Contracts


Question 1a
Did a contract arise when Georgette when the auctioneer withdrew the piece from the auction? The result will depend on the wording of the advertisement.
A bilateral contract arises where one party accepts the offer made by the other and is the most prevalent type of contract.
A unilateral contract arises when a person makes a promise to do something in exchange of another party performing an act. The party making the promise binds themselves to the thing when the requested act is performed. The person who performs the requested action is free to do it or not and once they perform the act, they have accepted the offer (Poole 2012 p43).
If the advertisement said that the auction was being held with reserve prices then the construction of the contract is that Georgette made the offer and the auctioneer accepted the offer (Harris v Nickerson (1873) LR 8 QB 286).

If the advertisement was without reserve then there would be an unilateral contract as there is a promise that the highest offer by a bona fide bidder will be accepted (Barry v Davies (Trading as Heathcote Ball and Co) [2000] 1 WLR 1962).
Question 1b
To determine whether a contract exists the courts use the language of offer and acceptance. The court will examine all the circumstances to ascertain if one party made a firm offer and the other has accepted that offer (Furmston 2012 page 42).
The first issue is to prove that an offer was made that is capable of being accepted (Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484). In the Carlill case the court distinguished between an offer to treat and an offer that is capable of acceptance. An offer to treat cannot be accepted and if someone acts on the offer to treat it is that party making the offer.
The second question is whether there was an acceptance of the offer. The fact of acceptance may be inferred from conduct (Furmston 2012 page 50). Brogden v Metropolitan Rly Co (1877) 2 App Cas 666 is an example where the court held that a contract arose from conduct even though there was a long period between offer and acceptance.
For an enforceable contract to exist there must be consideration moving from one party to the other. The mere fact of the existence of the agreement is insufficient. The courts have defined consideration as (Dunlop v Selfridge Ltd [1915] AC 847):
'An act or forebearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.'
Lord Stowell said in Dalrymple v Dalrymple (1811) 2 Hag Con 54 that contracts
'must not be the sports of an idle hour, mere matters of pleasantry and badinage, never intended by the parties to have any serious effect whatever.' (page 105)
It is now a commonly held view that there must be an intention to be bound by the terms of the contract for there to be an enforceable contract between the parties (Furmston 20102 p147). This view is however challenged. The argument put forth by the opponents of adding this requirement to contract formation is that it has never been a requirement under common law (Furmston 2012 p148).
Question 1c
Where parties are in each other's presence the making of the offer and the acceptance thereof is easier to determine. A problem exists where the parties are removed from each other. The question is whether a contract arose between Felix and Georgette as a result of the letter sent by Georgette and whether a contract arose between Georgette and Peter as a result of the telephone message that Peter left.

The letter by Felix to Georgette advising that he 'can' sell the painting to her appears to be an offer to treat. It does not unequivocally state that he is offering it to her at that price. Georgette has previously indicated that she will pay GBP800 for the painting (Gibson v Manchester City Council [1979] 1 All ER 972).
There must be an external manifestation of acceptance and the manner that the offer may be accepted may be prescribed by the offeror which in turn may be inferred from the circumstances; the use of telegram communication may infer that there is some desire for a prompt reply and an acceptance by post may not be sufficient (Furmston 2102 p66).
The court prefers the position that a contract comes into existence as soon as the letter of acceptance is posted (Adams v Lindsell (1818) 1 B & Ald 681 and Byrne v Van Tienhoven (1879) 4 ex D 216).
An offer may be revoked before acceptance thereof (Payne v Cave (1789) 3 Term Rep 1480). The revocation must likewise be communicated to the offeree (Furmston 2012 Page 75).
If one accepts that the communication by Felix to Georgette amounted to an offer, then a contract came into existence when she posted the letter accepting the offer. Telephone communication would normally imply that the parties are in each other's presence and it would mean that the contract only comes into being when the offeror learns of the acceptance.
Question 1(d)
There must be consideration for a contract to be enforceable. The law does not require that the consideration must be in balance with that of the other party (Gillies P, Concise Contract Law The Federation Press 1988 page 40).
If a person is acting under a public duty to do a task then agreeing to do that task is not sufficient consideration for the a contract to exist as they are already obliged to carry out that task (Collins v Godefroy (1831) 1 B & Ad 950).
The promise made to the police officer is unenforceable not only because it was his public duty but also because it is a promise to pay for a past consideration by the police officer (Roscorla v Thomas (1842) 3 QB 234).

Explain good consideration and the requirement of intent to create legal relations

Question 2
2a Distinguish representations from terms
2b analyse distinction between warranties, conditions and intermediate terms
2c explain the ways in which terms can be incorporated into contracts
4a explain purpose and be able t0 recognise exclusions and limitation clauses
4b identify rules adopted by courts to regulate such clauses
4c analyse the effect of legislation on such clauses

John buys from Cars4U '
Guarantee: car is roadworthy rectify free of charge all defects which have not been discovered by the purchaser inspecting the car: Provided:
1. Must be notified Within 3 months of purchase
2. Value of rectifying not more than GBP2000
3. The subclauses will prevail over legislation
Salesman says that Cars4U will not rely on the contracting out provision
Salesman says John does not have to inspect the car it is reliable
Question 3
3a ' Law as the ability of minors to enter into contracts
3b ' explain privity of contract
3c ' evaluate inroads by courts and the statute of doctrine of privity
Leroy 10th birthday
Leroy gets food poisoning
Queen Burgers ' only refund or compensate ' other contracting party.
No contract with Leroy only with father as he paid by Credit card. Father no losses or damage
Son too young to enter into contracts

Bibliography
Books
Poole J, 2012. Textbook on Contract Law. 11 Edition. Oxford University Press, USA
Furmston MP, 2012. Cheshire, Fifoot and Furmston's Law oo Contract. 16 Edition. Oxford University Press, USA
Stone R, 2013. The Modern Law of Contract. 10 Edition. Routledge USA
Cases
Adams v Lindsell (1818) 1 B & Ald 681
Barry v Davies (Trading as Heathcote Ball and Co) [2000] 1 WLR 1962
Brogden v Metropolitan Rly Co (1877) 2 App Cas 666
Byrne v Van Tienhoven (1879) 4 ex D 216
Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484
Dalrymple v Dalrymple (1811) 2 Hag Con 54
Dunlop v Selfridge Ltd [1915] AC 847
Gibson v Manchester City Council [1979] 1 All ER 972
Harris v Nickerson (1873) LR 8 QB 286
Payne v Cave (1789) 3 Term Rep 1480
Roscorla v Thomas (1842) 3 QB 234

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