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Distinguish between an offer and an invitation to treat AC 1.1

Unit Contract Law

Level 4

30 Credits Assignments

You are a trainee solicitor in BL LLP. Your supervisor has asked you to advise on a number of contractual matters relating to one of the firm’s clients, Mr Wilson.

1) Sale of paintings

Last year Mr Wilson inherited two paintings from his uncle. He does not particularly like the paintings and on Monday places the following advert in a local newspaper:

“For sale – two paintings, circa 1950’s. Price negotiable”

The advert contains a photograph of each painting and Mr Wilson’s email address.

Mavis sees the advert on Tuesday. She thinks that the paintings are by the famous artist Dale Salvadori and immediately sends an email to Wilson saying that she will pay £200 for both of them.

Wilson emails back on Wednesday morning saying that he will accept £200 per painting and that Mavis should communicate her decision to him no later than Friday morning.

On Wednesday evening, Wilson receives an email from Polly. It states that Polly will pay £500 for both paintings.

Wilson responds to Polly’s email straightaway, saying: “It is a deal. They are yours”

On Wednesday evening he also sends an email to Mavis informing her that the paintings are no longer for sale. Mavis’ email account is hacked on Wednesday morning and she cannot send or receive any emails. She sends a letter to Wilson on Thursday morning saying that she is happy to pay £400 for both paintings.

The letter is received by Wilson on Saturday morning. By this time Wilson has discovered that the paintings are by Dale Salvadori and refuses to sell them.

Both Mavis and Polly each claim that they have a valid contract with Wilson for the sale of the paintings.

Task

You need to produce written advice on each issue for your supervisor to consider in the cases of a) Mavis v Wilson and b) Polly v Wilson, using the information provided. You must ensure that you:

  • distinguish between an offer and an invitation to treat AC 1.1
  • identify and explain the legal rules applicable to the acceptance of an offer AC 1.2

2. Green Cottage and related matters

a) Wilson wants to open a boutique hotel. He buys Green Cottage for £300,000 and on 1 February hires a construction company Build It Perfect (BIP), to carry out the refurbishment.

Under the agreement, BIP needs to complete the work by 1 May for a fixed price of £50,000.

On 1 May BIP informs Wilson that they are experiencing financial difficulties and that unless he pays them an extra £20,000 they will not complete the work by the agreed date. Wilson is furious. If the work is not completed by 1July he will need to postpone the opening of the hotel and cancel the bookings. Therefore, he reluctantly agrees to pay BIP the additional £20,000.

BIP completes the work by 1 July.

Task

You must continue to provide written advice in the case of Wilson v BIP for your supervisor to consider.

In the written advice for Wilson v BIP, using the information provided you must ensure you:

  • Assess the requirements for a valid consideration AC 1.3
  • Analyse the development of the doctrine of duress AC 3.3

Your supervisor is pleased with your work to date and has set up a meeting with you to discuss certain points of law. You know that you must be prepared for this meeting as the supervisor will have high expectations of the discussion.

For a Merit grade make notes for the meeting which:

  • Critique the significance of practical benefit as consideration AC 1M1 For a Distinction grade your notes must also:
    • Assess the limitations of Williams v Roffey Bros (1991) in relation to a promise to accept less. AC 1D1

b) Wilson orders £30,000 for some new made to measure furniture for the boutique hotel from Dakia. Dakia is to deliver the furniture on 1 July. Dakia delivers the furniture on schedule but none of it is of the agreed dimensions. Wilson sends it back and wants Dakia to refund him the £30,000 he paid for it. Dakia refuses to refund him, bringing to his attention the following clause contained on the last page of their contract, which was duly signed by Wilson

You need to distinguish between an offer and an invitation to treat.

Clause 47 “No refund under any circumstances”.

Wilson now finds a local company that can deliver furniture in time for the opening, but it only has sufficient furniture in stock to furnish three of the six bedrooms.

Wilson decides to go ahead with the opening despite the fact that only three of the rooms can be hired out.

Task

Your supervisor now wishes you to draft written advice to Wilson v Dakia for him to consider, In the communication you need to:

  • Explain the difference between terms and representations AC 2.1
  • Identify the sources of contractual terms AC 2.2
  • Distinguish between conditions, warranties and innominate terms AC 2.3
    • Examine the difference between breach of conditions, warranties and innominate terms AC 4.2
    • Distinguish between liquidated and unliquidated damages AC 5.1
    • Assess the aim of damages in Contract Law AC 5.2
      • Compare and contrast the different measures used for assessing damages AC 5.3 In order to achieve a Distinction grade you must in addition:
        • Analyse the Court’s approach to interpretation and validity of exemption clauses AC 2D1
        • Assess the amount of damages that can be claimed for a specific breach of contract AC 5D1

c)  A day before the opening, he receives a booking request from Robert Milford for a two- night, all-inclusive stay.

When Robert arrives at the hotel, Wilson is convinced that he is the famous football player Ronald Messino, using an alias. At reception, Wilson has displayed a few antique items for sale. On checking out, Robert selects a vase from the display and asks whether Wilson is willing to take a cheque for it. Wilson says that although usually he does not take cheques, as he is a famous football star, he will accept a cheque. To this, Robert smiles and gives Wilson a cheque for £500. Wilson accepts the cheque and gives the vase to Robert.

When he goes to the bank to cash in the cheque, he is informed that the cheque is a forgery. Wilson manages to trace the vase to Kam who had paid Robert £700 for it and refuses to give it to Wilson

Task

In the written advice to Wilson v Kam, using the information provided you must:

  • Identify the elements of actionable representation AC 3.1
    • Differentiate between fraudulent, negligent and innocent misrepresentation AC 3.2 In order to achieve a Merit grade you must in addition:
      • Examine    the    remedies    available     for    fraudulent,    negligent     and    innocent misrepresentation AC 3M1
      • Contrast the effects of misrepresentation and mistake on a contract AC 3M2

d)  Two days before the hotel opens, Sandra who was contracted by Wilson to sing at the opening night, phones to say that she will not be performing because she has broken her leg and cannot travel. Wilson demands that Sandra returns the £2000 he paid to her for the performance.

Task

In the written advice for Wilson v Sandra you must ensure you:

  • Explain the different ways in which a contract can come to an end AC 4.1
  • Examine the doctrine of frustration AC 4.3

You will start answering from the first outcome distinguish between an offer and an invitation to treat AC 1.1


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