- This topic has 8 replies, 2 voices, and was last updated 11 months ago by
.
- Posts
Greetings Tutor, Hope you are doing Well.
I have doubt in followings questions related to Contract Law.1) Aon displays a bracelet in his shop window. The price tag states “For sale at £50, a
real snip. Come in and buy. This is a genuine offer not to be missed.” Banja sees the
window display, goes into the shop, and says to Aon that she will buy the bracelet for
£50. Aon says it has been wrongly priced and refuses to sell it.
Which of the following is correct?a) No contract has been made because there is no offer
b) No contract has been made because Banja made a counter-offer which Aon has
rejected
c) A contract has been made between Aon and Banja
d) No contract has been made because Banja made an offer to Aon which Aon has
rejectedMy Question – Although Exhibition of an Item and Price List is not an Offer,
but shouldn’t the wording such as “Come in and Buy. This is a Genuine Offer not
be missed” gives an impression of a Unilateral Offer.As one of the Question that goes by the name of “Ann” in Kaplan Study Text
states the statement of “‘Opportunity to own a unique Bell print for £500 cash.
Offer valid for one day only – tomorrow Saturday.” in Newspaper is an Offer
rather than an Invitation to Treat.2) 2) The presumed intention to create legal relations CANNOT be rebutted in
contracts between which of the following?
1 Business associates
2 Family members
3 Friends?
a) 2 and 3 only
b) 1 only
c) Neither 1, 2 nor 3
d) 1, 2 and 3Ans- 1 Only.
My Question – Although Contract Law would have a very strong presumption
that there is an Intention to create Legal Relationship, however, the presumptions
can be rebutted in both Commercial and Social & Domestic Agreement. So Shouldn’t the right answer be “Neither 1,2 &3” rather 1 only.3) In breach of contract, TBT plc refused to sell a set of ACCA LW Class
Notes to Stu at the agreed price of £15. If such class notes are readily available
on the market at a price of £20, which of the following is correct?a) Stu is entitled to damages of £20.
b) Stu is entitled to damages of £5 plus any other non-remote losses such as his
expenses incurred in seeking out alternative sources of supply.
c) Stu is entitled to damages of £15.
d) Stu is entitled to damages of £5.Ans- Option D.
My Question – Why option B is not correct? Since, the losses are
Non-Remote, they would be passing the Test of Remoteness of Damage.
Furthermore, As per Open Tuition Ai, the Correct Answer shall be Option B.4) Which of the following is NOT an exception to the rule of privity of
contract?a) A Third party to a contract can sue for losses they incur under a contract if
the losses are foreseeable
b) A Third party to a contract can bring an action under it if an implied trust
has been created
c) A Third party to a contract can enforce rights under it if it is equitable for
them to do soCorrect Ans – Option A.
My Question – As per the Case Law of “Linden Gardens Trust Ltd v Lenesta
Sludge Disposals Ltd 1994, the Judgement was that “As the transfer was in the
contemplation of both parties the original beneficiary could claim full damages on
behalf of the third party”Which means that in case the Original Party at the Time of Contracting could
foresee or predict any breach of Contract would cause Loss to a third party, in
such case the Actual Contracting Party can claim damages on behalf of 3rd party
rather than “A Third Party to a Contract can sue for losses”.
So how come Option A Could be Correct ?I Hope you would be able to help me, as i look forward for your views on these questions. Thank you.
I’m going to take these one at a time – and in future it would be preferred if you could post them one at a time, and with a more descriptive heading than simply ‘Contract Law’. The reasoning behind my request is because other students review these questions and answers and it would help them when looking for Q and A on a particular area of Contract Law..
OK?
Now for the response that you have requested:
1) Aon displays a bracelet in his shop window. The price tag states “For sale at £50, a
real snip. Come in and buy. This is a genuine offer not to be missed.” Banja sees the
window display, goes into the shop, and says to Aon that she will buy the bracelet for
£50. Aon says it has been wrongly priced and refuses to sell it.
Which of the following is correct?a) No contract has been made because there is no offer
b) No contract has been made because Banja made a counter-offer which Aon has
rejected
c) A contract has been made between Aon and Banja
d) No contract has been made because Banja made an offer to Aon which Aon has
rejectedMy Question – Although Exhibition of an Item and Price List is not an Offer,
but shouldn’t the wording such as “Come in and Buy. This is a Genuine Offer not
be missed” gives an impression of a Unilateral Offer.Ooooh! This is a tricky one – there was a past exam question with similar (but not the same) wording where the examiner’s answer explained that, having notified acceptance of ‘this is a genuine offer’ where the ‘acceptor’ indicated that they needed to go to the bank to draw the cash that was stipulated in the ‘cash only’ notice, there was a genuine offer and resultant acceptance.
This case of Aon and Banja is missing some major elements making it dissimilar from the past exam question.
I sympathise with your thinking but I’m personally not convinced that the wording is sufficient to indicate an ‘offer available for acceptance’.
Therefore, I’m rejecting option b – if there’s no offer, then there can’t be a counter-offer.
I’m rejecting option c because I don’t see an offer and therefore I see no acceptance and so no contract
I’m also rejecting option a. ‘No contract because there is no offer’ Well, there IS an offer. It’s either Aon’s notice / advert or it’s Banja’s ‘acceptance’ – if Aon’s isn’t an offer, then Banja’s ‘acceptance’ must be the offer … so there IS an offer and therefore option a cannot be correct
But option d ‘No contract has been made because Banja made an offer to Aon which Aon has rejected’ ticks all the boxes and that’s the one I’m going for.
