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Question: 1st YEAR - CONTRACT LAW - CASE STUDY

Bigstore Furniture Ltd (“Bigstore”) is a retailer of household furniture. The company announced its summer sale on 1 July 2009 by placing the following advertisement in several national daily newspapers in the UK.

BIGSTORE’S SUMMER MEGASALE!
Prices cut by up to 70%!
Special offer! Anyone purchasing an Italia leather three-seater sofa by cash or credit card at the reduced price of £750 will receive an Italia leather two-seater sofa priced at £500 in the sale absolutely free of charge!
This offer is available at all our stores until 31st August 2009.

(The advertisement concluded by listing in small print all the company’s stores throughout
the country.)

On 5 August 2009 Susan took a copy of the advertisement with her and called at her local
Bigstore to inspect the Italia sofas. She spoke to Ben, the Sales Manager, and told him that
she had decided to purchase the sofas subject to first talking this over with her husband. Ben told Susan that the company only had a limited number of two-seaters so it was agreed that she would leave £100 in return for his agreement to hold the sofas for 48 hours. Ben told her that he would deduct the £100 from the purchase price if Susan went ahead with the
purchase within that time period.

On 7 August 2009 Susan called at the store to purchase the sofas and spoke to Ben who was
very apologetic but explained that his staff had forgotten to reserve the sofas for her. He
explained that in any event the two-seaters were “subject to availability” (as stated in
various notices around the store), and the company had now run out of them. Ben also said
that “…obviously the two-seaters were a free gift and were subject to availability.” He
pointed out that the Italia three-seater sofa was still available but the price had now gone
back up to £2,500.

By reference to case law and statute or your own examples where appropriate:

(a) Explain the elements of a unilateral offer and how such an offer may be accepted.

(b) Explain whether the advert amounts to an offer or an invitation to treat in respect of
(i) the three-seater sofas;
(ii) the two-seater sofas

(c) Explain with reasons what Susan purchased by paying GBP 100 on 5 August 2009. Was Susan entitled to have the GBP 100 deducted from the purchase price even if Ben had not agreed to do so?

(d) Explain whether those who purchased a three-seater sofa were contractually entitled to receive a two-seater as well or whether Ben was correct in stating “obviously the two-seaters were a free gift…..”

(e) Explain with reasons whether Bigstore has acted in breach of contract despite the notices which state that the two-seaters were “subject to availability"?

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Question: Explain the differences between ‘duress’ and ‘undue influence’. Do both categories together amount to a law against unconscionable contracts?

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Question: CONTRACT LAW CASE STUDY / SCENARIO

TASK 1
Mrs. Turner has decided to start her own business running a private day nursery. It is
necessary for her to find appropriate premises. She sees a detached house, which would be
appropriate, on the market for £200.000. After having viewed the property she decides to make a bid for the property for £150,000. The sellers state clearly however that they will only accept £180,000.

Mrs. Turner then sees another property on the market for £250,000. She offers the asking price for this and it is accepted 'subject to contract.'

However a week later the sellers of the first property contact Mrs. Turner again stating that they have reconsidered are now happy to accept her bid for £150,000.

Your supervisor has requested that you research the relevant issues and compile a report for her attention which, outlines your findings.

TASK 2
Mrs. Turner has now purchased a suitable property and is now purchasing the necessary items required to run her nursery. She looks on a website and sees cots and high chairs advertised for sale by a company named Babies R Us, on the 1st October 2003, requesting twenty cots and twenty high chairs, requesting a reply by the 21st November 2003.

She received a reply by post, confirming the order, on the 1st December 2003. This was postmarked 20th November. However on the 30th November, Mrs. Turner had assumed that Babies R Us were unlikely to reply and therefore, entered into a contract with a rival company.

Mrs. Turner has made an appointment to see you to gain advice relating to the above problem.
Equally, she would appreciate some advice relating to the formation of contracts by e-mail.

TASK 3
Mrs. Turner's nursery has now opened and has recruited well. She is concerned as to the
different types of liabilities, which she may be affected by during the course of her business and would appreciate it if you could write to her regarding this.

Explain the different types of liabilities and along with examples.

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Question: The City of Coventry decided, some time ago, to celebrate its long history with a parade and pageant through the streets of the town on May Day. The parade was to include a rather scantily dressed Lady Godiva, on horseback, as well as characters from the city’s more recent history.

Martin, a local businessman, thought it would be a good idea to celebrate his wife Lesley’s birthday in style, so he booked a suite of rooms in the Royal Mercia Hotel for the party, overlooking the route which the parade was expected to take. It was agreed that the hotel would provide food and drink for the party. He paid a deposit of £500, making it clear that he wanted a room to see the procession.

