Workshop 1 Contract Law- Unit 1 26.09.24.docx

Workshop 1 -- Contract Law -- 26.09.2024 **GUIDANCE ON ANSWERING PROBLEM QUESTIONS (incorporating IRAC as highlighted in red)** **1.           **Identify the **issues** ie the areas of law you will be dealing with. **2.           **As you go through your answer always define important terms, e.g....

Workshop 1 -- Contract Law -- 26.09.2024 **GUIDANCE ON ANSWERING PROBLEM QUESTIONS (incorporating IRAC as highlighted in red)** **1.           **Identify the **issues** ie the areas of law you will be dealing with. **2.           **As you go through your answer always define important terms, e.g. offer, invitation to treat, acceptance. **3.           **Structure your answer.  (a)         Adopt a logical sequence. For example, if there are a number of characters involved deal with them separately. In offer and acceptance questions events tend to happen in rapid succession, so deal with the events in chronological order (in relation to each particular character). (b)         Do not miss out important stages in your argument just because you think they are obvious. (c)         State general **rules** before discussing exceptions to them (if relevant). For example in offer and acceptance questions, where an acceptance has been posted you should deal first with the general rule that acceptance must be communicated and then go on to consider whether any exceptions apply e.g. the postal rule. Legal advice is led by legal rules/principles Important that they are stated, and authority is given (see point d) Need to do that before you deal with application of the facts - General rules -- follow by limitiations - State general rule and apply it before you look at exceptions  (d)         Try to give some **authority** for what you say, for example a case or a statute. (e)         Always **apply** the law to the facts of the problem. (f)          If there are two possible answers at any stage of your argument then by all means say which you think is more likely but consider the effects of both, e.g. it may not be clear whether the general rule as to communication of acceptance applies or whether the postal rule applies. You should therefore deal with both possibilities. **4.          **Use of cases            You can use cases in two main ways: (a)         As an **authority** for a legal principle, e.g.            The general rule is that acceptance must be communicated (***Entores v Miles Far East Corp***). -- put case in brackets immediately after general rules and before you go on to exceptions - Don't often go into the statement of facts in a problem question -- limited times when it is applicable and it should be a sentence or so            If you are merely citing a case as authority for a general principle and there is no similarity between the facts of the case and those of the question you are answering, there is no real point in recounting the facts.  (b)         As a **comparison** with the facts of the problem.              Sometimes you may wish to compare the facts of the problem you are dealing with, with the facts of a case.              If the facts are the same in both instances, say so, but this will be unlikely. If there is a difference, explain the significance of that difference. Here you will need to mention some of the key facts and not just the name of the case.  **5.           **If there is a document, or extract from a document, reproduced in a question (as with the Preparatory Activity to Workshop 1) make sure you read it carefully. Identify the relevant facts/issues which it raises, and apply them to the facts of the question. **6.           **Come to a **conclusion** if possible             Sometimes it is not possible because you may not have been given enough facts or the law may not be clear on a particular point, in which case say so. - Problem questions are deliberately ambiguous - Spot and explain the different legal interpretations -- very rarely a definite correct answer - Graded on the law that is applicable - Don't worry if you cant see a correct answer IRAC -- general - State the law and then MUST apply it - Application is the most important Diagram Description automatically generated One problem in the question - Need to be clear at who is alleging what - Problem here is formulation of contract - Need to state different elements of what a contract is - Issue is agreement - Define offer and look at the facts to see if there is one - Is there an acceptance - Splits into two - Is it an acceptance and has it been communicated - If you think you've seen an offer -- need to backtrack and see if there was a revocation - Was the offer revoked prior to acceptance -- if so, not contract ET2 - Ruby is alleging the contract - Binding contract -- 3 elements: 1. Agreement a. Agreement is the issue in this