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Contract Law - Question 1

Eric, Fatima, Greg, Harjit and Imaan are members of a golf club. On 1st may the club posted a large poster at their entrance door that all club members who shall hit a hole shall incur a reward of 1000 euros. So Eric hit a hole on 1st April, Fatima hit a hole on 1st May but she was unaware of this contest as she entered the club from the back door, Greg said that he finds the contest stupid, but later he did hit in a hole and now expects of the prize money, Devi a guest of Harjit played and hit a hole on 1st June, and Imaan on 1st July, sees the poster and goes out to play but when he returns he saw that the poster had changed.

Issue

Liability of the Little dale golf club(the club) on all of the characters, Eric(E), Fatima(F), Greg(G), Devi(D) and Imaan(I)

Legislation

The contract law

Application

The foundation of common law, the contract law was not given that much of any heed. The judicial authorities adjudged the case not based on the facts, but procedural laws. This continued until the 19th century. After that, after the classical contract theory gained prominence, it laid the foundation for the modern contract theory. The classical theory tells the three golden rules of contract- first, bargain, meaning reciprocal contract; second, there should be a lawful consent from the side of the parties wanting to enter into a contract; and third, freedom of the parties to enter into any contract. (O’Sullivan, 2018).

In the given facts, the club hung up a board on 1st May stating that anyone who hit a hole in one will be awarded 1000 euros. For our first issue that including E, so he hit the hole on 1st April. He automatically gets eliminated from the offer as what he did was in backdate. In Vivienne Westwood Limited v Conduit Street Development Limited [2017] EWHC 350, it was held that wherein the given contract, if the parties have agreed to apply the contract retrospectively, then that can be applicable given to the subjectivity of the case. However in the given case, the club hasn't mentioned any such retrospective effect, hence E is out of the context to be paid any reward by the club.

As for F, she did not know that such an offer have been offered by the club. On 1st May when he hit the hole and left the club from the backdoor, she did not notice the poster. However, later she gets excited about knowing that she won 1000 euros that day. Therefore, as for F, she is liable to be paid the reward amount even though she was unaware of the offer. There was an offer for the club members to hit a hole and win the contest. F's unawareness shall be considered to be an acceptance of the offer as she did act on the offer. So this constituted a unilateral contract where the one-party promises to pay the other party and the other party had not communicated that whether he has acted or refrained from acting on that offer, so in such a case the other party need not communicate the acceptance. In Carlill v Carbolic Smoke Ball Company (1893), it was held that where the other party has performed a contract fully, so his communication of acceptance does not matters. Hence, the club is liable to pay F 1000 euros.

As for G, he said that he finds the offer stupid as he thinks golf is an entertainment sport and not some business. He later on 1st May did hit a hole and wants to claim the reward. However, he is not liable to such a prize as his conduct on the made offer showed that he was not interested in that. One of the types of rejection is when the offeree by his words, conduct or any counter-offer gives this idea that he is not interested in the offer. So even if later he accepts it, it would not amounts to acceptance (Law Teacher, 2018). InHyde v Wrench, it was held that the time when the plaintiff rejected the defendants offer by giving a new offer, that time only did he rejected the offer. So the offeror became the offeree and the offeree became the offeror.

As for Devi, she being H guest, hit the hole on 1st June. The offer explicitly said that the club members who shall hit the hole shall be liable for the award. So in that context, not being a club member she gets eliminated. And secondly, the offer made was on 1st May. It is nowhere written that the offer shall continue for what amount of time. Therefore, on that basis, she hit the hole on 1st June, so that way she also not eligible for the prize.

As for I, so he saw the poster on 1st July. So he is eligible for the prize money as he did hit a hole when he saw the poster. The poster must have been changed while he was playing but that does not deter him from the fact that he is eligible for the prize money.

Had the original poster offered 1,00,000 euros, then too my answer would not differ. Here the question is not about the prize money but who is eligible for the prize money. The offer did not say that till what amount of time the offer shall be valid, so considering it just for 1st May, I am not eligible for the prize. 

Conclusion

Only Fatima seems to be eligible for the prize money as she did hit the hole on 1st May and as per the unilateral contract, she should be given the money by the club. The rest, not eligible.

Contract Law - Question 2

Heather had two boats to which one she rent out to Rowena for a year at 1000 euros per month. However, R lost her job to which H agrees that R shall pay half of the amount for the rest three months until she finds a new job. However, R left for her parent's house and there she sublets the boat to someone else. Furious on this, H now seeks her arrear amount and the decided rental payment as before.

H gave a second boat to V, whom she asked to decorate it and she shall deduct 500 euros from her rent in the next month. V decorated the boat and now H changes her mind.