But, I repeat, this is a tricky question. IF option a was incorrect and that there IS an offer available for acceptance, then option c must also be correct.
Looked at from the other angle, if option c is correct, then an offer must be seen to have been accepted and ALL the remaining 3 options must be incorrect – all start with ‘No contract …’
I’m not familiar with the Kaplan case / question to which you refer and I don’t have access to it – sorry
I that OK?
Your second question:
The presumed intention to create legal relations CANNOT be rebutted in
contracts between which of the following?
1 Business associates
2 Family members
3 Friends?
a) 2 and 3 only
b) 1 only
c) Neither 1, 2 nor 3
d) 1, 2 and 3Ans- 1 Only.
My Question – Although Contract Law would have a very strong presumption
that there is an Intention to create Legal Relationship, however, the presumptions
can be rebutted in both Commercial and Social & Domestic Agreement. So Shouldn’t the right answer be “Neither 1,2 &3” rather 1 only.If you can accept / establish / decide that any one of the three options is correct AND anyone of them is incorrect, then we can discard options c and d.
But, taking the 1, 2 and 3 separately, there is a general presumption that commercial; contracts are made with the intention of creating legal relations. I suppose (though I can’t remember ever coming across it) that it would be technically possible to insert into a commercial agreement that, for example, it were to be ‘binding in honour only’ but that has to be so remote a possibility that I’m happy to discount it. In addition, for it to be rebuttable, I would propose that the contract itself would make it clear that it was not to be considered ‘made with intention …’
Now consider either 2 or 3, family members and friends respectively
I doubt whether you are at all concerned about the rebuttability of friends and relative contracts and I assume that you are happy enough to accept that these ARE rebuttable.
So 1 is NOT rebuttable, 2 and 3 ARE rebuttable.
And there’s your answer
OK?
Now to the next question:
In breach of contract, TBT plc refused to sell a set of ACCA LW Class
Notes to Stu at the agreed price of £15. If such class notes are readily available
on the market at a price of £20, which of the following is correct?a) Stu is entitled to damages of £20.
b) Stu is entitled to damages of £5 plus any other non-remote losses such as his
expenses incurred in seeking out alternative sources of supply.
c) Stu is entitled to damages of £15.
d) Stu is entitled to damages of £5.Ans- Option D.
My Question – Why option B is not correct? Since, the losses are
Non-Remote, they would be passing the Test of Remoteness of Damage.
Furthermore, As per Open Tuition Ai, the Correct Answer shall be Option B.I have to admit being temporarily taken by surprise to read that option B was noted as incorrect and that option D was the chosen one (not THE chosen one!)
So I too checked on AI. The key word in the stem is ‘non-remote’ – and under the principles of remoteness of damage claims, a plaintiff may successfully claim for compensation of the incurrence of expenses that were (or should have been) reasonably foreseeable at the time of the breach.
My answer, as is yours too, would be option B
OK?
And question 4:
Which of the following is NOT an exception to the rule of privity of
contract?a) A Third party to a contract can sue for losses they incur under a contract if
the losses are foreseeable
b) A Third party to a contract can bring an action under it if an implied trust
has been created
c) A Third party to a contract can enforce rights under it if it is equitable for
them to do soCorrect Ans – Option A.
My Question – As per the Case Law of “Linden Gardens Trust Ltd v Lenesta
Sludge Disposals Ltd 1994, the Judgement was that “As the transfer was in the
contemplation of both parties the original beneficiary could claim full damages on
behalf of the third party”Which means that in case the Original Party at the Time of Contracting could
foresee or predict any breach of Contract would cause Loss to a third party, in
such case the Actual Contracting Party can claim damages on behalf of 3rd party
rather than “A Third Party to a Contract can sue for losses”.
So how come Option A Could be Correct ?Surely, because option A suggests that, in the circumstance of losses being foreseeable, the THIRD PARTY should be able to claim for those foreseeable losses whereas your own summary of the law (in the immediately preceding paragraph) concludes that ‘the ACTUAL CONTRACTING PARTY can claim damages on behalf of 3rd party’
OK?
Thank you Tutor,
Firstly from next time I will post all my questions one at a time and with a more descriptive heading.
Secondly coming to the Question of “Aon”, I read the statement again, could it be because of the wording such as “Come in and Buy”, which might be making it as an Invitation to Treat rather than an Offer itself, as it is clearly an Invitation for any interested party to come in and make an Offer rather than to Accept an Offer.
Thank you Tutor,
But I still have doubt in relations to this question.
Can you tell me how can a “Third Party” sue for Losses?, when it would actually be the “Original Party” suing the party as breach and not the Third party itself? (As it would not be allowed by the Doctrine of Privity).Or is it because of Contract Act 1999, because of which it would be able to do so?
I believe that the case Shanklin Pier v Detel Products established this exception to the rules of privity.
If this leaves you still in doubt, post again
OK?
re your query about Aon, I believe that the case Partridge v Crittenden is relevant – an advert that ‘offers for sale’ is not an offer. Rather, it is an invitation to treat.
But I go back to my previous post on this question – there was a question many years ago where the wording was ever so slightly different than Aon’s wording and the examiner construed that to be an offer.
As I also said in my previous post, it’s a tricky issue!
OK?
- You must be logged in to reply to this topic.