Clarke v Earl of Dunraven (The Satanita) [1897]

Court: House of Lords

Facts: During a yacht race, The Satanita collided with Lord Dunraven's yacht, Valkyrie II, leading to damage and sinking. The race rules imposed liability for damages. Lord Dunraven sought compensation from Clarke, the owner of The Satanita.

Issue: Does participating in a race under specified rules create a contractual obligation to compensate for damages caused by rule violations?

Held: The House of Lords upheld the Court of Appeal's decision, recognizing a contractual obligation between the yacht owners based on the race rules.

Key Judicial Statement: The court affirmed, "The agreement to race under specific rules constituted a contract, obligating participants to compensate for damages resulting from rule violations."

💡Leveluplaw: Contractual obligations can arise from participation in activities governed by specific rules, demonstrating contract law's adaptability to unconventional agreements. This case illustrates how mutual participation under agreed terms can establish binding contractual relationships.