Since the
agreement must be a genuine one, the common law has long recognised the vitiating
element of duress (the use or threat of physical force) as invalidating a contract if the
“victim” so wishes. Given the narrow constraints of traditional duress, equity developed
a doctrine of undue inuence where,
One party had induced the other to enter into the transaction by actual pressure
which equity regarded as improper but which was formerly not thought to amount to
duress at common law because no element of violence to the person was involved.30
Duress itself has been considerably expanded by a recognition by the courts that it
can apply to “economic” as well as physical pressure. Even in the absence of wrongdoing
28. There are, of course, far more radical approaches to contract law, some of which see law in general
and contract law in particular in a far less favourable light. Such theoretical approaches are outside the
scope of a book of this nature.
29. Cited in Beale, Bishop and Furmston (op.cit.) at p. 52.
30. Treitel G. The Law of Contract p. 408.
by either party, mistakes of a fundamental nature may render a contract void, though this
occurs rarely in practice.
Since it also implicit that agreements will be enforced only against competent
parties, rules on capacity restrict the scope of minors, drunkards and the mentally ill to
make enforceable agreements. Further, since corporations impose their own restraints on
their contractual capacity via their memorandum and articles of association, the courts
have the power to declare a company’s contracts ultra vires.
Long before the development of consideration, intention and the various vitiating
elements, English law restricted the making of informal contracts by the requirement
that certain contracts had to be made under seal, in writing, or via written evidence.
The Statute of Frauds, 1677, initially required that various categories of contract had to
be evidenced in writing. Most of these formal requirements have now been abolished.
However, one important category remains of great signicance in Hong Kong: contracts
for the sale or other disposition of land, which must be evidenced in writing or supported
by an unequivocal act of part performance.31
The most signicant interference with contractual “freedom”, however, arises via
the intervention of “implied” terms. Implied terms are regarded as part of the contract
even though not expressed by the parties. Such terms may arise through the custom of a
particular trade or market, to give “business efcacy” to a contract, or where the term is
seen as omitted only because it is so obvious it “goes without saying”. In all these cases
the implied term may be viewed as part of the parties’ “real” intention — something they
meant to include but did not or, at the very least, something they would have included if
they had considered the matter more carefully.
However, the traditional view, that implied terms do not undermine contractual
freedom but are merely an expression of the parties’ true intention, can no longer be
viewed as absolute. Many statutory implied terms are now non-excludable even by
the clearest exemption clauses, even if such exemptions have been read, understood
and signed by the party seeking to escape the exemption. Such statutory implied terms
are legislative consumer protection which owes nothing to the expressed “will” of the
parties. While such consumer protection legislation is more widespread in England, the
most important restriction on exemption clauses, the Unfair Contract Terms Act, 1977,
has been reproduced with little amendment in Hong Kong via the Control of Exemption
Clauses Ordinance (CECO). There are also terms implied “in law” which cannot be said
to be based on the parties’ presumed intention but are simply required to be present in
contracts of a certain type.32
It is more common, therefore, to regard “freedom of contract” as a concept
steeped in the ideology of nineteenth century “laissez-faire” industrial England and
long abandoned in favour of more “protectionist” judicial and statutory intervention.
31. In England these requirements have become more restrictive since the contract must now be
written as opposed to evidenced in writing and the (equitable) part performance doctrine has been
abolished.
32. See Liverpool City Council v Irwin [1977] A.C. 239 and 8.2.
Increased intervention, in England, would be seen as a natural consequence of a move

from a free market economy to a more welfare-based society.33 The interventionist trend
appears to have continued despite over 20 years of “new right” Conservative and Labour
government. Freedom of contract still has its adherents, however, especially in the
now dominant economy of the United States. Their view remains that intervention into
the contractual agreements of individual, cogniscent adults should be exceptional and
restricted. It might be assumed that Hong Kong’s less welfare-oriented political system
would be reected in a free-market, non-interventionist approach to contract but this is
not entirely the case.
1.2.1.1 Legislative Restraints on Freedom of Contract in Hong Kong
Despite the growth of “welfarism” in England, it might be assumed such judicial and,
more importantly, legislative restraints on contractual freedom have never been in
vogue in Hong Kong, reputedly one of the world’s “freest” economies. Hong Kong
has certainly proved less interventionist than England in this regard. This reects Hong
Kong’s avowed free market approach and its freedom from EU law encroachment, the
largest factor in the growth of consumer protection legislation in England. Yet, even in
Hong Kong, legislation and judicial intervention have put limits on unfettered market
freedom. There may be a free market in goods, yet legislation restricts the “market”
in money in that there is a limit on the interest rates which moneylenders (though not
banks) are permitted to charge. If “market competition” worked perfectly there would be
no need for such restrictions. Employment legislation imposes regulations as to working
conditions, rest days and the Mandatory Provident Fund. Legislation exists in relation
to certain forms of discrimination in employment practices and is likely to be increased.
A minimum wage of general application is under serious consideration and already
exists in relation to foreign domestic helpers. All of these changes to the law relating
to the contract of employment can be seen as restricting the “freedom” of the employer
and employee to negotiate their own contract free from outside interference. Implicitly,
however, they recognise that total freedom of contract would allow the more powerful
employer to dictate terms to the weaker employee.
Interventionist, welfare-based approaches are criticised by “free-marketeers” on
the basis that they not only restrict freedom but also fail to have their desired effect
of improving the lot of the poor and disadvantaged. It has already been argued, by its
opponents, that the introduction of a general minimum wage in Hong Kong would
increase unemployment as rms would “outsource” more jobs or relocate to areas where
unskilled labour is cheaper. It could also be argued that more foreign domestic helpers
would be employed in Hong Kong were the minimum wage to be abolished. Proponents
of the free market would assert that the protectionism involved in the setting of a
minimum wage merely restricts the right of employers to make free bargains, on lesser
terms, which many overseas domestic helpers would be more than willing to accept.
33. See, for example, Atiyah P. The Rise and Fall of Freedom of Contract.
Legislation here, therefore, involves a delicate balance between total freedom and the
prevention of exploitation.
Probably the most conspicuous legislative restraints on the parties’ ability to
contract “freely” in Hong Kong are in the area of consumer protection. The Control of
Exemption Clauses Ordinance (CECO) dealt with in chapter 8, and the Unconscionable
Contracts Ordinance (UCO) dealt with in chapter 12, are important examples of such
statutory intervention.
1.2.1.2 Judicial Restraints on Freedom of Contract
It has been said that, “English judges have always been stronger in doing justice in
a pragmatic fashion”,34 since English legal education and training tend to be practical
rather than theoretical. Given their similar educational and training background, the
same “pragmatic” approach can be seen among the Hong Kong judiciary. The approach
of the judges may be seen in terms of enforcing freely made agreements in so far as to
do so does not produce an “unjust” or unfair result. Where, however, freedom of contract
has resulted in the imposition of terms by a dominant party on a weaker one, the courts
are likely to intervene.
The search for a “fair” solution appears to contradict the view that contract law is
not concerned with fairness; that if one party has freely made a bad bargain he should be
expected to keep to it. Indeed, it has been said that,
In commercial transactions one party may take advantage of his greatly superior
bargaining power to drive a very hard bargain. . . A party may also take advantage of
his superior knowledge.35
In the case of Turner v Green,36 the plaintiff solicitor took advantage of his
knowledge of the outcome of a case to make a favourable contract with the defendant
who, the plaintiff knew, was unaware of the result of the case. The court held that this
was a “shabby trick” but that the contract was nonetheless valid. More recently, in
Walford v Miles,37 the House of Lords underlined the “adversarial” nature of bargaining.
Lord Ackner said:
Each party to the negotiations is entitled to pursue his (or her) own interest, so long as
he avoids making misrepresentations.38
The role for the court, according to common law principles, is to uphold hard
bargaining but to determine when the line has been crossed such that the agreement
infringes specic common law or statutory rules.
34. Atiyah (op. cit.) p. 405.

35. Smith and Thomas A Casebook on Contract 10th ed. p. 29.
36. [1895] 2 Ch. 205 referred to in Smith and Thomas (op. cit.) at p. 29.
37. [1992] 1 All E.R. 453, discussed at 3.8.5.
38. At p. 460.
Certainly the law on consideration supports the “freedom of contract” rule, since
the rule is that “consideration need not be adequate”; what one party gives need not be
equal to the other party’s contribution to the contract. In practice, however, the fairness or
unfairness of a bargain is likely to be signicant in a number of ways; “mere” unfairness
will not invalidate a contract but the unfair nature of a contract may encourage the
courts to look for other “vitiating” factors. So, for example, a written agreement to sell
a valuable car for $100 might be acceptable from a consideration point of view. In such
circumstances, however, the courts are likely to believe the “victim’s” assertion that he
was tricked or threatened and invalidate the agreement accordingly.
An obvious illustration of the relevance of fairness in contract is provided by the
example of equity, which is specically preserved, by the Basic Law, as a source of
law in Hong Kong, post-1997.39 Equity was founded on principles of morality and its
main court, Chancery, was a “court of conscience”. While the courts of common law
and equity were fused well over one hundred years ago in England, the role of equity
as a “court of conscience” remains. The maxims of equity still direct the courts in the
exercise of their discretion whether or not to grant equitable relief. The principle that
“he who comes to equity must come with clean hands” means that equitable remedies or
“relief” will only be granted to those who have acted fairly in respect of the contract.40
The principle that “he who seeks equity must do equity” means that equitable relief will
be granted only where the claimant is prepared to comply with the requirements of the
court to do justice to the other party.41
As a further example, it is now generally recognised that the rationale for nding
that an agreement is “frustrated”,42 by a post-contractual event which makes performance
impossible, is that it would be unfair to demand contractual performance in such cases.
“Fairness” is also relevant to the question of non-statutory “unconscionability”,
as well as the statutory form mentioned above.43 Hong Kong courts have overturned
agreements on the basis of unconscionability where one party has taken advantage
of a superior bargaining position to produce an unfair agreement. In Lo Wo and
Others v Cheung Chan Ka Joseph and Another,44 a Hong Kong court overturned, for
unconscionability, the sale of a half share of property in Hong Kong by elderly mainland
women. The main justication for the court’s action was that the buyers had failed to
mention that they had paid far more for the other half share and had not advised the
sellers to take independent advice.
While the above examples may be seen as limited exceptions to the principle of
contractual freedom, it has been argued that there has been a more general shift by the
courts away from freedom of contract towards an interventionist approach seeking to
39. See 2.2.

