Scenario Three

Contract law is the legal domain concerned with the making and enforcing of deals.[1]A contract is a legal document that represents an agreement between two parties. For a contract to exist between two parties some seven key elements, need to be incorporated. In the absence of one of the seven items, the deal may be avoided, and the contracting parties will be excused of any obligations.[2] First, there has to be an offer. An offer marks the beginning of a contract and is usually a proposal by one of the contracting parties to the other. The other party can either accept or reject the proposal. [3]Secondly, there has to be acceptance. Acceptance symbolises agreement to the proposal made by the other party. A contract also has to have a consideration, which refers to something valuable that the two parties are contracting to exchange. [4]The contracting parties also need to have the competence and capacity to enter into a contract for the deal to be valid. A valid contract also has to incorporate mutual consent from the two contracting parties for it to be enforceable.  Besides, an agreement will only be binding if the activity covered by the contract is legal.[5]  When ruling on cases pertaining contracts, courts usually consider the intentions of the contracting parties. [6]This essay, by referring to various relevant authorities and case laws, and using the IRAC framework offers an evaluation of three contract law case studies. Through this, appropriate advice gets given to Shazia in each of the scenarios.

Scenario One

Issue

The underlying issue, in this case, is whether there exists a valid contract between Shazia and Archie. Archie had made an order to purchase chocolate cupcakes at £1 each in line with an advert posted by Shazia; however, she found that the shop was closed and thus left a message on the answering machine. On the next day, Archie demanded to be supplied with the cupcakes at a price of £1 each; however, Shazia refused, claiming that the cakes cost £1.20 each.

Rule

A contract gets created only through a matching offer and acceptance. However, this is not necessary for performance-based contracts.

Analysis

As mentioned earlier, a contract gets valid when an offer is made by one of the contracting parties, and the other party accepts the particular offer. In case, the other party does not take the offer; then there exists no contract. As illustrated in the case of Lord Denning in Entores v Miles Far East Corp (1955)[7],

if one individual shouts an offer to another person across the river, but the reply does not get heard because of an overhead flying plane, then there exists no contract. Besides, in the Holwell securities v Hughes (1974), the deal was deemed invalid as one of the parties did not reply to the offer made. [8]The contract underlining the case concerned itself with a notice to buy property. The buying of the property could only be exercised through a notice in writing. The buyer of the property exercised his right through writing, but the letter was lost through the post office. Later on, the buyer claimed specific performance of the contract. However, the court of Appeal, and in particular Lawton LJ dismissed the claims of the buyer arguing that there was no contract as the plaintiff failed to equip the defendant with what he intended to do. Conceivably, the case illustrates that an agreement is only enforceable if there is acceptance to the offer made by one of the parties.

Arguably, the above mode of analysis of offer, counter offer, rejection and acceptance are out of date. As such as noted by Lord Wilberforce in the New Zealand Shipping Co Ltd v AM Satterthwaite, the best way of testing the validity of contracts is by analysing all the documents passing between the two parties to determine if they reached to an agreement.[9]

Besides, as posited by Lord Cairns L.C in Brogden v Metropolitan Railway Co (1877); [10] the critical test for the validity of a contract is a consensus between the two parties. Explicating the criteria mentioned above, to the case of Archie v Shazia, it is evident there exists no enforceable contract between Shazia and Archie, as the two of them never reached a consensus. An offer was made, but the other party did not accept the offer.

Conclusion

Shazia should not sell the cupcakes to Archie at the price of one pound each. Although Archie made an offer to buy, Shazia did not consent to the proposal either through complete or incomplete description and as such, there is no enforceable contract.

Scenario Two

Issue

In this particular case, Brenda had posted a letter to Shazia ordering a hundred buttercream cupcakes. Shazia was to deliver the buttercream cupcakes to Brenda premises on November 10th. In the letter, Brenda made a disclaimer that unless she heard from Shazia within a week, then she would assume they have a contract. One week and a day later, Shazia sent Brenda a letter agreeing to her proposed offer. However, the letter posted by Shazia never reached Brenda. Two weeks before the date set for the delivery of the cupcakes, Brenda telephoned Shazia and informed her she was no longer interested in the contract. Thus, the underlying issue herein is whether there exists an enforceable agreement between Brenda and Shazia and if Shazia can sue Brenda for the breach of the contractual terms.

Rule

 A contract is valid for as long as an offer is made by one of the parties and accepted by the other party.

Analysis

The issue in the case of Brenda v Shazia is perhaps best captured in court’s ruling in Felthouse V Bindley (1862). [11] In this particular case, Paul Felthouse intended to buy a horse from his nephew John Felthouse. After repeated discussions between him and the nephew, Paul replied to John through a letter instructing him that, if he no longer hears about the horse, he would consider the horse his. Paul never got to hear about the horse again as John was busy in the auctions. However, William Bindley, the man, running the sales accidentally sold the horse. As a result, Felthouse sued Bindley for selling what was his. The court ruled that Felthouse could not claim ownership of the horse as there was no acceptance of the terms of the contract. Plausibly, the court contended that consent to the terms of the agreement needs to be well communicated and cannot be imposed by the silence of one of the parties. Also drawing analogies to the  Foakes v Beer case, where the court ruled that a promise to accept debt is not binding, we can conceptualize the contractual dealings between Shazia and Brenda as mere promises. [12]Explicating the above court’s reasoning to Brenda v Shazia case, it is apparent there exists no contract between Brenda and Shazia, since Brenda never received formal acceptance of the contract terms from Shazia. Similar reasoning gets replicated in Umar SA v Norelf Ltd[13]

and Rust v Abbey Life Assurance Co Ltd.[14]

Conclusion

There was no contract between Shazia and Brenda in the first place, and as such, Brenda is at liberty to instruct Shazia not to deliver the cupcakes as initially communicated without any meaningful legal repercussions.

