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"?
Answer: Whereas normally a valid agreement should comprise of offer and acceptance, with advertisements the general rule is that they are not offers but statements inviting further negotiations or invitations to treat with Partridge v Crittenden [1968] serving as an example, where no offer for sale was found in the advertisement. Similarly, in Harris v Nickerson [1873] an auctioneer's advertisement to sell certain goods at a certain location on a specific date was held to be not a contractual offer but an invitation to treat only. In Grainger & Son v Gough [1896] price lists were distributed advertising certain goods at a specific price and these were found to be invitations to treat only considering that advertiser could have limited supplies of goods in question being unable to meet all the acc......(short extract)
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Details: - Mark: 75% | Course: Contract Law | Year: 1st | Words: 2189 | References: Yes | Date written: March, 2009 | Date submitted: December 16, 2009 | Coursework ID: 552