40. See D & C Builders v Rees discussed at 4.7.3.3.
41. See Cheese v Thomas [1994] 1 W.L R. 129; [1994] 1 All E.R. 35 discussed at 11.3.
42. See 14.4.
43. See 1.2.1.1 and chapter 12.
44. [2001] 3 HKC 70, discussed at 12.2.
protect the weaker party from the stronger in an attempt to produce a “fair” result.
Reiter states:
. . . the courts have overridden ‘contract principles’ and have established limits on the
exercise of contract power. . . Through a great variety of techniques, the courts have
paid lip service to contract law in theory, and have ignored it in practice.45
Reiter’s view is that judges have intervened consistently in order to achieve a “fair”
result at the expense of destroying contractual “freedom”. While this may be true of the
English judges, it is questionable how relevant it is to the Hong Kong scenario where the
tradition has been, at least until recently, to apply the approaches of the English courts
rather than adapt precedents to perceived Hong Kong needs. Even here, however, there
appears to be a gradual change. The Lo Wo case, considered above, is a clear example,
since the court could have held that the buyers had merely exercised their right to strike
a hard bargain and that the elderly sellers had acted imprudently.
1.2.2 Judicial Creativity in Contract Law
What the “fairness” discussion indicates is the extent to which judges actually have far
more exibility than is generally believed by the layman. Many Hong Kong students
commence their studies believing that the “answer” to a legal problem should always
be discoverable by an application of the relevant statutory and common law (case law)
rules to the facts of a case. Statutory rules must be followed by the courts and past
judicial “precedents” from the higher courts46 must be adhered to. This should produce
predictability and certainty in the law; a potential claimant, or his legal adviser, should
be able to predict the outcome of proposed litigation and respond accordingly. Indeed,
in a truly “certain” system cases should only come to court on novel points of law not
previously covered by legislation or judicial decision. Such a “rational”47 system would
leave no creative role for the judge; his role would be merely to “nd and apply” the
relevant rules. In practice, this narrow view of the judicial function is generally seen as
unrealistic, especially in common law systems48 where most of the rules are to be found
in previous decided cases rather than legislative rules or written codes. In determining
any case a judge has to decide which facts are “relevant”. Even more important, the
judge has to determine which rules are relevant. Those precedents which would produce
an unwelcome decision may be found to be irrelevant or inapplicable in the present case.
Even legislative rules do not produce the certainty the layman tends to assume, since
45. Reiter The Control of Contract Power (1981) I Oxford JLS p. 360.
46. Considered in more detail in chapter 2.
47. See Weber M. On Law in Economy and Society.
48. In this context “common law” refers to those legal systems which derive from the English rather
than the Continental European system.
laws must be rst “interpreted” before they can be applied, and that interpretation has to
be made by the judge (or judges).
Further scope for judicial exibility is provided by the emphasis, in common law
systems, on the concept of “reasonableness”. Agreement is judged, as we have already
seen, primarily on the basis of whether a “reasonable man” would assume agreement in the
circumstances; the validity of an exemption clause may depend on its “reasonableness”;
and an innocent party must take all “reasonable” steps to keep loss resulting from the
other’s breach to a minimum (to “mitigate”). In all such cases, of course, the ultimate
decision on reasonableness is a matter for the judge.
In short, therefore, the common law system is far more exible than at rst appears
and judges often “create” law rather than simply nd and apply it. The very fact that
senior judges, in a particular case, may disagree strongly as to its outcome illustrates the
lack of certainty in the law. There are examples throughout this book of judges reaching
very differing conclusions as to the proper outcome of a case or, even where they agree
as to the outcome, differing as to the reasons for it. Schur writes,
Judicial precedent and legal doctrine can be found or developed to support almost any
outcome. The real decision is made rst-on the basis of the judge’s conceptions of
justice-and then it is “rationalized” in the written opinion.49
To Schur then, the decision comes rst and the explanation follows. A less extreme
view is expressed by Lord Radcliffe, a former House of Lords judge, as follows:
. . . there was never a more sterile controversy than whether a judge makes law. Of
course he does. How can he help it? The legislature and the judicial process respectively
are two complementary sources of law making.50
There may be scope for disagreement as to the scope for creativity. Paterson51 found
that some law lords dealing with nal appeals thought there would rarely be a “right”
answer; others felt that in many cases the decision inevitably went one way.52 What we
can say with some assurance is that the student coming to contract for the rst time is
likely to be surprised by the relative lack of certainty in the law and the scope for judicial
disagreement.53
Judicial creativity, while generally seen as an attempt to do justice in a particular
case, is not without its problems. The rst is that it erodes the principle of treating like
cases alike and produces uncertainty in the law. If judges can ignore or overrule existing
49. Schur E. Law and Society p. 43.

