Chapter 10 Self-test questions

. What is a licence?

It is a property right which is capable of binding third parties.

It is a property right which is not capable of binding third parties.

It is a personal right which is capable of binding third parties.

It is a personal right which is not capable of binding third parties.

. The claimant in Wood v Leadbitter had purchased a ticket to watch the races from the grandstand and enclosure for four days. The court held that this amounted to a contractual licence. On the issue of revocation of licences what did the court hold?

At common law, certain licences are revocable and these include both bare licences and contractual licences.

A contractual licence at common law is irrevocable because it would be unfair to the parties to allow revocation of such licences.

A contractual licence is irrevocable due to the binding nature of the agreement between the parties.

Both contractual licences and licences coupled with an interest are revocable at any time.

. Which of the following statements is TRUE?

With the intervention of equity and the use of equitable remedies, contractual licences are no longer regarded as revocable at will by the licensor.

Equity follows the common law approach towards contractual licences and permits the licensor to revoke the licence at any time.

A contractual licence can be viewed as a licence coupled with an interest. This effectively means that the licensor grants a proprietary right to the licensee and revocation is not possible even if reasonable notice has been given.

Equity will only intervene in situations involving contractual licences, so as to prevent a licensor from revoking a licence which has already taken effect. It will never compel the granting of a new licence.

. Which of the following statements is true?

A contractual licence is a proprietary right which will always bind third parties.

A contractual licence is a proprietary right which may bind third parties. Whether it binds a third party depends on the true construction of the contract.

A contractual licence is a personal right which is capable of binding third parties due to the nature of the right.

A contractual licence is a personal right and as such is not capable of binding third parties.

. In Errington v Errington, Denning LJ concluded that a contractual licence existed, following a promise made by the father to his son and daughter-in-law that the house would be conveyed to them if they continued with the mortgage payments. In Denning's LJ view, what was the effect of such a finding upon future purchasers?

Denning LJ reinforced the orthodox approach, stating categorically that a contractual licence is not capable of binding third parties.

Denning LJ considered that, despite the fusion of law and equity, equity will not intervene where there is a breach of contract due to the nature of the agreement.

Denning LJ stated that contractual licences can bind a purchaser for value who has notice of this contract.

Denning LJ considered that contractual licences have always been legally binding. The effect on the purchaser for value is that it will always bind them.

. Ashburn Anstalt v Arnold undertook a review of the reasoning in Errington v Errington. The court in Ashburn concluded that the decision was correct, but the reasoning in Errington was wrong. Which of the following statements is correct?

The court in Ashburn recognised that contractual licences always have proprietary status because a constructive trust will be implied to prevent unconscionability on the part of the estate owner affected.

The court in Ashburn held that a contractual licence does not have proprietary status. A constructive trust may be implied by the court, but it was not appropriate to do so in Ashburn because there was insufficient evidence that the conscience of the estate owner had been affected.

The court in Ashburn held that a contractual licence does not have proprietary status, but it may be upgraded to a proprietary right if the person claiming the right is in actual occupation.

The court in Ashburn held that contractual licences could be binding on the basis of estoppel. The court favoured this approach and overruled Lloyds Bank plc v Carrick.

. Which of the following statements is true?

The House of Lords in Cobbe v Yeoman's Row did not draw a distinction between the commercial or domestic cases in respect of the nature of the expectation that has arisen from the representation. In each case, the nature of the expectation should be clearly defined.

Cobbe was successful in his claim for proprietary estoppel because he had spent money in the expectation that he would have or obtain an interest in land.

The House of Lords in Cobbe v Yeoman's Row endorsed the view that estoppel can be used to protect an interest which has not been clearly formulated and where appropriate can circumvent the statutory requirement for writing under s.2 LP(MP)A 1989 in relation to an agreement to purchase land.

In Cobbe v Yeoman's Row, Lord Scott suggested that the claim for proprietary estoppel must be based on an expectation of a certain interest in land, and the person who denies the claim will then be estopped from denying this expectation.

. Anthony, an alcoholic, has lived with Olivia for the last five years. When they first met, Olivia was training to be a doctor, and she continued with her training even after she started cohabiting with Anthony. Anthony's health has deteriorated in the last three years and he has had to rely heavily on Olivia for help on a day-to-day-basis. Consequently, Olivia gave up her career to look after Anthony, following repeated assurances that 'when I'm dead you will get the house, the lot'. Anthony died last week and his will has made no provision for Olivia. Anthony's niece, Julia, will inherit his house and all his savings. Which of the following statements is correct?

Olivia will certainly have a constructive trust interest based on her help, provided to Anthony on a day-to-day basis.

Olivia cannot enforce these assurances since they are informal and do not comply with s.2 Law of Property (Miscellaneous) Provisions Act 1989.

Olivia can claim that an estoppel has arisen on the grounds that she had – following repeated assurances that she would inherit Anthony's estate – acted to her detriment by giving up her career to look after him.

Olivia could argue that an estoppel has arisen on the basis that it is unfair that Julia inherits everything since she has not had any contact with Anthony for the last ten years and she did not care about him.

. The courts, when satisfying the equity arising through a proprietary estoppel, will take a number of factors into consideration. Which of the following statements is true?

The courts will consider all the relevant circumstances of the case and use their discretion in awarding a remedy. The courts, in exercising their discretion, will always award the claimant the maximum possible to satisfy the equity.

The courts are not confined to a particular method in satisfying the equity. They will consider all the relevant circumstances of the case and use their discretion in awarding a remedy. In their assessment of providing a remedy, the courts will strive to achieve a fair balance between the expectation and the detriment suffered.

The courts will always consider the relevant circumstances of the case in satisfying the equity. Where there is a vague expectation, the courts will never use their discretion to award a remedy.

The courts have formulated a clear set of rules which deal with providing a remedy to those who have suffered to their detriment, having relied on an expectation. These rules enable claimants to work out exactly the extent of the compensation.

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