I want to start from the basic position in which I was brought up (I expect you were all brought up in it too) that the terms of a contract consist of conditions and warranties, the distinction between them being that the condition is something that is essential to the contract, while the other terms that are collateral or ancillary are merely warranties. If a condition is broken the aggrieved party is discharged from his obligations and can rescind the contract. If it is a warranty that is broken, the breach sounds only in damages.

The Hongkong case—a new approach to breach

The traditional thinking on this point has recently been rather mystified by references to something which is called the fundamental term and which has not yet, so far as I know, been judicially defined. Then there have been some suggestions that what matters is not the fundamental term but the fundamental breach. And finally there is the very important judgment of Diplock L.J. in the Hongkong case in which he opens up new vistas, suggesting that the traditional classification of terms into conditions and warranties has been outmoded and ought to be scrapped in favour of a new approach altogether based on the event.

It must be accepted that whatever sort of approach is made to this topic, whether a new or a traditional one, there must be some way of defining the situation in which the aggrieved party is entitled to rescind. He cannot be allowed to do so for every breach of every term.

Thirty men decide to engage in the business of manufacturing and selling bicycles. They procure the formation, under the Companies (Consolidation) Act, 1908, of the X Bicycle Company, Limited. In the memorandum of association the objects of the company are stated to be: “The manufacture and sale of bicycles.” The associates supply that legal unit with funds through payment of subscriptions to its stock, and the company proceeds to manufacture and sell bicycles. But the company loses money, and, on the recommendation of the directors and with the approval of all the shareholders, the manufacture, of bicycles is stopped, and the funds of the company are employed in maintaining a motor omnibus service between two towns. The driver of one of these omnibuses, while acting within the scope of his employment as prescribed by the directors of the company, by his negligence runs into A, who was at the time in the exercise of due care, and breaks A's leg. The driver is financially irresponsible. A sues the X Bicycle Company, Limited, and that company defends on the ground that maintaining the omnibus service was ultra vires. Should this defence be successful?

InRedland Bricks Ltd. v. Morris Lord Upjohn, in a speech with which all the other Law Lords agreed, asserted that the Court of Appeal had been wrong to consider the applicability of Lord Cairns' Act. Much of the judgments, he observed, had been taken up with a consideration of the principles laid down in Shelfer v. City of London Electric Lighting Co., a case concerned exclusively with the proper principles upon which in practice Lord Cairns' Act should be applied. Neither Lord Cairns' Act nor Shelfer's case, he said in terms, had anything whatever to do with the principles of law appli-cable to the case then before the court. It is accordingly crystal clear that Lord Upjohn regarded Lord Cairns' Act as totally irrelevant: what is less clear is the reason for his opinion.

It is axiomatic that divorcing spouses cannot by agreement oust the jurisdiction of the court to award ancillary relief: Hyman v. Hyman [1929] A.C. 601. Finality can only be achieved by obtaining the sanction of the court in the form of a consent order, invoking a procedure which requires full disclosure of all material factors so that the court can exercise its own discretion on the basis of the information put before it: Matrimonial Causes Act 1973, s.33A; Livesey v. Jenkins [1985] A.C. 424. But out-of-court agreements made by the parties are not without significance. Far from it, they will be treated as a very important consideration should the court subsequently be asked by one of the parties to make an award of ancillary relief, and will not usually be departed from unless there are good and substantial grounds for concluding that injustice will be done by holding the parties to their terms: Edgar v. Edgar [1980] 1 W.L.R. 1410. Presumptive enforceability has been criticised as “the worst of both worlds”, as the parties must go to court to determine whether the agreement they have reached is legally binding: Pounds v. Pounds [1994] 1 F.L.R. 775, 791, per Hoffmann L.J. Either the agreement should bind, or it should be wholly disregarded.

The charge of conspiring to defraud is the most important and frequently employed branch of the law of criminal conspiracy. Yet it has been largely ignored in most general discussions of the law of conspiracy, or at best treated as a special case to be exempted from the general attack on a crime which can only be described as an agreement to act illegally. The reasons for this tacit acceptance are largely pragmatic: the charge is clearly useful in bringing to justice a significant number of persons involved in large-scale frauds who might otherwise escape prosecution. A thorough-going assessment of its place in the criminal law is nonetheless long overdue.