50. Lord Radcliffe Not in Feather Beds p. 215.
51. Paterson A. The Law Lords pp. 190–193.
52. The legal “formalist”, Ronald Dworkin, believes that, invariably, there is a “right” answer but that
judges frequently fail to nd it.
53. See, for example, the Schuler v Wickman case discussed at 8.4.1.
Exploring the Variety of Random
Documents with Different Content
to trace the incessant movements of the king throughout this
troubled year, he certainly visited Winchester, and (probably thence)
Malmesbury. Still we have not, I believe, proof of his presence at
Andover.[128] And there are other grounds, I shall now show, for
thinking that the earldom was conferred before March, 1140.
William of Newburgh, speaking of the arrest of Geoffrey de
Mandeville, assures us that Stephen bore an old grudge against him,
which he had hitherto been forced to conceal. Its cause was a gross
outrage by Geoffrey, who, on the arrival of Constance of France, the
bride of Eustace the heir-apparent, had forcibly detained her in the
Tower.[129] We fix the date of this event as February or March, 1140,
from the words of the Continuator of Florence,[130] and that date
agrees well with Henry of Huntingdon's statement, that Stephen had
bought his son's bride with the treasure he obtained by the death of
the great Bishop of Salisbury (December 11, 1139).[131]
It would seem, of course, highly improbable that this audacious
insult to the royal family would have been followed by the grant of
an earldom. We might consequently infer that, in all likelihood,
Geoffrey had already obtained his earldom.
We have, however, to examine the movements of Stephen at the
time. The king returned, as we saw, to Reading, after spending his
Christmas at Salisbury. He was then summoned to the Fen country
by the revolt of the Bishop of Ely, and he set out thither, says Henry
of Huntingdon, "post Natale" (p. 267). He may have taken
Westminster on his way, but there is no evidence that he did. He
had, however, returned to London by the middle of March, to take
part in a Mid-Lent council.[132] His movements now become more
difficult to trace than ever, but it may have been after this that he
marched on Hereford and Worcester.[133] Our next glimpse of him is
at Whitsuntide (May 26), when he kept the festival in sorry state at
the Tower.[134] It has been suggested that it was for security that he
sought the shelter of its walls. But this explanation is disposed of by
the fact that the citizens of London were his best friends and proved,
the year after, the virtual salvation of his cause. It would seem more
likely that he was anxious to reassert his impaired authority and to
destroy the effect of Geoffrey's outrage, which might otherwise have
been ruinous to his prestige.[135]
It was, as I read it, at the close of Whitsuntide, that is, about the
beginning of June, that the king set forth for East Anglia, and,
attacking Hugh Bigod, took his castle of Bungay.[136]
In August the king again set forth to attack Hugh Bigod;[137] and
either to this, or to his preceding East Anglian campaign, we may
safely assign his charter, granted at Norwich, to the Abbey of
Reading.[138] Now, the first witness to this charter is Geoffrey de
Mandeville himself, who is not styled an earl. We learn, then, that, at
least as late as June, 1140, Geoffrey had not received his earldom.
This would limit the date of his creation to June-December, 1140, or
virtually, at the outside, a period of six months.
Such, then, is the ultimate conclusion to which our inquiry leads
us. And if it be asked why Stephen should confer an earldom on
Geoffrey at this particular time, the reply is at hand in the condition
of affairs, which had now become sufficiently critical for Geoffrey to
begin the game he had made up his mind to play. For Stephen could
not with prudence refuse his demand for an earldom.[139]
The first corollary of this conclusion is that "the second type" of
Stephen's great seal (which is that appended to this charter) must
have been already in use in the year 1140, that is to say, before his
fall in 1141.
Mr. Birch, who, I need hardly say, is the recognized authority on
the subject, has devoted one of his learned essays on the Great
Seals of the Kings of England to those of Stephen.[140] He has
appended to it photographs of the two types in use under this
sovereign, and has given the text of nineteen original sealed
charters, which he has divided into two classes according to the
types of their seals. The conclusion at which he arrived as the result
of this classification was that the existence of "two distinctly variant
types" is proved (all traces of a third, if it ever existed, being now
lost), one of which represents the earlier, and the other the later,
portion of the reign.[141] To the former belong nine, and to the latter
ten of the charters which he quotes in his paper. The only point on
which a question can arise is the date at which the earlier was
replaced by the later type. Mr. Birch is of opinion that—
"the consideration of the second seal tends to indicate the alteration of the type
subsequent to his liberation from the hands of the Empress, and it is most natural
to suppose that this alteration is owing to the destruction or loss of his seal
consequent to his own capture and incarceration" (p. 15).
There can be no doubt that this is the most natural suggestion;
but if, as I contend, the very first two of the charters adduced by Mr.
Birch as specimens of the later type are previous to "his capture and
incarceration," it follows that his later great seal must have been
adopted before that event. One of these charters is that which forms
the subject of this chapter; the other is preserved among the
records of the duchy of Lancaster.[142] At the date when the latter
was granted, the king was in possession of the temporalities of the
see of Lincoln, which he had seized on the arrest of the bishops in
June, 1139. As Alexander had regained possession of his see by the
time of the battle of Lincoln, this charter must have passed before
Stephen's capture, and most probably passed a year or more before.
We have then to account for the adoption by Stephen of a new great
seal, certainly before 1141, and possibly as early as 1139. Is it not
possible that this event may be connected with the arrest of the
chancellor and his mighty kinsmen in June, 1139, and that the seal
may have been made away with in his and their interest, as on the
flight of James II., in order to increase the confusion consequent on
that arrest?[143]
And now we come to Geoffrey's charter itself[144]:—
"S. Rex Ang[lorum] Archiepiscopis Episcopis Abbatibus Comitibus
Justiciis Baronibus Vicecomitibus et Omnibus Ministris et fidelibus
suis francis et Anglis totius Angliæ salutem. Sciatis me fecisse
Comitem de Gaufr[ido] de Magnauillâ de Comitatu Essex[e]
hereditarie. Quare uolo et concedo et firmiter precipio quod ipse et
heredes sui post eum hereditario jure teneant de me et de heredibus
meis bene et in pace et libere et quiete et honorifice sicut alii
Comites mei de terrâ meâ melius vel liberius vel honorificentius
tenent Comitatus suos unde Comites sunt cum omnibus dignitatibus
et libertatibus et consuetudinibus cum quibus alii Comites mei prefati
dignius vel liberius tenent.
"T[estibus] Will[elm]o de Iprâ et Henr[ico] de Essexâ[145] et
Joh[ann]e fil[io] Rob[erti] fil[ii] Walt[eri][146] et Rob[erto] de Nouo
burgo[147] et Mainfen[ino] Britoñ[148] et Turg[esio] de Abrinc[is][149] et
Will[elm]o de S[an]c[t]o Claro[150] et Will[elm]o de Dammart[in][151]
et Ric[ardo] fil[io] Ursi[152] et Will[elm]o de Auco[153] et Ric[ardo]
fil[io] Osb[erti][154] et Radulfo de Wiret[155] (sic) et Eglin[o][156] et
Will[elm]o fil[io] Alur[edi][157] et Will[elmo] filio Ernald[i].[158] Apud
Westmonasterium."
Taking this, as I believe it to be, as our earliest charter of creation
extant or even known, the chief point to attract our notice is its
intensely hereditary character. Geoffrey receives the earldom
"hereditarie," for himself "et heredes sui post eum hereditario jure."
The terms in which the grant is made are of tantalizing vagueness;
and, compared with the charters by which it was followed, this is
remarkable for its brevity, and for the total omission of those
accompanying concessions which the statements of our historians
would lead us to expect without fail.[159]
We must now pass from the grant of this charter to the great day
of Lincoln (February 2, 1141), where the fortunes of England and
her king were changed "in the twinkling of an eye" by the wild
charge of "the Disinherited," as they rode for death or victory.[160]
[98] Rotuli Scaccarii Normanniæ, II. clxxxviii. Such was also

