Introduction to Business Law: Judicial Precedent Essay

Judicial precedent

Judicial precedent at times is called legal citation is not confined to case law statutes, ordinances, regulations and administrative rulings also include in this wide canopy. Disclosure of the latter may be of greater practical importance, especially if it would be more difficult for the tribunal to discover on its own. What constitutes a controlling jurisdiction can be a complicated question. On questions of federal law, U.S. Supreme Court precedent is obviously controlling, as are cases from the federal circuit in which you are litigating. As for state law, regardless of the court, you are in, you are obliged to cite directly adverse authority from the jurisdiction whose law the court is applying. In addition, if you are urging the court to adopt or rely upon the law from other jurisdictions, the duty of candor requires disclosure of directly adverse authority from those jurisdictions as well. The disclosure obligation is not limited to adverse appellate decisions—the rule requires disclosure of any adverse authority in the controlling jurisdiction, not just controlling authority (Sealy, 2000).

American Bar Association Formal Opinion 280 (June 1949), which is still relevant today, provides a few questions to ask when you find directly adverse authority:

Is the decision which opposing counsel has overlooked one which the court should clearly consider in deciding a case? Would a reasonable judge properly feel that a lawyer who advanced as the law a proposition adverse to the undisclosed decision was lacking in candor and fairness to him? Might the judge consider himself misled by an implied representation that the lawyer knew of no adverse authority?

Some courts have evenly maintained that a lawyer’s duty of candor to the court must always prevail in any conflict with the duty of zealous advocacy while representing its client. At this standstill, some equilibrium must be wracked between the two ethical obligations. Under the Model Rule 3.3 cmt. 3, ‘a lawyer is not required to make a disinterested exposition of the law, but must recognize the existence of pertinent legal authority’. Counsel for an appellee; for instance, does not require disclosing the fact that he could find no case law to argue confirmation of a fact adjudged by the lower court. The rules do not endorse; a requirement that the lawyer, in addition to advocating the cause of his client, steps first into the shoes of opposing counsel to find all potentially contrary authority, and finally into the robes of the judge to decide whether the authority is indeed contrary or whether it is distinguishable”.

If the candor towards tribunal is taken into consideration, then according to 27 NCAC 02 rule 3.3, (Macdonald and Koffman, 2007)

A lawyer shall not knowingly

1. Make a false statement of material fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;
2. fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or
3. offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, other than the testimony of a defendant in a criminal matter that the lawyer reasonably believes is false.

In deciding disputes of inferior courts follow the decision of the higher courts if cases involving similar facts of law and points of law come before them. It must be noted at this stage that it is not the entire judgment that is a binding precedent. It is only that part that constitutes the ratio decidendi (reasons for the decision) and the rest of the judgment is not binding. Sometimes a may have said things which are strictly relevant to the final judgment. Such remarks are known as obiter dicta (remarks made by the way) and do not create any binding precedent. However, an obiter dictum is not altogether destitute of legal consequences; it creates a persuasive authority when there is no binding precedent available.

Declaratory precedent: Where a judge applies an already existing principle to the case before him for his judgment, his decision is a declaratory precedent. But if no applicable legal principle exists, the judge creates a new rule of law to govern the facts before him, and this may act as a future precedent for the judges of the inferior courts.

The decisions of the High Court bind the courts inferior to it as magistrates’. A High Court judge is bound by the decision of the Court of Appeal, but he is not absolutely bound to follow the previous decisions of other High Court judges. In actual practice, he will nearly always do so unless convinced that the other judge was wrong. The magistrates’ court is bound by all superior courts, but they themselves do not create binding precedent, and their judgments are not reported in the Law Reports.

It should be noted that the decisions of superior courts are not strictly binding but are usually followed in similar cases unless they are found not compatible with the situation in question.

Advantages of case law are

1. Certainty: The maxim of stare decisis (to stand by the decision already made) has contributed certainty and consistency in the development of the rules of law. The strict requirement of following the precedent of the superior courts also relieves the judges for their decisions.
2. Possibility of growth: Case law grows out of the practical problems and thus it keeps pace with the changing needs of society.
3. Rich in detail: Each principle of law or equity is supported by elaborate judgments of distinguished judges. These are tremendous values to judges, lawyers and students of law who understand, appreciate and apply to the practical problems facing them.

