MERCANTILE LAW AMENDMENT BILL. (Hansard, 2 May 1856)

THE LORD CHANCELLOR
, in moving that the said Report be now received, said, the first clause of the Bill related to what lawyers know by the designation of the 1907 17th clause of the Statute of Frauds. The main drift of the clause was to require that no contract relating to the sale of land, to guarantees, or to sales of goods of the value of above £10 should be valid unless it was in writing. Inasmuch, however, as the latter proviso would have interfered with the ordinary transactions of business, it became necessary to introduce exceptions, and then questions arose, and the law books were full of reports of cases, as to whether the particular case before the Court came within these exceptions. The Mercantile Law Commissioners proposed that this clause, so far as regarded contracts for the sale of goods, should be repealed, and he concurred with them. He was told that great apprehension prevailed on the subject in the City of London, the merchants thinking that this alteration would enable their brokers to bind them to contracts not reduced to writing. That was an entire mistake. A broker could not bind his principal, except so far as the principal gave him authority to bind him; and no merchant had anything more to do than to tell his broker, in writing or by word of mouth, that he did not authorise him to enter into contracts on his account except in writing. If, then, the merchants of London preferred to transact their business by means of contracts in writing, they need not alter their system; but the Commissioners stated, that neither in Glasgow, Liverpool, Manchester, nor Dublin, was it the practice to reduce contracts in the ordinary operations of trade to writing, and yet they all knew that commerce was carried on in those towns in a flourishing manner.

LORD CAMPBELL
observed, that the doubts occasioned by that clause of the Statute of Frauds, which it was proposed now to repeal, had filled many volumes of Reports, and he believed that it would be a great improvement to do away with that clause, and assimilate the law in this respect to the law of Scotland; he, therefore, hoped that the mercantile class in London would withdraw their opposition to the Bill; for they were mistaken in supposing that the clause was one which absolutely required a written contract. The exceptions in the clause led to much litigation, but the repeal of this clause would not affect written contracts, and he should recommend the merchants of London to adhere to the practice of having such contracts; but if they followed his advice they would withdraw their opposition to an 1908 amendment of the law which would merely require that a contract need not be in writing to be obligatory on the parties.

§ LORD OVERSTONE
said, that the petition lately presented against the repeal of that clause bore the signature of almost every respectable merchant in the City of London, and every Director of the Bank of England, and he understood the apprehension which they felt was, that if this Bill passed, they would be exposed to the danger of finding themselves bound by contracts to which they had never consented to be parties. How far that would be its effect he (Lord Overstone) was incapable of judging, but he felt sure that the explanation given by the Lord Chief Justice would be carefully weighed by the mercantile body in the City of London, and he should rejoice to find that it would prove sufficient to remove their objections, and give them confidence in the effect of the Bill.

§ LORD HARROWBY
remarked that there was a respectable minority of the merchants of London who did not agree with the petitioners, and in the great mercantile transactions of Glasgow that clause of the Statute of Frauds was not required.