the opinion of M. Leopold Delisle. The French editors, however,
of Ordericus write: "On ne sait auquel des nombreux
Magneville, Mandeville, Manneville de Normandie rapporter le
berceau de cette illustre maison" (iv. 108).
[99] There is a curious story in the Waltham Chronicle (De
Inventione, cap. xiii.) that the Conqueror placed Geoffrey in the
shoes of Esegar the staller. The passage runs thus: "Cui [Tovi]
successit filius ejus Adelstanus pater Esegari qui stalra inventus
est in Angliæ conquisitione a Normannis, cuius hereditatem
postea dedit conquisitor terræ, rex Willelmus, Galfrido de
Mandevile proavi presentis comitis Willelmi. Successit quidem
Adelstanus patri suo Tovi, non in totam quidem possessionem
quam possederat pater, sed in eam tantum quæ pertinebat ad
stallariam, quam nunc habet comes Willelmus." The special
interest of this story lies in the official connection of Esegar [or
Ansgar] the staller with London and Middlesex, combined with
the fact that Geoffrey occupied the same position. See p. 354,
and Addenda.
[100] "Post cujus [i.e. Galfridi] mortem reliquit filium suum
hæredem, cui firmitas turris Londoniarum custodienda
committitur. Nobili cum Rege magnificé plura gessit patri non
immerito in rebus agendis coæqualis" (Monasticon). Dugdale's
error, as we might expect, is followed by later writers, Mr. Clark
treating Geoffrey as the first "hereditary constable," and his
son, whom with characteristic inaccuracy he transforms from
"William" into "Walter," as the second (Mediæval Military
Architecture, ii. 253, 254). The French editors of Ordericus (iv.
108) strangely imagined that William was brother, not son, of
Geoffrey de Mandeville.
[101] "In arce Lundoniensi Guillelmo de Magnavilla
custodiendus in vinculis traditus est" (iv. 108).
[102] See for instance Abingdon Cartulary, ii. 73, 85, 116,
where he attests charters of circ. 1110-1112.
[103] Monasticon, iii. 433. He founds the priory "pro anima
Athelaisæ primæ uxoris meæ, matris filiorum meorum jam
defunctæ;" and "Lecelina domina uxor mea" is a witness to the
charter.
[104] It is necessary to check by authentic charters and other
trustworthy evidence the chronicles printed in the Monasticon
under Walden Abbey. One of these was taken from a long and
interesting MS., formerly in the possession of the Royal Society,
but now among the Arundel MSS. in the British Museum. This,
which is only partially printed, and which ought to be published
in its entirety, has the commencement wanting, and is,
unfortunately, very inaccurate for the early period of which I
treat. It is this narrative which makes the wild misstatements
as to the circumstances of the foundation, which grossly
misdates Geoffrey's death, etc., etc. All its statements are
accepted by Dugdale. The other chronicle, which he printed
from Cott. MS., Titus, D. 20, is far more accurate, gives
Geoffrey's death correctly, and rightly assigns him as wife the
sister (not the daughter) of the Earl of Oxford, thus correcting
Dugdale's error. It is the latter chronicle which Dugdale has
misquoted with reference to the charge of the Tower.
[105] Who was really Peter de Valognes.
[106] "Madox ... has shown ... that Geoffrey Fitzpeter, Earl of
Essex, obtained from the Crown Grants of the shrievalty of the
Counties of Essex and Hertford when the Earls, commonly
called Earls of Clare, were Earls of Hertford, and had the Third
Penny of the Pleas of that County" (iii. 69, ed. 1829).
[107] "The County of Hertford appears to have been, at the
time of the Survey, in the King's hands, and Peter was then
Sheriff; and the Sheriffwick of Hertfordshire was afterwards
granted in Fee, by the Empress Maud, to Geoffrey de
Mandeville, Earl of Essex, at a rent as his father and
grandfather had held it. The father of Geoffrey was Geoffrey
Fitz Peter, and probably was son of Peter, the Sheriff at the time
of the Survey. The first trace which the Committee has
discovered of the title of the Earls of Clare to the Third Penny
of the County is in the reign of Henry the Second, subsequent
to the grants under which the Earls of Essex claimed the
Shrievalty in fee, at a fee-farm rent. But the grant of the Third
Penny must have been of an earlier date, as the grant to the
Earl of Essex was subject to that charge. The family of Clare
must therefore have had the Third Penny either before or early
in the Reign of King Stephen" (iii. 125).
[108] Const. Hist., i. 362.
[109] Official Baronage, ii. 175.
[110] See Appendix C.
[111] See Frontispiece.
[112] Degrees of England.
[113] "Note that this is the most ancient creation-charter
which hath ever been known." Vide Selden, Titles of Honour, p.
647.
[114] Historic Peerage, p. 178.
[115] Journ. Brit. Arch. Ass., xxxi. 386.
[116] Addl. MSS., 31,943, fol. 97.
[117] Comp. fol. 96: "My position is that where this system of
counter-charters between Stephen and the Empress is proved,
the former generally is the first in point of date."
[118] See p. 41 ad pedem.
[119] Notes and Queries, 6th Series, v. 83.
[120] On the Great Seal of King Stephen, pp. 19, 20.
[121] "Apud regem Stephanum, ac totius regni majores tanti
erat ut nomine comitis et re jampridem dignus haberetur"
(Mon. Angl., vol. iv. p. 141).
[122] "Gaufridus de Magnavillâ comes Essexe" (ibid.).
[123] Addl. MSS. 31,943, fol. 85 dors.
[124] Ordericus Vitalis, vol. v. p. 120.
[125] See p. 282, n. 4.
[126] "Protractaque est obsidio [Lincolnie] a diebus Natalis
Domini (1140) usque ad Ypapanti Domini" (Will. Newburgh, i.
39).
[127] To this visit may be assigned three charters (Sarum
Charters and Documents, pp. 9-11) of interest for their
witnesses. Two of them are attested by Philip the chancellor,
who is immediately followed by Roger de Fécamp. The latter
had similarly followed the preceding chancellor, Roger, in one of
Stephen's charters of 1136 (see p. 263), which establishes his
official position. Among the other witnesses were Bishop Robert
of Hereford, Count Waleran of Meulan, Robert de Ver, William
Martel, Robert d'Oilli with Fulk his brother, Turgis d'Avranches,
Walter de Salisbury, Ingelram de Say, and William de Pont de
l'Arche.
[128] The "P. cancellarius," by whom the writ is tested, was a
chancellor of whom, according to Foss, virtually nothing is
known. He was, however, Philip (de Harcourt), on whom the
king conferred at Winchester, in 1140, the vacant see of
Salisbury ("Rex Wintoniam veniens consilio baronum suorum
cancellario suo Philippo Searebyriensem præsulatum ... dedit"
(Cont. Flor. Wig.)). But the chapter refused to accept him as
bishop, and eventually he was provided for by the see of
Bayeux. He is likely, with or without the king, to have gone
straight to Salisbury after his appointment at Winchester, in
which case he would not have been present at Andover, even if
Stephen himself was.
[129] "Acceptam ab eo injuriam rex caute dissimulabat, et
tempus opportunum quo se ulcisceretur, observabat. Injuria
vero quam regi nequam ille intulerat talis erat. Rex ante annos
aliquot episcopi, ut dictum est, Salesbiriensis thesauros
adeptus, summa non modica regi Francorum Lodovico
transmissa, sororem ejus Constantiam Eustachio filio suo
desponderat; ... eratque hæc cum socru sua regina Lundoniis.
Cumque regina ad alium forte vellet cum eadem nuru sua
locum migrare, memoratus Gaufridus arci tunc præsidens,
restitit; nuruque de manibus socrus, pro viribus obnitentis,
abstracta atque retenta, illam cum ignominia abire permisit.
Postea vero reposcenti, et justum motum pro tempore
dissimulanti, regi socero insignem prædam ægre resignavit" (ii.
45).
[130] (1140) "Facta est desponsatio illorum mense Februario
in transmarinis partibus, matre regina Anglorum præsente" (ii.
725).
[131] "Accipiens thesauros episcopi comparavit inde
Constantiam sororem Lodovici regis Francorum ad opus
Eustachii filii sui" (p. 265). It is amusing to learn from his
champion (the author of the Gesta Stephani) that the king
spent this treasure on good and pious works. This matrimonial
alliance is deserving of careful attention, for the fact that
Stephen was prepared to buy it with treasure which he sorely
needed proves its importance in his eyes as a prop to his now
threatened throne.
[132] Annals of Waverley (Ann. Mon., ii. 228), where it is
stated that, at this council, Stephen gave the see of Salisbury
to his chancellor, Philip. According, however, to the Continuator
of Florence, he did this not at London, but at Winchester (see
p. 47, supra).
[133] See the Continuator of Florence.
[134] Will. Malms.
[135] See p. 81 as to the alleged riot in London and death of
Aubrey de Vere, three weeks before.
[136] "Ad Pentecostem ivit rex cum exercitu suo super
Hugonem Bigod in Sudfolc" Ann. Wav. (Ann. Mon., ii. 228).
[137] "Item in Augusto perrexit super eum et concordati sunt,
sed non diu duravit" (ibid.).
[138] Printed in Archæological Journal, xx. 291. Its second
witness is Richard de Luci, whom I have not elsewhere found
attesting before Christmas, 1141.
[139] If, as would seem, Hugh Bigod appears first as an earl
at the battle of Lincoln, when he fought on Stephen's side, it
may well be that the "concordia" between them in August,
1140, similarly comprised the concession by the king of comital
rank. On the other hand, there is a noteworthy charter (Harl.
Cart., 43, c. 13) of Stephen, which seems to belong to the
winter of 1140-1, to which Hugh Bigod is witness, not as an
earl, so that his creation may have taken place very shortly
before Stephen's fall. As this charter, according to Mr. Birch, has
the second type of Stephen's seal, it strengthens the view
advanced in the text.
[140] Transactions of the Royal Society of Literature, vol. xi.,
New Series.
[141] Mr. Birch points out the interesting fact that while the
earlier type has an affinity to that of the great seal of Henry I.,
the later approximates to that adopted under Henry II.
[142] Royal Charters, No. 15. See my Ancient Charters, p. 39.
[143] Dr. Stubbs observes that the consequence of the arrest
was that "the whole administration of the country ceased to
work" (Const. Hist., i. 326).
[144] Cotton Charter, vii. 4. See Frontispiece.
[145] This is the well-known Henry de Essex (see Appendix
U), son of Robert (Rot. Pip., 31 Hen. I.), and grandson of
Swegen of Essex (Domesday). He witnessed several of
Stephen's charters, probably later in the reign, but was also a
witness to the Empress's charters to the Earls of Oxford and of
Essex (vide post).
[146] A John, son of Robert fitz Walter (sheriff of East Anglia,
temp. Hen. I.), occurs in Ramsey Cartulary, i. 149.
[147] Robert de Neufbourg, said to have been a younger son
of Henry, Earl of Warwick, occurs in connection with
Warwickshire in 1130 (Rot. Pip., 31 Hen. I.). Mr. Yeatman
characteristically advances "the idea that Robert de Arundel
and Robert de Novoburgo were identical." He was afterwards
Justiciary of Normandy (Ord. Vit.), having sided with Geoffrey
of Anjou (Rot. Scacc. Norm.). He is mentioned in the Pipe-Rolls
of 2 and 4 Henry II. According to Dugdale, he died (on the
authority of the Chronicon Normanniæ), in August, 1158, a
date followed by Mr. Yeatman. Mr. Eyton, however (Court and
Itinerary, p. 47), on the same authority (with a reference also
to Gervase, which I cannot verify) makes him die in August,
1159. The true date seems to have been August 30, 1159,
when he died at Bec (Robert de Torigni).
[148] The Maenfininus Brito (Mr. Birch reads "Mamseu"), who,
in the Pipe-Roll of 1130 (p. 100), was late sheriff of Bucks. and
Beds. Probably father of Hamo filius Meinfelini, the Bucks.
baron of 1166 (Cartæ). See also p. 201, n. 2.
[149] Turgis d'Avranches appears in the Pipe-Roll of 31 Hen. I.
as having married the widow of Hugh "de Albertivillâ." We shall
find him witnessing Stephen's second charter to the earl
(Christmas, 1141).
[150] William de St. Clare occurs in Dorset and
Huntingdonshire in 1130 (Rot. Pip., 31 Hen. I.). He was, I
presume, of the same family as Hamon de St. Clare, custos of
Colchester in 1130 (ibid.), who was among the witnesses to
Stephen's Charter of Liberties (Oxford) in 1136.
[151] Odo de Dammartin states in his Carta (1166) that he
held one fee (in Norfolk) of the king, of which he had
enfeoffed, temp. Hen. I., his brother, William de Dammartin.
[152] Richard fitz Urse is of special interest as the father (see
Liber Niger) of Reginald fitz Urse, one of Becket's murderers.
He occurs repeatedly in the Pipe-Roll of 31 Hen. I. After this
charter he reappears at the battle of Lincoln (Feb. 2, 1141):
—"Capitur etiam Ricardus filius Ursi, qui in ictibus dandis
recipiendisque clarus et gloriosus comparuit" (Hen. Hunt., p.
274). For his marriage to Sybil, daughter of Baldwin de Bollers
by Sybil de Falaise (neptis of Henry I.), see Eyton's Shropshire,
xi. 127, and Genealogist, N.S., iii. 195. One would welcome
information on his connection, if any, with the terrible sheriff,
Urse d'Abetot, and his impetuous son; but I know of none.
[153] William de Eu appears as a tenant of four knights' fees
de veteri feoffamento under Mandeville in the Liber Niger.
[154] Richard fitz Osbert similarly figures (Liber Niger) as a
tenant of four knights' fees de veteri feoffamento. He also held
a knight's fee of the Bishop of Ely in Cambridgeshire. An Osbert
fitz Richard, probably his son, attests a charter of Geoffrey's
son, Earl William, to Walden Abbey.
[155] A Ralph de Worcester occurs in the Cartæ and
elsewhere under Henry II.
[156] "Eglino," an unusual name, probably represents
"Egelino de Furnis," who attests a charter of Stephen at Eye
(Formularium Anglicanum, p. 154).
[157] William fitz Alfred held one fee of Mandeville de novo
feoffamento. He also attests the earl's foundation charter of
Walden Abbey (Mon. Ang., iv. 149). A William fitz Alfred occurs,
also, in the Pipe-Roll of 31 Hen. I.
[158] William fitz Ernald similarly held one knight's fee de
novo feoffamento. He also attests the above foundation charter
just after William fitz Alfred.
[159] See Appendix D, on "Fiscal Earls."
[160] "Acies exhæredatorum, quæ præibat, percussit aciem
regalem ... tanto impetu, quod statim, quasi in ictu oculi,
dissipata est.
CHAPTER III.
TRIUMPH OF THE EMPRESS.
At the time of this sudden and decisive triumph, the Empress had
been in England some sixteen months. With the Earl of Gloucester,
she had landed at Arundel,[161] on September 30, 1139,[162] and while
her brother, escorted by a few knights, made his way to his
stronghold at Bristol, had herself, attended by her Angevin suite,
sought shelter with her step-mother, the late queen, in the famous
castle of Arundel. Stephen had promptly appeared before its walls,
but, either deeming the fortress impregnable or being misled by
treacherous counsel,[163] had not only raised his blockade of the
castle, but had allowed the Empress to set out for Bristol, and had
given her for escort his brother the legate, and his trusted supporter
the Count of Meulan.[164] From the legate her brother had received
her at a spot appointed beforehand, and had then returned with her
to Bristol. Here she was promptly visited by the constable, Miles of
Gloucester, who at once acknowledged her claims as "the rightful
heir" of England.[165] Escorted by him, she removed to Gloucester, of
which he was hereditary castellan, and received the submission of
that city, and of all the country round about.[166] The statements of
the chroniclers can here be checked, and are happily confirmed and
amplified by a charter of the Empress, apparently unknown, but of
great historical interest. The following abstract is given in a
transcript taken from the lost volume of the Great Coucher of the
duchy[167]:—
"Carta Matilde Imperatricis in quâ dicit, quod[168] quando in Angliam venit post
mortem H. patris sui[169] Milo de Gloecestrâ quam citius potuit venit ad se[170]
apud Bristolliam et recepit me ut dominam et sicut illam quam justum hæredem
regni Angliæ recognovit, et inde me secum ad Gloecestram adduxit et ibi
homagium suum mihi fecit ligie contra omnes homines. Et volo vos scire quod tunc
quando homagium suum apud Gloecestram recepit, dedi ei pro servicio suo in
feodo et hereditate sibi et heredibus suis castellum de Sancto Briavel(li) et totam
forestam de Dene,"[171] etc., etc.
It was at Gloucester that she received the news of her brother's
victory at Lincoln (February 2, 1141), and it was there that he joined
her, with his royal captive, on Quinquagesima Sunday (February 9).
[172] It was at once decided that the king should be despatched to
Bristol Castle,[173] and that he should be there kept a prisoner for life.
[174]
In the utter paralysis of government consequent on the king's