Disadvantages are

1. Rigidity: Since the decision of the superior courts binds the inferior ones, it apparently destroys the original thinking of a judge of an inferior court as he is restricted from using his own reasons for giving a different judgment. In actual practice, a judge of an inferior court can refuse to apply a precedent where he feels that it may lead to injustice in the case before him. He may refuse to follow the past decision on the following grounds:
   1. By distinguishing the fact, i.e. the case before him does not fall within the ratio decidendi of an earlier case and there exists some material difference between the facts of these two cases.
   2. By proving that the superior court had omitted to consider the provision of some relevant Act or some other earlier decision which was binding on it. Such a decision of the superior court is known as ‘per incuriam’.
2. Over-subtlety: The concept of precedent has led judges sometimes to create artificial distinctions to avoid following an earlier decision.
3. Bulk and complexity: Much of the case law is contained in voluminous law reports dating back to the Middle Ages. These reports have to be constantly referred to by those who are connected with the administration of justice. For these reasons, a great volume of case law has now been embodied in statutes.

Case

There must be offer and acceptance. Offer and acceptance have the following rules:

• An offer may be made to a specific person or to any member of a group of persons or to the world at large, but it cannot form the basis of a contract until it has been accepted by an ascertained person or groups of persons.
• An offer may be made by word of mouth in writing or by conduct.
• An offer must contemplate giving rise to legal consequences if accepted.
• The terms of the offer must be certain and free from vagueness in expression.
• Every offer must be communicated; for a contract to arise, two parties must be of the same mind, and so it cannot be accepted by a person who does not know that it has been made. This applies to both specific and general offers.
• The offeror may attach any conditions to his offer but must communicate them to the offeree before they bind him by his acceptance of the offer. In commercial agreement, this rule is chiefly important where the terms of the offer are usually of a complex nature (Graw S., 178-201).

Facts

The person advertised in the newspaper for a reward to anyone who gets his dog. A shepherd found the dog when the offer had elapsed.

Legal Issues Involved

This is a case of offer and acceptance. In order to be an enforceable contract, certain basic requirements must be present. There must be an agreement based upon genuine consent of the parties, supported by consideration and made for a lawful object between competent parties. The rules of an offer include:

An offer may be made to a specific person or to any member of a group of persons or to the world at large, but it cannot form the basis of a contract until it has been accepted by an ascertained person or group of persons. If A makes an offer to B, it is a specific offer and B is the only person who can accept it. But in many cases, it is immaterial to whom the offer is made. Offers made by an advertisement are the commonest form of offers made to the world at large and can be accepted by anyone just by acting on them (Gower and Davies, 2006).

Carilil V Carbolic Smoke Ball Co, 1893

The defendants offered a reward of $ 100 to anyone who contracted influenza after using their smoke ball for a fortnight. The plaintiff, relying on the advertisement, bought the smoke ball and used it as prescribed, but still contracted influenza. She sued for the advertised reward. Held that the defendant was a true offer, and not a mere advertising puff, and the defendants were liable to pay the reward.

An offer may be made by word of mouth, in writing or by conduct. The person making the offer is called the offeror, and the person to whom the offer is made is called the offeree. A common example of the offer by conduct may be omnibus plying on a particular route. It is an offer by the owner of the bus to carry passengers at the published fares for various stages. The offer is accepted by conduct when a passenger boards the bus with the intention of becoming a passenger(Gower and Davies, 2006).

An offer must contemplate giving rise to legal consequences if accepted. The terms of the offer must be certain and free from vagueness in expression. L bought a horse from G, and offered to pay another 5 for the horse if it proved lucky to him. Held the term “lucky” was too vague to form the basis of a legally enforceable agreement.

Every offer must be communicated; for a contract to arise, two parties must be of the same mind, and so it cannot be accepted by a person who does not know that it has been made. This applies to both specific and general offers. Thus where A, without knowing that a reward is offered, finds B’s lost dog and brings it to B, he cannot recover the reward if he learns of the reward after returning the dog(Gower and Davies, 2006).

R V Clarke, 1927

A reward was advertised for information leading to the arrest of the two murderers of two police officers, and a free pardon if the person giving the information was an accomplice. C gave the information. Held C was not entitled to a government reward because at the time the information was given by him he had forgotten all about the reward d.

The offeror cannot bind the other party without his consent(Gower and Davies, 2006).

Fleethouse V Bindley, 1862

F wrote to his nephew offering to buy one of his horses adding: if I hear no more about him I consider that the horse is mine $ 30.15 shillings”.

