UNIVERSITY TON 3 tev Vole Wa OF LONDON IL, AWS Formative Assessment Contract law Answer and Feedback Indicative Classification: Upper Second STUDENT ANSWER The question is concerned with difficulties asso: intention) in forming a contract. ted with ingredients (offer, acceptance and legal The fist issue to be considered is whether the 2 sisters (Adele and Bella) have the intention to form a legally binding agreement or contract. The doctrine of intention is to be objectively interpreted and is based on public policy. The general rule is that law of contract would not intervene in domestic situations because otherwise, the court would be flooded by trivial domestic disputes. In Balfour v Balfour, the court held that the agreement between the wife and husband was not to be intended have legal consequences. However, this general rule is merely a presumption that parties to a domestic agreement do not intend to create legal relations and the presumption can be rebutted by evidence of contrary intention. One of the factors in considering if presumption could be rebutted is the context in which the agreementtis made. If the context is perceived by court to be a business one, then it is likely that the presumption would be rebutted. In Snelling vJohn G Snelling Lid, it was held that legal relations were created by the three brothers who entered into agreement in relation to operation of a company. Here, on 1st of February, Bella expressly told Adele that the carifto be sold, would be on a “business basis’. As such, the requirement of intention to create legal relation is satisfied Second issue is whether, on Ist of February, Bella made an offer or an invitation to treat to Adele. Offer as defined by Treitel is an expression of willingness to contract on specified terms made with the intention that it shall become binding upon accepted by the person to whom itis addressed. On the other hand, an invitation to treat is a situation where the party does not make the offer but invites the other party to do so. This occurs when parties are in a stage of negotiation and these ry exchanges are not intended to be binding. Therefore, the distinction between the two is primarily a matter of intention. This can be illustrated with a pair of cases- Gibson v Manchester City Council and Storer v Manchester City Council, Both cases involved issue with the same defendant but the court held that a contract was made in the latter but not in the former. A key distinction between the two cases is that in Storer’s case there was an agreement as to price, but in Gibson's case there was not. In Gibson’s case, important terms were yet to be determined. On facts, Bella told Adele that the car was to be sold at “about £100,000" and hence it can be inferred that the price was not conclusive and subject to negotiation. Thus, Adele is advised that on Ist February, an jon to treat was made to her, instead of an offer. Subsequently on the same day, Adele emailed to Bella that she “accepts Bella's offer’ for the car. The issue here is whether the email could be regarded as an offer or acceptance. As discussed above, an invitation to treat was made to her instead of an offer, therefore the email she sent was just an offer even though quoted as an "acceptance" because the law looks to the substance instead of form of communications. In Hyde v Wrench, the alleged acceptance was held to be an offer while in Pickford v Celestica, an alleged acceptance was held to be a counter offer. As such, Adele is advised that her email was just an offer. Page 1 of 2Formative Assessment 2019 The next issue is concerned with whether the reply from Bella to Adele's email amounts to an acceptance or counter offer (rejection of offer). it was a counter offer, the next issue is whether silence could amount to acceptance. An acceptance as defined by Treitel is an unqualified assent to the term of the offer, the acceptance must mirror the offer. A communication may not be an acceptance ifit does not accept all terms & condition in the offer. If acceptance seeks to introduce a new term which is not contained in the offer, this will be a counter offer. The effect of which is that it will kill the original offer and replace it with a fresh offer to be accepted by the other party (Hyde v Wrench). On fact, by increasing the price of the car, this amounts to a counter offer instead of acceptance. Given that the reply from Bella was received by Adele, though partially read, the communication is effective (The Brimne9. Thus, Adele is advised that Bella has rejected Adele's offer with a counter offer. If Adele intended to accept the counter offer made by Bella, the general rule is that acceptance is not effective until it is communicated to the offeror (Bella). In other words, acceptance cannot be made through silence. In Felthouse v Bindley, claimant was negotiating to buy a horse from his, nephew. The claimant wrote to his nephew offering that if he hear no more from his nephew, the horse is considered his. His nephew did not reply but told the defendant (auctioneer) to remove the horse from auction. Defendant failed to do so, and the horse was sold to a third party. Court held that there was no contract as silence cannot be amounted to an acceptance. Hence, by imposing silence as a means of acceptance upon an unwilling party is not permissible and as such Adele is advised that she is not required to fulfil Bella demand of £125,000 for delivery of the car. Alternatively, if on 3rd February, upon reading Bella's email, Adele decided to accept the counter offer, the question is whether the acceptance is valid even though no communication is made. The rule laid down in Felthouse v Bindley is not without exception or limit. In Carlill v Carbolic Smoke Ball Company, the Court of Appeal held that offeror may waive the need of communication of acceptance. Besides, in Re Selectmove Ltd, the Court of Appeal recognised, in an obiter statement, that if an offeree agrees to silence being a means of acceptance then failure to communicate with the offeror is equivalent to acceptance. As such, if Adele decided to accept Bella's counter offer, no ion of acceptance is required because she expressly waive the requirement of ion when she imposed silence as a means for acceptance. EXAMINER FEEDBACK COMMENTS Nice short start to identify the issues. You have a long explanation of ICLR and reach a clear conclusion and do eventually apply to the given facts, perhaps get to this point more directly. You move clearly on to the next issue and refer to the cases which wil illustrate the key points. You then explain that cases look at A’s email as an offer but its the certainty of that email which is crucial, In relation to 8's reply, you say ‘if it was a counter offer’ but you need to explain if itis or not, so you would have usefully discussed Hyde v Wrenchat the outset. There is no suggestion that it is an acceptance, so you wander a little here. You then consider the silence issue with good reference to relevant law, but try to be more concise and do not discuss the facts of cases in detail. In the alternative you consider the persuasive authority for silence being acceptance. So overall this is a good answer but you need to be a little more direct in advising on the facts of the problem questions. So restructure some of your answer to being with, ‘When A did this...’ then the law it will make your arguments more forceful, Page2of2