capture, there was not a day to be lost on the part of the Empress
and her friends. The Empress herself was intoxicated with joy, and
eager for the fruits of victory.[175] Within a fortnight of the battle, she
set out from Gloucester, on what may be termed her first progress.
[176] Her destination was, of course, Winchester, the spot to which
her eyes would at once be turned. She halted, however, for a while
at Cirencester,[177] to allow time for completing the negotiations with
the legate.[178] It was finally agreed that, advancing to Winchester,
she should meet him in an open space, without the walls, for a
conference. This spot a charter of the Empress enables us
apparently to identify with Wherwell.[179] Hither, on Sunday, the 2nd
of March, a wet and gloomy day,[180] the clergy and people, headed
by the legate, with the monks and nuns of the religious houses, and
such magnates of the realm as were present, streamed forth from
the city to meet her.[181]
The compact ("pactum") which followed was strictly on the lines
of that by means of which Stephen had secured the throne. The
Empress, on her part, swore that if the legate would accept her as
"domina," he should henceforth have his way in all ecclesiastical
matters. And her leading followers swore that this oath should be
kept. Thereupon the legate agreed to receive her as "Lady of
England," and promised her the allegiance of himself and of his
followers so long as she should keep her oath. The whole agreement
is most important, and, as such, should be carefully studied.[182]
On the morrow (March 3) the Empress entered Winchester, and
was received in state in the cathedral, the legate supporting her on
the right, and Bernard of St. David's on the left.[183]
Now, it is most important to have a clear understanding of what
really took place upon this occasion.
The main points to keep before us are—(1) that there are two
distinct episodes, that of the 2nd and 3rd of March, and that of the
7th and 8th of April, five weeks intervening between them, during
which the Empress left Winchester to make her second progress; (2)
that the first episode was that of her reception at Winchester, the
second (also at Winchester) that of her election.
It is, perhaps, not surprising that our historians are here in woeful
confusion. Dr. Stubbs alone is, as usual, right. Writing from the
standpoint of a constitutional historian, he is only concerned with the
election of the Empress, and to this he assigns its correct date.[184]
In his useful and excellent English History, Mr. Bright, on the
contrary, ignores the interval, and places the second episode "a few
days after" the first.[185] Professor Pearson, whose work is that which
is generally used for this period, omits altogether the earlier episode.
[186] Mr. Birch, on the other hand, in his historical introduction to his
valuable fasciculus of the charters of the Empress, ignores altogether