The nephew did not reply, but told Bindley, an auctioneer, to keep the horse out of the sale of this farm stock as it was sold to the plaintiff.

Bindley sold the horse by mistake and F sued him for damages. Held that as the nephew had never communicated his acceptance to F, there was no contract of sale, and so the auctioneer was not liable.

The offeror may attach any conditions to his offer but must communicate them to the offeree before they bind him by his acceptance of the offer. In commercial agreement, this rule is chiefly important where the terms of the offer are usually of a complex nature.

An offer must be distinguished from:

1. An invitation to treat
2. A mere declaration of an intention
3. A mere supply of information

Marked prices of goods displayed in shop windows or catalogs mentioning prices of goods at the market prices. The prospective buyer, by offering that price is himself the offeror and his offer, if accepted, creates a binding agreement(Sealy, 2000).

Pharmaceutical Society of Britain V Boots Chemist, 1953

Goods were sold in B’s shop under the self-service system. Customers selected their purchases from the shelves, put them into baskets supplied by B and took them to the cash desk where they paid the price. Held the customer made the offer when he presented them at the cash desk, and not when he removed them from the shelves.

Fisher V Bell, 1961

B, a shopkeeper, displayed a flick knife priced at four shillings in his shop window. He was charged with offering for sale an offensive weapon contrary to the Restriction of Offensive weapons Act. Held that mere display of the goods in a shop window is not by itself an offer for sale. B was not bound to sell the knife to nay one entering his shop and offering him four shillings(Sealy, 2000).

Declaration of importance

Where a person expresses or declares his intention to do a thing or an act, it does not bind him to another person who suffers damage because he fails to carry out his intention despite the fact that someone relied on his declaration and acted on it(Gower and Davies, 2006).

Harris V Nickerson, 1873

N, an auctioneer, advertised that there would be a sale of office furniture.

H, a prospective buyer, traveled from London to attend the sale, but all the office furniture was withdrawn. H thereupon sued the auctioneer for the loss of time and travel expenses. Held that the auctioneer was not bound to sell not making an offer which my acceptance could is turned into a contract.

The mere statement of the lowest price at which a person will sell property or goods contains no implied condition to sell at that price to the person making such inquiry (Sealy, 2000).

Harvey V Facey, 1893

In this case, H telegraphed to F: “will you sell Bumper Hall pen?

Telegraph lowest cash price” F, replied: “lowest cash price for Bumper Hall pen is $ 900”. H Telegraphed back “we agree to buy for $ 900 asked by you. F refused to sell and H sued him contending that a telegram constituted a binding contract. It was held that H was not entitled to damages as in replying, he was merely stating the lowest cash price and not making an offer.

Revocation

Offer may be terminated by revocation i.e an offer may be revoked by the person who has made it at any time before it has been accepted. A bid at an auction is revocable until the hammer falls.

Where the offeror promises orally or in writing to keep his offer open for a specified time, he is not bound by it i.e he can still revoke it at any time before the expiration of that time unless:

1. The offer has already been accepted
2. The promise to keep the offer open is supported by consideration i.e. the offeree paid some money or money’s worth to the offeror to keep his offer open for a specified period.
3. The promise to keep the offer open was made under seal. A promise under seal does not require consideration.

A promise to keep an offer open for a certain specified time is called an option, and we have seen above that it is not binding on the offeror unless either it is under seal or some consideration has been given for it to the offeror.

Analysis of the Case

From the case, an advert was made to the whole world, not to a specific person. It could be described as an invitation to treat. I will advise Andy that he is not liable for anything.

• if Andy is his young brother the position will be the same if he is at age of entering into a contract.
• if Cassey dies before he is brought then the subject matter of the contract is revoked.

In order to a contract, an offer must be accepted. Where the acceptor various the terms it amounts to a counteroffer and the offer is terminated. I will further advise the sales on various ways in which an enforceable contract can be made. One of the ways is to offer and acceptance without changing terms. The acceptance must also be communicated to the offerer in a manner prescribed by the offeror. Lastly, it must be within the time specified.

List of References

Gower, L, & Davies, P, 2006. Principles of Modern Company Law. New York: Sweet and Maxwell

Macdonald, E, & Koffman, L, 2007. The Law of Contract, Oxford: Oxford University Press.

Sealy, L, C, 2000. Jordans Cases and materials in Company law, London: Butterworth’s Heinemann