Issue

  • Can Heather(H) make Rowena(R) pay the amount?
  • Can Heather(H) repudiates the promise she made with Violet(V)

Legislation

Contract Law

Application

As for the first issue, so H rented a boat to R to which they agreed that R shall pay H 1000 euros per month for a year. R lost her job and H out of generosity told R to pay only half of the amount for the next three months, till she finds another job. R agrees to that but later she went to her parents and sublets H’s boat at 2000 euros. R’s conduct clearly shows that she had cheated on H and tries to take undue advantage of her trust. There was a clear breach of contract on R's side. Breach of contract is difficult to ascertain but where a party refuses to continue the contract or does something which automatically leads to a repudiation of the contract, then that's is termed as breach of contract (Halson, Macmillan & Stone, 2018). 

The consequences of the breach of contract depend upon case to case and the decision of the victim party. However as held in Decro-Wall SA v International Practitioners in Marketing (1971), breach of contract does not automatically repudiate a contract. It depends upon the victim party to decide whether a mere condition was breached or the whole of the contract was breached. Then it depends upon the court to decide whether that condition was the basis of the contract or not. In this situation, where there has been a breach or not, the victim party has the right to sue for damages on the alleged breaching party.

As for the conduct of R, when she went to her parent’s house and there she rents out H’s boat. She was supposed to pay H for the money they promised with each other to pay in three months, but she sublets her boat to someone else. So as per Spar Shipping AS v Grand China Logistics (Group) Co Ltd [2016] EWCA Civ 982), it was held where the party either renounces the contract where the performance is due or where the party by his conduct shows that he cannot perform the contract, their anticipatory breach occurs. So as for the victim party, he is liable to terminate the contract the moment he realizes that the other party shall not be able to complete the contract. This means that immediate action is required on part of the victim party (Halson, Macmillan & Stone, 2018). Also as per Hochster v De la Tour (1853), it is held that in anticipatory breach it is not essential that the contract is going to be repudiated without the victim party asking for damages. The victim party has full right to claim for damages if he finds the contract has been breached. The injured party has to establish this fact in front of the jury that the party in breach had acted in such a manner which gave the victim party an idea that the other is not interested in performing his side of the contract.

So as for our first issue, R did breach the contract with H by repudiating the performance of the contract. She was supposed to pay H for the half payment they agreed to be paid for the next three months and in return, she sublets H's boat to someone else who is not lawfully owner off. So H is legally liable to claim for her damages as R had breached the contract. The jury is to decide on this as there are two ways of giving damages. First, by the expected loss the victim party has suffered (Halson, Macmillan & Stone, 2018). As held in by Lord Nicholls in Nykredit plc v Edward Erdman (1997), it depends upon the promise between the promisor and the promisee. So that is measured on the basis of where the other party had acted in a default manner and caused some damage to the other party. Second is on the reliance loss basis. As held in Anglia Television v Reed (1972), where the victim is not able to ascertain the amount of loss he suffered, there the court relies on reliable loss meaning they ascertain that how much damage has the victim party faced. This situation is not with our given case, as H has explicitly asked the arrears of the amount and the payment of the rental price which was decided 1000 euros beforehand.

As for our second issue, H asked V to redecorate her second houseboat, which she did. In lieu of that H shall deduct 500 euros from her next month's rent. There was an offer from H's side and the same was accepted by V on which she acted. However, later H changes her mind and refuses to deduct the said amount. So here H is breaching the contract. A very well known case Brogden v Metropolitan Railway Company (1877), where an offeree accepts the offer made by the offeror by performance, then that is termed to be acceptance of the offer. So as per that, V did act on the promise made by H and hence H is liable to deduct the said amount from the rent of V's.

Conclusion

As for the R's conduct so yes he did breach the contract with H and tried to sell his boat illegally to someone else so he is liable to pay the damages to H and also the loss he incurred in that time spam. As for V, so H promised to deduct a certain amount from his rent if he decorates the boat, which V did. So later H cannot change his mind and say that he no longer is going to do that as there was a valid contract between the two.

References for Contract Law

O’ Sullivan, J. (2018). O'Sullivan and Hilliard's The Law of Contract. Oxford University Press, 2018.

Law teacher. (2018). Examples of Offer termination. [online]. Available at https://www.lawteacher.net/free-law-essays/contract-law/examples-of-offer-termination-contract-law-essay.php. [Accessed on 17/07/2020]

Halson, R., Macmillan, C. & Stone, R. (2018). Contract Law. University of London, 2018

Case laws-

Vivienne Westwood Limited v Conduit Street Development Limited [2017] EWHC 350

Carlill v Carbolic Smoke Ball Company (1893)

Hyde v Wrench

Decro-Wall SA v International Practitioners in Marketing (1971)

Spar Shipping AS v Grand China Logistics (Group) Co Ltd [2016] EWCA Civ 982)

Hochster v De la Tour (1853)

Nykredit plc v Edward Erdman (1997)

Anglia Television v Reed (1972)

Brogden v Metropolitan Railway Company (1877)

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Law Assignment Help

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