the later episode, though he goes into this question with special
care. Indeed, he does more than this; for he transfers the election
itself from the later to the earlier occasion, and assigns to the
episode of March 2 and 3 the events of April 7 and 8. This cardinal
error vitiates his elaborate argument,[187] and, indeed, makes
confusion worse confounded. Mr. Freeman, though, of course, in a
less degree, seems inclined to err in the same direction, when he
assigns to the earlier of the two episodes that importance which
belongs to the later.[188]
Rightly to apprehend the bearing of this episode, we must glance
back at the preceding reigns. Dr. Stubbs, writing of Stephen's
accession, observes that "the example which Henry had set in his
seizure and retention of the crown was followed in every point by his
successor."[189] But on at least one main point the precedent was
older than this. The Conqueror, in 1066, and his heir, in 1087, had
both deemed it their first necessity to obtain possession of
Winchester. Winchester first, and then London, was a rule that thus
enjoyed the sanction of four successive precedents. To secure
Winchester with all that it contained, and with all the prestige that
its possession would confer, was now, therefore, the object of the
Empress. This object she attained by the pactum of the 2nd of
March, and with it, as we have seen, the conditional allegiance of
the princely bishop of the see.
Now, Henry of Blois was a great man. As papal legate, as Bishop
of Winchester, and as brother to the captive king, he possessed an
influence, in his triple capacity, which, at this eventful crisis, was
probably unrivalled in the land. But there was one thing that he
could not do—he could not presume, of his own authority, to depose
or to nominate an English sovereign. Indeed the very fact of the
subsequent election (April 8) and of his claim, audacious as it was,
that that election should be the work of the clergy, proves that he
had no thought of the even more audacious presumption to
nominate the sovereign himself. This, then, is fatal to Mr. Birch's
contention that the Empress was, on this occasion (March 3),
elected "domina Angliæ." Indeed, as I have said, it is based on a
confusion of the two episodes. The legate, as Mr. Birch truly says,
"consented to recognize (sic) the Empress as Domina Angliæ, or
Lady, that is, Supreme Governor of England," but, obviously, he
could only do so on behalf of himself and of his followers. We ought,
therefore, to compare his action with that of Miles of Gloucester in
1139, when, as we have seen, in the words of the Empress—
"Recepit me ut dominam et sicut illam quam justum hæredem regni Angliæ
recognovit ... et ibi homagium suum mihi fecit ligie contra omnes homines."[190]
Notice here the identity of expression—the "reception" of the
Empress and the "recognition" of her claims. I have termed the
earlier episode the "reception," and the later the "election" of the
Empress. In these terms is precisely expressed the distinction
between the two events. Take for instances the very passages
appealed to by Mr. Birch himself:—
"The exact words employed by William of Malmesbury are 'Nec dubitavit
Episcopus Imperatricem in Dominam Angliæ recipere' (sic). In another place the
same Henry de Blois declares of her, 'In Angliæ Normanniæque Dominam eligimus'
(sic). This regular election of Mathildis to the dignity and office of Domina Angliæ
took place on Sunday, March 2, A.D. 1141" (p. 378).
Now we know, from William of Malmesbury himself, that "the
regular election in question" took place on the 8th of April, and that
the second of the passages quoted above refers to this later
episode,[191] while the other refers to the earlier.[192] I have drawn
attention to the two words (recipere and eligimus) which he
respectively applies to the "reception" and the "election." The
description of this "reception" by William of Malmesbury[193]
completely tallies with that which is given by the Empress herself in
a charter.[194] It should further be compared with the account by the
author of the Gesta Stephani, of the similar reception accorded to
Stephen in 1135.[195]
But though the legate could open to the Empress the cathedral
and the cathedral city, he had no power over the royal castle. This
we saw in the case of Stephen, when his efforts to secure the
constable's adherence were fruitless till the king himself arrived.
Probably the constable, at this crisis, was the same William de Pont
de l'Arche, but, whoever he was, he surrendered to the Empress the
castle and all that it contained. In one respect, indeed, she was
doomed to be bitterly disappointed, for the royal treasury, which her
adventurous rival had found filled to overflowing, was by this time all
but empty. One treasure, however, she secured; the object of her
desires, the royal crown, was placed in her triumphant hands.[196]
To the one historian who has dealt with this incident it has proved
a stumbling-block indeed. Mr. Freeman thus boldly attacks the
problem:—
"William of Malmesbury (Hist. Nov., iii. 42) seems distinctly to exclude a
coronation; he merely says, 'Honorifica factâ processione, recepta est in ecclesia
episcopatus Wintoniæ.' We must, therefore, see only rhetoric when the
Continuator says, 'Datur ejus dominio corona Angliæ,' and when the author of the
Gesta (75) speaks of 'regisque castello, et regni coronâ, quam semper
ardentissime affectârat, ... in deliberationem suam contraditis,' and adds that
Henry 'dominam et reginam acclamare præcepit.' The Waverley Annalist, 1141,
ventures to say, 'Corona regni est ei tradita.'"[197]
"Only rhetoric." Ah, how easily could history be written, if one
could thus dispose of inconvenient evidence! So far from being
"rhetoric," it is precisely because these statements are so strictly
matter-of-fact that the writer failed to grasp their meaning. Had he
known, or remembered, that the royal crown was preserved in the
royal treasury, the passage by which he is so sorely puzzled would
have proved simplicity itself.[198]
Here again, light is thrown on these events and on the action of
the Empress by the precedent in the case of her father (1100), who,
on the death of his brother, hastened to Winchester Castle ("ubi
regalis thesaurus continebatur"), which was formally handed over to
him with all that it contained ("arx cum regalibus gazis filio regis
Henrico reddita est").[199]
We have yet to consider the passage from the Gesta, to which Mr.
Birch so confidently appeals, and which is dismissed by Mr. Freeman
as "rhetoric." The passage runs:—
"In publica se civitatis et fori audientia dominam et reginam acclamare
præcepit."[200]
By a strange coincidence it has been misconstrued by both writers
independently. Mr. Freeman, as we saw, takes "præcepit" as
referring to Henry himself, and so does Mr. Birch.[201] Though the
sentence as a whole may be obscure, yet the passage quoted is
quite clear. The words are "præcepit se," not "præcepit illam." Thus
the proclamation, if made, was the doing of the Empress and not of
the legate. Had the legate been indeed responsible, his conduct
would have been utterly inconsistent. But as it is, the difficulty
vanishes.[202]
To the double style, "domina et regina," I have made reference
above. My object now is to examine this assumption of the style
"regina" by the Empress. It might perhaps be urged that the author
of the Gesta cannot here be implicitly relied on. His narrative,
however, is vigorous and consistent; it is in perfect harmony with the
character of the Empress; and so far as the assumption of this style
is concerned, it is strikingly confirmed by that Oxford charter, to
which we are now coming. After her election (April 8), the Empress
might claim, as queen elect, the royal title, but if that were
excusable, which is granting much, its assumption before her
election could admit of no defence. Yet, headstrong and impetuous,
and thirsting for the throne, she would doubtless urge that her rival's
fall rendered her at once de facto queen. But this was as yet by no
means certain. Stephen's brother, as we know, was talked of, and
the great nobles held aloof. The Continuator, indeed, asserts that at
Winchester (March) were "præsules pene totius Angliæ, barones
multi, principes plurimi" (p. 130), but William, whose authority is
here supreme, does not, though writing as a partisan of the
Empress, make any allusion to their presence.[203] Moreover, the
primate was still in doubt, and of the five bishops who were present
with the legate, three (St. David's, Hereford, and Bath) came from
districts under the influence of the Empress, while the other two
(Lincoln and Ely) were still smarting beneath Stephen's action of two
years before (1139).
The special interest, therefore, of this bold proclamation at
Winchester lies in the touch it gives us of that feminine impatience
of the Empress, which led her to grasp so eagerly the crown of
England in her hands, and now to anticipate, in this hasty manner,
her election and formal coronation.[204]
Within a few days of her reception at Winchester, she retraced her
steps as far as Wilton, where it was arranged that she should meet
the primate, with whom were certain bishops and some lay folk.[205]
Theobald, however, professed himself unable to render her homage
until he had received from the king his gracious permission to do so.
[206]For this purpose he went on to Bristol, while the Empress made
her way to Oxford, and there spent Easter (March 30th).[207] We
must probably assign to this occasion her admission to Oxford by
Robert d'Oilli.[208] The Continuator, indeed, assigns it to May, and in
this he is followed by modern historians. Mr. Freeman, for instance,
on his authority, places the incident at that stage,[209] and so does
Mr. Franck Bright.[210]
But the movements of the Empress, at this stage, are really
difficult to determine. Between her presence at Oxford (March 30)
[211] and her presence at Reading (May 5-7),[212] we know nothing for
certain. One would imagine that she must have attended her own
election at Winchester (April 7, 8), but the chroniclers are silent on
the subject, though they, surely, would have mentioned her
presence. On the whole, it seems most probable that the
Continuator must be in error, when he places the adhesion of Robert
d'Oilli so late as May (at Reading) and takes the Empress
subsequently to Oxford, as if for the first time.
It was, doubtless, through her "brother" Robert "fitz Edith" that
his step-father, Robert d'Oilli, was thus won over to her cause. It
should be noted that his defection from the captive king is pointedly
mentioned by the author of the Gesta, even before that of the
Bishop of Winchester, thus further confirming the chronology
advanced above.[213] At Oxford she received the submission of all the
adjacent country,[214] and also executed an important charter. This
charter Mr. Birch has printed, having apparently collated for the
purpose no less than five copies.[215] Its special interest is derived
from the fact that not only is it the earliest charter she is known to
have issued after Stephen's fall (with the probable exception of that
to Thurstan de Montfort), but it is also the only one of her charters
in which we find the royal phrases "ecclesiarum regni mei" and
"pertinentibus coronæ meæ." Mr. Birch writes of its testing clause
("Apud Oxeneford Anno ab Incarnatione Domini MC.
quatragesimo"):
The date of this charter is very interesting, because it is the only example of an
actual date calculated by expression of the years of the Incarnation, which occurs
among the entire series which I have been able to collect.... Now, as the historical
year in these times commenced on the 25th of March, there is no doubt but that
this charter was granted to the Abbey of Hulme at some time between the 3rd and
the 25th of March, A.D. 1140-41.[216]
Mr. Eyton has also independently discussed it (though his remarks
are still in MS.), and detects, with his usual minute care, a difficulty,
in one of the three witnesses, to which Mr. Birch does not allude.
"St. Benet of Hulme.
"The date given (1140) seems to combine with another circumstance to lead to
error. Matilda's style is 'Matild' Imp. H. regis filia,' not, as usual, 'Anglorum domina.'
One might therefore conclude that the deed passed before the battle of Lincoln,
and so in 1140. However, this conclusion would be wrong, for though Matᵃ does
not style herself Queen, she asserts in the deed Royal rights and speaks of
matters pertaining 'coronæ meæ.' But we do not know that Maud was ever in
Oxford before Stephen's captivity, nor can we think it. Again, it is certain that Robᵗ
de Sigillo did not become Bishop of London till after Easter, 1141, for at Easter,
1142, he expressly dates his own deed 'anno primo pontif' mei.' He was almost
certainly appointed when Maud was in London in July, 1141, for he attests Milo's
patent of earldom on July 25."[217]
The omission of the style "Anglorum domina" is, however, strictly
correct, and not, as Mr. Eyton thought, singular. For it was not till her
election on the 8th of April that she became entitled to use this
style. As for her assumption of the royal phrases, it is here simply
ultra vires. Then, as to the attesting bishop ("R. episcopo
Londoniensi"), his presence is natural, as he was a monk of Reading,
and his position would seem to be paralleled by that of his
predecessor Maurice, who appears as bishop in the Survey, though,
probably, only elect. As her father "gave the bishopric of Winchester"
the moment he was elected, and before he was crowned,[218] so the
Empress "gave," it would seem, the see of London to Robert "of the
Seal," even before her formal election—an act, it should be noted,
thoroughly in keeping with her impetuous assumption of the regal
style. Besides the bishop and the Earl of Gloucester, there is a third
witness to this charter—"Reginaldo filio Regis." No one, it seems, has
noticed the fact that here alone, among the charters of the Empress,
Reginald attests not as an earl, which confirms the early date
claimed for this charter. A charter which I assign to the following
May is attested by him: "Reginaldo comite filio regis." This would
seem to place his creation between the dates of these charters, i.e.
circ. April (1141).[219] To sum up, the evidence of this charter is in
complete agreement with that of William of Malmesbury, when he
states that the Empress spent Easter (March 30) at Oxford; and we
further learn from it that she must have arrived there at least as
early as the 24th of March.
The fact that Mr. Freeman, in common with others, has overlooked
this early visit of the Empress in March, is no doubt the cause of his
having been misled, as I have shown, by the Continuator's
statement.
The Assembly at Winchester took place, as has been said, on the
7th and 8th of April. William of Malmesbury was present on the
occasion, and states that it was attended by the primate "and all the
bishops of England."[220] This latter phrase may, however, be
questioned, in the light of subsequent charter evidence.
The proceedings of this council have been well described, and are
so familiar that I need not repeat them. On the 7th was the private
conclave; on the 8th, the public assembly. I am tempted just to
mention the curiously modern incident of the legate (who presided)
commencing the proceedings by reading out the letters of apology
from those who had been summoned but were unable to be present.
[221] On the 8th the legate announced to the Assembly the result of
the previous day's conclave:—