case b. Analysis of if there is an agreement i. Definition of agreement ii. Offer: Warmhomes offers to install heating with a quotation of £3000 -- valid offer iii. Need to look at her response 1. Acceptance definition: 2. Response is not an unqualified assent to the offer 3. Ruby possibly brings in counteroffer (Hyde v Wrench) -- could destroy offer 4. Could argue that it was an enquiry (Stevenson v McLean) -- mere request for information i. Key thing is -- not so important that they destroy the offer that went before them 5. What do you think? a. Ruby brought in a contingency ii. "I would ONLY be prepared to pay..." 6. Offeror created a fresh offer on the 19^th^ at 15:00-- after ruby's original response 7. Does Ruby accept the offer b. Yes -- email on the 22^nd^ at 16:30 c. Goes on to say -- "is it possible for you to start work by the end of May" iii. Need to look to see if it has relevance -- is it a counteroffer or a mere request for information 1. Mere request for information -- querying it a. If she said something like "I accept IF you start by the end of May" that would be a counteroffer 2. Therefore, no legal implication - \*because it was an email communication -- immediate communication 8. Revocation of offer d. Can revoke an offer up until it has been accepted -- case: e. Revocation must be communicated -- case: iv. Left their message on landline -- when is the revocation received 3. Is it when the message was left 4. Is it when it was listened to a. The Brimnes (closest case law we have for this situation) - similar to a notice telexed during normal office hours, but not read until the next day -- it may be effective on receipt - a telexed acceptance will be effective when it would be reasonable to expect the recipient to have read it even if if it not read until later - Based on the reasonable expectation of the sender -- WHEN is it reasonable for Warmhomes to expect Ruby to receive the voicemail - Warmhomes: - Within working hours - Phone call -- more immediate form of communication - All communication was done during these hours and therefore reasonable to expect she would answer - Ruby: - Unreasonable for Warmhomes to expect Ruby to check both email and landline - They knew she was out (went to voicemail) - Break in normal pattern of communication -- unreasonable for her to listen to landline voicemail - No correct answers -- therefore each party needs to put arguments for both sides - Court needs to decide whether the revocation 9. Conclusion f. Revocation valid on leaving message v. No contract because it predates email acceptance g. Revocation valid on her listening to it vi. There is a contract because it post-dates email h. In your conclusion state both of these outcomes and state that it would be down to the court to determine the outcome -- the key legal issues are revocation 10. Imagine the Court decided there was a contract and that Warmhomes breached what would damages be i. Look at a different company and if it was more then she would get the difference between the £4000 and whatever the next quote is j. Expectation loss -- difference of value k. Compensated on difference she had to pay l. Have to get several quotes from companies and pick the lowest one and use that 2. Intention to create legal relation c. Law is in commercial context there is a legal presumption to create legal relations (Edwards and Skyways) - Application- commercial agreement and there is nothing to prove otherwise 3. Consideration d. Exchange of promises (Ruby- cash, Warmhomes -- installation) ET3 (a)    When Ruby was first negotiating with Warmhomes about a new central heating system, they had discussed about how she would dispose of the old boiler etc. Ruby realised that she would have to hire a skip to take away the rubbish and so contacted Tony's Skips. Tony posted her a quotation for £90 inclusive of VAT and said that if she wanted to accept he needed to hear from her by Friday 19 April.           On Tuesday 16 April Ruby posted a letter to Tony accepting the quotation and asking when would be the earliest he could supply a skip. By 22 April when Ruby had not heard back from Tony, she rang him up. He said that he had not received her letter and had no skips available for hire now or in the near future. Ruby has telephoned a number of other skip hire firms but the cheapest quotation she has been given is £130 inclusive of VAT.  - Ruby alleging contract - Binding contract -- agreement, intention, consideration - Agreement is the issue again - Is there a clear acceptance: yes - Thoughts on "when would be the earliest he could supply a skip" - Not introducing a contingency, merely a request for information - Stevenson v McLean-does not invalid the acceptance - General Rule -- Acceptance needs to be communicated and received - Entores v Miles Far East - Under general rule -- no acceptance because the acceptance was not received - Exceptions: Postal Rule - If you post your acceptance, your acceptance is legally accepted at postage -- contract is binding at posting the letter - 4 Conditions of Postal Rule - Only applies to acceptances - Yes its fine - Reasonable for acceptance to be posted - Was it reasonable to post - Interrogate situation of posting - First class - Time when she sent it - Aware of delays or not? - Properly posted, stamped and addressed - Was it? - Don't know, does not say and no evidence - At best, we might say -- it could be that maybe it hadn't because he hadn't received it for a while - Must not be excluded by offeror - Holwell Secruity Ltd v Hughes - Implied exclusion of the rule? - Timing issues here - To exclude the postal rule -- you have to indicate that you want actual knowledge of acceptance by a certain date - He actually wants to know that she accepts -- if court acknowledges this then there is an exclusion to the postal rule and therefore no contract - If the postal rule applies, contract - Damages would be £40 -- contract she missed out on and having to get a skip elsewhere - If the postal rule does not apply, no contract - \*notice -- diverges \- knowledge, want to know of it (b)    On Monday 15 April at a local auction house Ruby had spotted some Victorian garden ornaments (which she thought would go well in the cottage garden). She asked the auctioneer about them. He said they were from a house clearance to be sold without reserve at 1pm on 22 April.           Ruby attended the auction on 22 April. When it came to the lot comprising the Victorian garden ornaments, the auctioneer said they had been valued at £300 and would be sold that day whatever price they fetched. He invited bids of £100, then £80. When nobody responded, the auctioneer asked how much anyone would be prepared to pay for the ornaments and Ruby bid £20. No further bids were made but the auctioneer withdrew the ornaments from the sale. He later sold them privately for £150 - Auction without reserve (autction where the seller of the goods does not stipulate a minimum\*\* - have to consider 2 contract - Sale of Goods Act - Contract involving the auctioneer - Sale of Goods Act - Auctioneer opens bidding -- invitation to treat - What is the status of someone's bid -- offer - Hammer coming down -- acceptance - Contract is fromed when the hammer comes down - Parties to contract - Successful bidder - Auctioneer - They are an agent - Hammer was not brought down therefore she does not have a contract with owner -- s 57 (2) - Unilateral contract with auctioneer in 'without reserve' auction - Offer? - Goods would go to the highest bidder - \*IF contract - If you make the highest bid, I will sell the goods to you - Acceptance - Highest bid constitutes the acceptance - Auctioneer breached this because he did not sell Ruby the goods - Barry v Davis - Applying - Damages - The difference between how much was bid and how much the goods cost at an open market - If you give advice -- you have to spilt the two different contracts - Structure is important -- deal with each separate contract separately - Deal with sale of goods act first - Then deal with the separate contract with the auctioneer - Why is she awarded money and not the goods - Auctioneer does not own the goods that they sell -- the auctioneer is an agent and has no title to the goods and the remedy must lie in money Test your Knowledge -- ET1 Q1. On 8 March a company made an offer by email to sell goods to a client for £500. It said it would keep the offer open but needed to hear from the client before 15 March. The next day the client posted a letter to the company accepting the offer. The letter never arrived. On 16 March the company sold the goods elsewhere. **Which one of the following statements best explains whether the company is in breach of contract by not selling the goods to the client?** - No because the postal rule had been impliedly excluded or otherwise may not apply - Wording -- "to hear" - He needed to have knowledge of the notice Q2. A client bought a house and promised his son and daughter-in-law that if they occupied the house and made all the mortgage repayments on the house he would transfer the house to them. The couple duly started to make the mortgage repayments but then there was a dispute. The client told the couple he had changed his mind and sought to repossess the house. **\ Which one of following statements best describes the legal position?** The client would be in breach - Based in fairness - Stemmed from a slight uncertainty -- what constitutes as acceptance - First mortgage - Or when the final payment was made - Errington v Errington and Woods - Implied that you promised not to revoke offer when act had started - Long term oneriest act of acceptance