Scenario Three

Issue

In this particular scenario, the underlying issue is whether there exists a valid contract between Shazia and Bovis Flour Co. Shazia had anticipated an increase in demand of her cupcakes. In this regard, she made an order for a hundred kilograms of plain flour on her standard terms and conditions. Shazia’s standard terms and conditions had a particular clause which permitted her to return any unused bags of flour within two weeks of delivery should they not be used. Bovis Flour Co later replied to Shazia order acknowledging it but accepting it under their terms. According to Bovis Flour Co terms, customers were not permitted to return any unused bags of plain flour within two weeks of delivery. Besides, Bovis Flour Co letter had a tear slip, which Shazia had to tear and sign, and return it to Bovis Flour Co. Shazia did not sign on the tear slip but instead filed it. Later on, Shazia decided to return the bags to Bovis Flour Co, as she did not meet her anticipated demand of goods.

Rule

A contract is valid for as long as an offer is made by one of the parties and accepted by the other party.

Analysis

The details of the above case are synonymous to the case of Brogden v MRC (1877).[15]

In this particular case, Brogden had been supplying MRC with coal for an extended period without any formal agreement. Later on, however, MRC sent a draft contract to Brogden who signed it through an arbitrator before forwarding it to MRC. When a dispute arose, later on, Brogden alleged that there was no binding agreement between the two of them. The Lordship dismissed Brogden claims and argued that there was a contract. The court explained that Brogden returning the document was not an acceptance but a counteroffer that would be considered enforceable when he agreed to supply MRC with coal. In our case, Bovio Flour Co returning of the letter represents a counter offer that became enforceable once the enterprise provided Shazia with plain flour. The same reasoning gets explicated in Carlill v Carbolic Smoke Ball Company [16]and Gibson v Manchester City Council.[17]

Conclusion

Shazia should return the unused packets of plain flour to Bovio Flour Co Ltd.

To sum it up by reviewing various statutory provisions and case laws, the paper has offered a detailed analysis of the three scenarios Shazia Faces. Through this, the article has developed appropriate advice for Shazia in each of the cases.

Works Cited

Andrews, N.,. Contract law. [2015] Cambridge University Press.

Austen-Baker, R.,. Implied terms in English contract law.[2017] Edward Elgar Publishing.

Brogden v. Metropolitan Railway Co, 2 App. 666 (1877).

Carlill v. Carbolic Smokeball Co, 1892 E.W.C.A. Civ 1 (1892).

Elliott, C. and Quinn, F.,. Contract Law 10th Edition Mylawchamber Pack. [2015] Pearson Education Limited.

Entores Ltd. v. Miles Far East Corpn, 2 Q.B. 327 (1955).

Felthouse v. Bindley, 11 C.B.N.S. 869 (1862).

Foakes v. Beer, 9 App. 605 (1884).

Heilbut, Symons & Co. v. Buckleton, 1913 A.C. 30 (1913).

Holwell Securities v. Hughes, 1974 W.L.R.1 155, 1973 E.W.C.A. Civ 5 (1974).

New Zealand Shipping Co Ltd v. AM Satterthwaite & Co Ltd, 1975 A.C. 154 (1975).

Poole, J.,. Textbook on contract law.[2016] Oxford University Press.

Rust v. Abbey Life Assurance Co Ltd, 1979 Lloyd 2 71, 1979 Lloyd’s Rep. 2 334 (1979).

Stone, R. and Devenney, J.m. The modern law of contract.[2017] Routledge.

Umar SA v Norelf Ltd

[1] Andrews, N.,. Contract law. [2015] Cambridge University Press.

[2] Austen-Baker, R.,. Implied terms in English contract law.[2017] Edward Elgar Publishing.

[3] Poole, J.,. Textbook on contract law. [2016] Oxford University Press.

[4] Elliott, C. and Quinn, F.,. Contract Law 10th Edition Mylawchamber Pack. [2015] Pearson Education Limited.

[5] Stone, R. and Devenney, J.m. The modern law of contract.[2017] Routledge

[6] Heilbut, Symons & Co. v. Buckleton, 1913 A.C. 30 (1913).

[7] Entores Ltd. v. Miles Far East Corpn, 2 Q.B. 327 (1955).

[8] Holwell Securities v. Hughes, 1974 W.L.R.1 155, 1973 E.W.C.A. Civ 5 (1974).

[9] New Zealand Shipping Co Ltd v. AM Satterthwaite & Co Ltd, 1975 A.C. 154 (1975).

[10] Brogden v. Metropolitan Railway Co, 2 App. 666 (1877).

[11] Felthouse v. Bindley, 11 C.B.N.S. 869 (1862).

[12] Foakes v. Beer, 9 App. 605 (1884).

[13] Umar SA v Norelf Ltd

[14]

Rust v. Abbey Life Assurance Co Ltd, 1979 Lloyd 2 71, 1979 Lloyd’s Rep. 2 334 (1979).

[15] Brogden v. Metropolitan Railway Co, 2 App. 666 (1877).

[16] Carlill v. Carbolic Smokeball Co, 1892 E.W.C.A. Civ 1 (1892).

[17] Gibson v. Manchester City Council, 1979 W.L.R.1 294 (1979).