"filiam pacifici regis ... in Angliæ Normanniæque dominam eligimus, et ei fidem
et manutenementum promittimus."[222]
On the 9th, the deputation summoned from London arrived and
was informed of the decision; on the 10th the assembly was
dissolved.
The point I shall here select for discussion is the meaning of the
term "domina Angliæ," and the effect of this election on the position
of the Empress.
First, as to the term "domina Angliæ." Its territorial character must
not be overlooked. In the charters of the Empress, her style "Ang'
domina" becomes occasionally, though very rarely, "Anglor' domina,"
proving that its right extension is "Anglorum Domina," which differs,
as we have seen, from the chroniclers' phrase. The importance of
the distinction is this. "Rex" is royal and national; "dominus" is feudal
and territorial. We should expect, then, the first to be followed by
the nation ("Anglorum"), the second by the territory ("Angliæ"). But,
in addition to its normal feudal character, the term may here bear a
special meaning.
It would seem that the clue to its meaning in this special sense
was first discovered by the late Sir William (then Mr.) Hardy ("an
ingenious and diligent young man," as he was at the time described)
in 1836. He pointed out that "Dominus Anglie" was the style adopted
by Richard I. "between the demise of his predecessor and his own
coronation."[223] Mr. Albert Way, in a valuable paper on the charters
belonging to Reading Abbey, which appeared some twenty-seven
years later,[224] called attention to the styles "Anglorum Regina" and
"Anglorum Domina," as used by the Empress.[225] As to the former,
he referred to the charter of the Empress at Reading, granting lands
to Reading Abbey.[226] As to the latter ("Domina Anglorum"), he
quoted Mr. Hardy's paper on the charter of Richard I., and urged
that "the fact that Matilda was never crowned Queen of England
may suffice to account for her being thus styled" (p. 283). He further
quoted from William of Malmesbury the two passages in which that
chronicler applies this style to the Empress,[227] and he carefully
avoided assigning them both to the episode of the 2nd of March.
Lastly, he quoted the third passage, that in the Gesta Stephani.
Mr. Birch subsequently read a paper "On the Great Seals of King
Stephen" before the Royal Society of Literature (December 17,
1873), in which he referred to Mr. Way's paper, as the source of one
of the charters of which he gave the text, and in which he embodied
Mr. Way's observations on the styles "Regina" and "Domina."[228] But
instead, unfortunately, of merely following in Mr. Way's footsteps, he
added the startling error that Stephen was a prisoner, and Matilda
consequently in power, till 1143. He wrote thus:—
"Did the king ever cease to exercise his regal functions? Were these functions
performed by any other constitutional sovereign meanwhile? The events of the
year 1141 need not to be very lengthily discussed to demonstrate that for a brief
period there was a break in Stephen's sovereignty, and a corresponding
assumption of royal power by another ruler unhindered and unimpeached by the
lack of any formality necessary for its full enjoyment.... William of Malmesbury,
writing with all the opportunity of an eye-witness, and moving in the royal court at
the very period, relates at full length in his Historia Novella (ed. Hardy, for
Historical Society, vol. ii. p. 774[229]), the particulars of the conference held at
Winchester subsequent to the capture of Stephen after the battle of Lincoln, in the
early part of the year, 4 Non. Feb. A.D. 1141.... This election of Matilda as Domina
of England in place of Stephen took place on Sunday, March 2, 1141.... Until the
liberation of the king from his incarceration at Bristol, as a sequel to the battle at
Winchester in A.D. 1143, so disastrous to the hopes of the Empress, she held her
position as queen at London. The narrative of the events of this period, as given
by William of Malmesbury in the work already quoted, so clearly points to her
enjoyment of all temporal power needed to constitute a sovereign, that we must
admit her name among the regnant queens of England" (pp. 12-14).
Two years later (June 9, 1875), Mr. Birch read a paper before the
British Archæological Association,[230] in which, in the same words,
he advanced the same thesis.
The following year (June 28, 1876), in an instructive paper read
before the Royal Society of Literature,[231] Mr. Birch wrote thus:—
"As an example of new lights which the study of early English seals has thus
cast upon our history (elucidations, as it were, of facts which have escaped the
keen research of every one of our illustrious band of historians and chroniclers for
upwards of seven hundred years), an examination into the history of the seal of
Mathildis or Maud, the daughter and heiress of King Henry I. (generally known as
the Empress Maud, or Mathildis Imperatrix, from the fact of her marriage with the
Emperor Henry V. of Germany), has resulted in my being fortunately enabled to
demonstrate that royal lady's undisputed right to a place in all tables or schemes
of sovereigns of England; nevertheless it is, I believe, a very remarkable fact that
her position with regard to the throne of England should have been so long, so
universally, and so persistently ignored, by all those whose fancy has led them to
accept facts at second hand, or from perfunctory inquiries into the sources of our
national history rather than from careful step-by-step pursuit of truth through
historical tracks which, like indistinct paths in the primæval forest, often lead the
wanderer into situations which at the outset could not have been foreseen. In a
paper on this subject which I prepared last year, and which is now published in the
Journal of the British Archæological Association, I have fully explained my views of
the propriety of inserting the name of Mathildis or Maud as Queen of England into
the History Tables under the date of 1141-1143; and as this position has never as
yet been impugned, we may take it that it is right in the main; and I have shown
that until the liberation of King Stephen from his imprisonment at Bristol, as a
sequel to the battle at Winchester in 1143 (so disastrous to the prospects of
Mathildis), she held her position as queen, most probably at London....
"Now, I have introduced this apparent digression in this place to point to the
importance of the study of historical seals, for my claim to the restoration of this
queen's name is not due so much to my own researches as it is to the
unaccountable oversight of others."[232]
I fear that, notwithstanding Mr. Birch's criticism on all who have
gone before him, a careful analysis of the subject will reveal that the
only addition he has made to our previous knowledge on this
subject, as set forth in Mr. Way's papers, consists in two original and
quite incomprehensible errors: one of them, the assigning of Maud's
election to the episode of the 2nd and 3rd of March, instead of to
that of the 7th and 8th of April (1141); the other, the assigning of
Stephen's liberation to 1143 instead of 1141. When we correct these
two errors, springing (may we say, in Mr. Birch's words?) "from
perfunctory inquiries into the sources of our national history rather
than from careful step-by-step pursuit of the truth," we return to the
status quo ante, as set forth in Mr. Way's paper, and find that "the
unaccountable oversight," by all writers before Mr. Birch, of the fact
that the Empress "held her position as queen," for more than two
years, "most probably at London," is due to the fact that her said
rule lasted only a few months, or rather, indeed, a few weeks, while
in London itself it was numbered by days.
But though it has been necessary to speak plainly on Mr. Birch's
unfortunate discovery, one can probably agree with his acceptance
of the view set forth by Mr. Hardy, and espoused by Mr. Way, that
the style "domina" represents that "dominus" which was used as "a
temporary title for the newly made monarch during the interval
which was elapsing between the death of the predecessor and the
coronation day of the living king."[233] To Mr. Hardy's instance of
Richard's style, "Dominus Angl[iæ]," August, 1189, we may add, I
presume, that of John, "Dominus Angliæ," April 17th and 29th,
(1199).[234] Now, if this usage be clearly established, it is certainly a
complete explanation of a style of which historians have virtually
failed to grasp the relevance.
But a really curious parallel, which no one has pointed out, is that
afforded in the reign immediately preceding this, by the case of the
king's second wife. Great importance is rightly attached to "the
election of the Empress as 'domina Angliæ'" (as Dr. Stubbs describes
it[235]), and to the words which William of Malmesbury places in the
legate's mouth;[236] and yet, though the fact is utterly ignored, the
very same formula of election is used in the case of Queen "Adeliza,"
twenty years before (1121)!
The expression there used by the Continuator is this: "Puella
prædicta, in regni dominam electa, ... regi desponsatur" (ii. 75).
That is to say that before her marriage (January 29) and formal
coronation as queen (January 30) she was elected, it would seem,
"Domina Angliæ." The phrase "in regni dominam electa" precisely
describes the status of the Empress after her election at Winchester,
and before that formal coronation at Westminster which, as I
maintain, was fully intended to follow. We might even go further still,
and hold that the description of Adeliza as "futuram regni dominam,"
[237] when the envoys were despatched to fetch her, implies that she
had been so elected at that great Epiphany council, in which the

