Question: Prepare a full written answer to the following problem for presentation to the rest of the tutorial group and peer assessment.
Dragon Retail Ltd imports and sells toys from China.
Dragon contracted to buy 50, 000 at £5 each from China Link Ltd the UK agents. Dragon had £100,000 worth of orders for the toy before Christmas.
Due to production problems in China, China Link said the price had to be increased to £7.50 each to ensure delivery before Christmas. Dragon agreed as they did not want to be unable to fill their orders. In addition, Dragon agreed to Trade Union demands just before Christmas to increase staff wages and holidays to avoid a threatened strike that would have prevented delivery of the Christmas orders and put them in breach of contract with their customers.
Advise Dragon as to whether they can avoid the contracts with their employees and China Link and recover the extra money paid.
Answer: Originally Brown and Co. offered to sell steel to Khan and Co. for £20,000. However Khan added terms to the offer and offered to buy the same amount of steel for £17,500. This is a counter offer which overrides the original offer. This effect is clearly demonstrated in relation to a price term in the case of Hyde v Wrench (1840) 3 Beav 334. Brown accepted this counter offer due to the high competition and told his secretary by letter to post the acceptance on Thursday 8th September. Because of the limited information that we have been given I am assuming that the secretary posted the acceptance on the 8th of September. And therefore it can be argued that Khan and Co. are in breach of contract. “The rule that acceptance must be communicated to the offeror is overturned when a......(short extract)
Details: - Mark: Not available | Course: Contract Law | Year: 1st | Words: 1081 | References: Yes | Date written: Not available | Date submitted: January 12, 2012 | Coursework ID: 712