There had been a fair bit of agitation against the procession in the city, particularly form a group calling itself “Women Against Exploitation” who regarded the parade as outrageously sexist and called for it to be banned. Two days before it was due to take place, Coventry City Council bowed to pressure and called the entire event off.

When Martin heard this, he called the Royal Mercia Hotel and said he was no longer interested in hiring the room. The hotel replied that as far as they were concerned the booking still stood and they would go ahead and provide the catering for Martin’s wife’s birthday as agreed.

Martin and his guests did not attend on the day in question. Nevertheless the hotel sent him a bill. He counterclaimed for the return of his deposit. Miss Tessa Smith, who was employed for the day to play the part of Lady Godiva, is suing Coventry City Council for breach of contract.

Advise Martin and Coventry City Council.

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Question: CONTRACT LAW CASE STUDY 2, ASSIGNMENT 2, TASK ONE

Barry is a retired lorry driver who has just set up his own distribution service called 'Deliveries R Us'. Pencilbox PLC, his first customers, want to use Barry's service to deliver stationery to some of their retail outlets. They reached an agreement and a contract was signed whereby Barry would deliver a minimum of 3000 boxes of stationery for Pencilbox over the next 12 months. The contract was to commence on the 1st April. No maximum figure was specified in the contracts and a delivery charge of £1.00 per box was laid down by Barry.

Barry expected to deliver a higher amount than the minimum specified and so decided to take out a bank loan in order to upgrade his existing fleet of lorries.

However six months later, Pencilbox pic wanted to renegotiate the delivery charge threatening immediate withdrawal unless the charge was reduced to 50p per box. They also told him that they wanted him to enter a three year contract with 'Gadgets Ltd' a subsidiary of Pencilbox pic or they would terminate their business arrangement with his distribution service.

Barry has found that his distribution service hasn't been as busy as he believed it would be and so agreed to the new arrangements as he didn't want to lose their custom even though he was aware he would be making a lose on the contract with Gadgets Ltd.

Barry has asked for your advice. You are a junior partner of Patel and Brown Solicitors and have been asked by your senior to write a report on whether he can claim the lost monies for every delivery he made on the grounds that the modification made to the contract was due to improper pressure.

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Question: The main object of damages for breach of contract is to put the plaintiff 'so far as money can do it … in the same situation … as if the contract had been performed' (Robinson v Harman (1848)).

Explain how this principle operates in practice, and discuss any exceptions that there may be to it.

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Question: CONTRACT LAW CASE STUDY / SCENARIO

FILE 1
Khalil has decided to purchase a brand new car for, .Sobia, on the basis that she spends five hours studying a day on her A'level examinations. Khalil has entered into a contract
the garage so that he can collect the car the day before Sobia's birthday.

He arranged for the car to to be registered in Sobia's name and the free insurance which was offered with the car has also been registered for the benefit of Sobia. The car was not ready to collect on the agreed date.

Khalil has gone on holiday and Sobia, who has still not received the car, is attempting to enforce the contract on her own behalf. Can she do this?

Prepare a report a report for the attention of the senior legal adviser stating the results of your research and the advice that you intend to give. The report should focus particularly on consideration, privity (including the effect of recent legislation) and intention.

FILE 2
Gemma is 16, and is an ice skater and has signed a contract with a company that organises dance shows and performances on ice. This will involve her travelling to various parts of the world on tour. She will be paid a reasonable amount and the contract stated that she will be supervised at all times by a supervisor and not allowed to socialise outside the dance group.

Gemma's mother, Margaret has called in for advice. She wants to know whether this contract is enforceable.

Also, Margaret's husband Matthew, is recovery from a nervous breakdown. Is he free to enter into any contract without restrictions?

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Question: CONSUMER LAW ASSIGNMENT 1
TASK ONE

Nazia is a student at Bradford College. Recently she bought an alarm clock from Price Right Stores. It cost twenty pounds but was not supplied with batteries. She uses it for several months without any problems.

Nazia booked a holiday to Turkey and set the alarm to go off at 5 a.m. on the day of departure. The alarm doesn't work and she oversleeps by several hours. She ends up missing the flight and having to pay for another flight in order to reach her destination.

She also bought a beaded evening bag from Price Right Stores for use at the Bradford College Ball. She is embarrassed when some of the beads fall off during the evening and the handle breaks.

Write a letter to Nazia advising her of her rights and remedies in respect of
Price Right Stores.

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Question: McKendrick comments that, despite the enactment of the Minors' Contracts Act 1987, 'the rules of law remain in need of further rationalisation in an effort to provide a better balance between, on the one hand, the protection of minors and, on the other hand, the interests of those who deal in all good faith with them' (Contract Law.) Do you agree?

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Question: Produce a reasoned argument in favour of changing or reforming any rule or doctrine which you have come across in the English law of contract.

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