king "decrevit sibi in uxorem Atheleidem."[238] But I do not wish to
press the parallel too far. In any case, precisely as with the Empress
afterwards, she was clearly "domina Angliæ" before she was
crowned queen. And, if "electa" means elected, the fact that these
two passages, referring to the two elections (1121 and 1141), come
from two independent chronicles proves that the terms employed
are no idiosyncracy, but refer to a recognized practice of the highest
constitutional interest.
Of course the fact that the same expression is applied to the
election of Queen "Adeliza" as to that of the Empress herself,
detracts from the importance of the latter event, regarded as an
election to the throne.
At the same time, I hold that we should remember, as in the case
of Stephen, the feudal bearing of "dominus." For herein lies its
difference from "Rex." The "dominatus" of the Empress over England
is attained step by step.[239] At Cirencester, at Winchester, at Oxford,
she becomes "domina" in turn.[240] Not so with the royal title. She
could be "lady" of a city or of a man: she could be "queen" of
nothing less than England.
I must, however, with deep regret, differ widely from Mr. Birch in
his conclusions on the styles adopted by the Empress. These he
classes under three heads.[241] The second ("Mathildis Imperatrix
Henrici regis filia et Anglorum regina") is found in only two charters,
which I agree with him in assigning "to periods closely consecutive,"
not indeed to the episode of March 2 and 3, but to that of April 7
and 8. Of his remaining twenty-seven charters, thirteen belong to his
first class and fourteen to his third, a proportion which makes it hard
to understand why he should speak of the latter as "by far the most
frequent."
Of the first class ("Mathildis Imperatrix Henrici Regis filia") Mr.
Birch writes:—
"It is most probable that these documents are to be assigned to a period either
before the death of her father, King Henry I., or at most to the initial years of
Stephen, before any serious attempt had been made to obtain the possession of
the kingdom."
Now, it is absolutely certain that not a single one of them can be
assigned to the period suggested, that not one of them is previous
to that 2nd of March (1141) which Mr. Birch selects as his turning-
point, still less to "the death of her father" (1135). Nay, on Mr.
Birch's own showing, the first and most important of these
documents should be dated "between the 3rd of March and the 24th
of July, A.D. 1141" (p. 380), and two others (Nos. 21, 28) "must be
ascribed to a date between 1149 and 1151" (p. 397 n.). Nor is even
this all, for as in two others the son of the Empress is spoken of as
"King Henry," they must be as late as the reign of Henry II.
So, also, with the third class ("Mathildis Imperatrix Henrici regis
filia et Anglorum domina"), of which we are told that it—
"was in the first instance adopted—I mean used—in those charters which
contain the word and were promulgated between A.D. 1135 and A.D. 1141, by
reason of the ceremony of coronation not yet having been performed; and with
regard to those charters which are placed subsequent to A.D. 1141, either because
the ceremony was still unperformed, although she had the possession of the
crown, or because of some stipulation with her opponents in power" (p. 383).
Here, again, it is absolutely certain that not a single one of these
charters was "promulgated between A.D. 1135 and A.D. 1141." We
have, therefore, no evidence that the Empress, in her charters,
adopted this style until the election of April 7 and 8 (1141) enabled
her justly to do so. But the fact is that Mr. Birch's theory is not only
based, as we have seen, on demonstrably erroneous hypotheses,
but must be altogether abandoned as opposed to every fact of the
case. For the two styles which he thus distinguishes were used at
the same time, and even in the same document. For instance, in the
very first of Mr. Birch's documents, that great charter to Geoffrey de
Mandeville, to which we shall come, in the next chapter, issued at
the height of Matilda's power, and on the eve, as we shall see, of her
intended coronation, "Anglorum domina" is omitted from her style,
and the document is therefore, by Mr. Birch, assigned to the first of
his classes. Yet I shall show that in a portion of the charter which
has perished, and which is therefore unknown to Mr. Birch, her style
is immediately repeated with the addition "Anglorum Domina." It is
clear, then, on Mr. Birch's own showing, that this document should
be assigned both to his first and to his third classes, and,
consequently, that the distinction he attempts to draw has no
foundation in fact.
Mr. Birch's thesis would, if sound, be a discovery of such
importance that I need not apologize for establishing, by
demonstration, that it is opposed to the whole of the evidence which
he himself so carefully collected. And when we read of Stephen's
"incarceration at Bristol, which was not terminated until the battle of
Winchester in A.D. 1143, when the hopes of the Empress were
shattered" (p. 378), it is again necessary to point out that her flight
from Winchester took place not in 1143, but in September, 1141. Mr.
Birch's conclusion is thus expressed:—
"We may, therefore, take it as fairly shown that until the liberation of the king
from his imprisonment at Bristol (as a sequel to the battle at Winchester in A.D.
1143, so disastrous to the queen's hopes) she held her position, as queen, most
probably at London," etc. (p. 380).
Here, as before, it is needful to remember that the date is all
wrong, and that the triumph of the Empress, so far from lasting two
years or more, lasted but for a few months of the year 1141, in the
course of which she was not at London for more than a few days.
And now let us turn to my remaining point, "the effect of this
election on the position of the Empress."
To understand this, we must glance back at the precedents of the
four preceding reigns. The Empress, as I have shown, had followed
these precedents in making first for Winchester: she had still to
follow them in securing her coronation and anointing at Westminster.
It is passing strange that all historians should have lost sight of this
circumstance. For the case of her own father, in whose shoes she
claimed to stand, was the aptest precedent of all. As he had been
elected at Winchester, and then crowned at Westminster, so would
she, following in his footsteps. The growing importance of London
had been recognized in successive coronations from the Conquest,
and now that it was rapidly supplanting Winchester as the destined
capital of the realm, it would be more essential than ever that the
coronation should there take place, and secure not merely the
prestige of tradition, but the assent of the citizens of London.[242]
It has not, however, so far as I know, occurred to any writer that it
was the full intention of the Empress and her followers that she
should be crowned and anointed queen, and that, like those who
had gone before her, she should be so crowned at Westminster. It is
because they failed to grasp this that Dr. Stubbs and Mr. Freeman
are both at fault. The former writes:—
"Matilda became the Lady of the English; she was not crowned, because
perhaps the solemn consecration which she had received as empress sufficed, or
perhaps Stephen's royalty was so far forth indefeasible."[243]
"No attempt was made to crown the Empress; the legate simply proposes that
she should be elected Lady of England and Normandy. It is just possible that the
consecration which she had once received as empress might be regarded as
superseding the necessity of a new ceremony of the kind, but it is far more likely
that, so long as Stephen was alive and not formally degraded, the right conferred
on him by coronation was regarded as so far indefeasible that no one else could
be allowed to share it."[244]
Dr. Stubbs appears here to imply that we should have expected
her coronation to follow her election. And in this he is clearly right.
Mr. Freeman, however, oddly enough, seems to have looked for it
before her election. This is the more strange in a champion of the
elective principle. He writes thus of her reception at Winchester, five
weeks before her election:—
"If Matilda was to reign, her reign needed to begin by something which might
pass for an election and coronation. But her followers, Bishop Henry at their head,
seem to have shrunk from the actual crowning and anointing ceremonies, which—
unless Sexburh had, ages before, received the royal consecration—had never,
either in England or in Gaul, been applied to a female ruler. Matilda was solemnly
received in the cathedral church of Winchester; she was led by two bishops, the
legate himself and Bernard of St. David's, as though to receive the crown and
unction, but no crowning and no unction is spoken of."[245]
At the same time, he recurs to the subject, after describing the
election, thus:—
"Whether any consecration was designed to follow, whether at such
consecration she would have been promoted to the specially royal title, we are not
told."[246]
But all this uncertainty is at once dispelled when we learn what
was really intended. Taken in conjunction with the essential fact that
"domina" possessed the special sense of the interim royal title, the
intention of the Empress to be crowned at Westminster, and so to
become queen in name as well as queen in deed, gives us the key to

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British Library Cataloguing-in-Publication Data

Table of Legislation xxvii

Chapter 1 The Nature of Contract Law 1

Chapter 2 Sources of Hong Kong Contract Law 21

Chapter 5 Intention to Create Legal Relations 109

Chapter 6 Contractual Capacity 119

Chapter 7 Formality 133

Chapter 8 Contractual Terms 145

Chapter 9 Misrepresentation 191

Chapter 10 Mistake 221

Chapter 11 Duress and Undue Inuence 249

Chapter 12 Unconscionability 283

Chapter 13 Illegal Contracts 291

Chapter 14 Termination of contracts 323

Chapter 15 Remedies for Breach of Contract 357

Chapter 16 Privity of Contract 393

Appendix 1 Glossary of Terms 411

BCCI v Aboody 263

Bradford v Robinson Rentals 364

CCC Films (London) Ltd v Impact Quadrant Films Ltd 374

Chesneau v Interholme 214

De La Bere v Pearson 83–4, 359

East v Maurer 213

Faccenda Chicken v Fowler 311

HKSAR v Ma Wai Kwan David and Others 28

Hang Seng Credit Card Ltd v Tsang Nga Lee 286–7

Hurst Stores and Interiors v M l Europe Property 243

ING Bank NV v Tsui Tsin Tong 256

Jackson & another v Royal Bank of Scotland plc 361

Kao Lee & Yip v Edwards 314–5, 318–9, 321

Lagden v O’Connor 359

Maritime National Fish Ltd v Ocean Trawlers 347–8

OTB International Credit Card Ltd v Au Sai Chak, Michael 289

Page One Records Ltd v Britton & others 389–90

Parker v Taswell 136

Ritchie v Atkinson 328

Safehaven Investments Inc v Springbok Ltd 338

Smith v Wilson 151, 154

TSB Bank plc v Cameld 279

Thomson v Christie Manson & Woods Ltd & others 211

U.B.C (Construction) Ltd v Sung Foo Kee Ltd 17, 92–3

Vastfame Camera Ltd v Birkart Globistics Ltd et al 176

Weeks v Tybald 117, 200

Yates Building Co Ltd v Pulleyn & Sons (York) Ltd 54–5

Age of Majority (Related Provisions) Ordinance (Cap 410)