contract rules, yet its process of reasoning is typical of the common law jurist. Bingham LJ starts from within the facts and works outward towards the notion of an ‘expectation’ which, in turn, rather by sleight of hand, becomes a ‘right’ (see Chapter 2). This methodology does not consist of knowing rules and applying them to a set of facts; and if Blackpool does nothing else, it certainly will prove a challenge to those who think that law is amenable to some existing artificial intelligence system. Can a ratio decidendi be drawn out of this decision? 2 Secondly, the case is important because it indicates the central role of the collateral contract in pre-contractual liability problems. Thus, in addition to the possibilities outlined above (in the note after Entores v Miles Far East Corpn), there is the possibility that the court can turn the pre-contractual behaviour into an independent contract in itself. Is the case, in effect, an example of a contract to negotiate? What damage did the plaintiff suffer? Was it caused by the defendants? 3 Thirdly, the case is interesting because of the status of the defendant. No doubt the decision deserves its place in law of obligations books, but one may ask whether its real place is in works on administrative law. The duty attached to the procedures rather than to the transaction, and while Bingham LJ recognised that a contracting party is under no duty to exercise his rights in a reasonable way, he nevertheless seems to be intervening to prevent an abuse of position. Note, also, how Stocker LJ refers to bona fides. Public law, both in the case law and in statute, has recognised for some time now that a public body does not have the same contractual rights and liberties as a private person, particularly at the pre-contract stage (see, for example, R v Eewisham LEC ex p Shell UK [1988] 1 All ER 938). If the defendant had been a private commercial body seeking tenders for a private commercial venture, would the result have been the same? 4 ‘The court should not subvert well understood…principles by adopting a woolly pragmatic solution designed to remedy a perceived injustice on the unique facts of this particular case’ (Bingham LJ). Did not the House of Lords do just this in White v Jones (see p 702)?
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This was an action for damages for misrepresentation and breach of contract brought by disappointed prospective purchasers of a business against the owners of the business who had eventually sold it, not to the plaintiffs, but to a third party. The plaintiffs claimed that the defendants had orally agreed to negotiate only with the plaintiffs and were thus in breach of this ‘lock-out’ agreement when they sold the business to the third party. The trial judge awarded damages for breach of contract and misrepresentation, but a majority of the Court of Appeal allowed an appeal on the breach of contract decision. An appeal to the House of Lords was dismissed.