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Published: Fri, 02 Feb 2018

Most advertisements are held not to be offers

This question is about the formation of contracts. The first issue is the status of the advertisement placed in the local newspaper by Brandon. Most advertisements are held not to be offers and amount to statements inviting further negotiations or invitations to treat. The case establishing this point is Partridge v Crittenden (1968) which affirmed the earlier decision of Harris v Nickerson (1873). The letter written by Kimesha agreeing to buy a television (with cheque enclosed for the asking price) is unequivocal and demonstrates a clear intention to be bound. The letter would appear therefore to amount a firm and definite offer. However, Brandon did not receive the letter and since it was not communicated, or accepted, it is ineffective and there is no contract. Brandon is free to accept or reject Kimesha’s offer. The message left on Kimesha’s answering machine will make it clear that the offer is not accepted.

This question is about whether silence can amount to acceptance in the formation of a contract. Ordinarily an acceptance must be communicated and brought to the attention of the offeror to be valid. This point was made by Lord Denning in Entores v Far Eastern Corporation (1955). Generally the acceptance of an offer will not be implied from mere silence on the part of the offeree. The relevant authority on this is Felthouse v Bindley (1862). The reasoning is that it would be unfair to put an offeree to the trouble of avoiding an unwanted legal contract. On the face of it therefore Chima’s failure to contact Kaleb cannot amount to an acceptance. This means that Chima does not appear to have any legal claim to the chairs. However the rule is not an absolute one and it may be possible to argue that an exception exists where, as here, there has been a previous course of dealing. There is an American case – Ammons v Wilson 176 Miss 645 which takes this approach.

(c)This question is about the revocation of unilateral offers. The advertisement placed by Owen’s Department Store contains a conditional promise to reward the first ten customers with washing machines at reduced prices. This would be interpreted as a unilateral offer rather than an invitation to treat as in Carlill v Carbolic Smoke Ball Co (1893). The general rule is that an offer can be revoked at any time before it is accepted. A unilateral offer is only accepted when the requested act is fully performed. That did not happen here as the sales manager’s cancellation came before the sale took place. On the face of it, therefore, the sales manager is entitled to revoke the contract. However, this approach would lead to great injustice as the people in the queue had begun to perform the condition. In certain circumstances the courts have implied an obligation on the offeror not to prevent the condition becoming satisfied as in Errington v Errington (1952). However, the conceptual basis for preventing withdrawal once the offeree has begun to perform the condition is not clear. Moreover, a contrasting result was reached in Luxor (Eastbourne) Ltd v Cooper (1941).

This question is about sufficiency of consideration and in particular the rule that the performance of an existing contractual duty cannot be good consideration for a fresh promise. Wilson was already contractually bound to do the work when Sarah offered him an extra £2,000. The general rule is that there is insufficient consideration for the promise to pay extra money following Stilk v Myrick (1809). However this must now be seen in the light to Williams v Roffey Bros & Nicholls Ltd (1990) (W v R) which states that such promises may be enforceable if the promissor receives a practical benefit, or avoids a disbenefit, and there is no economic duress. Since the approach to pay the additional £2,000 came from Sarah there does not appear to be any economic duress. The facts, on the face of it, appear similar to W v R and so Wilson could use W v |R to argue that he is entitled to payment of the extra £2,000.

Section B

This question is about the scope of promissory estoppel. Answers should include a definition of promissory estoppel together with some explanation of how it was developed from Hughes v Metropolitan Railway Co Ltd (1877) and refined in Combe v Combe (1951). The main part of the answer however involves consideration of the conditions required for promissory estoppel as discussed in the High Trees case.

This question is about how terms can be implied into a contract both at common law and by statute. Answers should define an implied term and explain the various types. There should be some discussion of the case law on how a term can be implied as a matter of fact. The distinction between a term implied by law and fact should be explained using Liverpool City Council v Irwin (1976).

This question is about exclusion clauses with the focus being on the common law controls of incorporation and construction. Answers should make it clear that in relation to incorporation the objective approach is adopted. Cases on incorporation by notice, signature and previous course of dealing should be considered. On construction, there should be some discussion of contra proferentum and the strict approach adopted by the courts to the words used in such clauses.

This question is about the perfect performance rule which states that a contract is discharged by the satisfactory performance of all the primary obligations under the contract. Answers should state the rule using the case of Cutter v Powell (1756). The main part of the answer should contain some discussion of whether the harshness of the rule is mitigated by the exceptions such as substantial performance, partial performance and severable contracts.

This question is about misrepresentation. Answers should explain the different types which depend on the degree of blame attached to the maker of the statement. The distinction is important because the remedies vary for each type. Rescission is available for all types but damages as of right are only available for fraudulent and negligent misrepresentation.

This question is about the doctrine of remoteness within the law on remedies. The foundation case on this is Hadley v Baxendale (1854) which puts forward the rule that only losses which are in the reasonable contemplation of the parties are recoverable. Answers should discuss the difficult line of cases running from H v B which introduce uncertainty, on occasion, by applying a reasonable foreseability test for remoteness blurring the distinction between contract and tort.

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