UNIVERSITY TON 3 tev Vole Wa OF LONDON IL, AWS Formative Assessment Contract law Answer and Feedback Indicative Classification: Third STUDENT ANSWER vA re 12! rice) for Ferrari C.will have a valid claim against D for the price for the car if tis established that the sisters reached a valid and enforceable agreement on these terms. ‘The main questions to consider in this case are whether there is a valid and communicated offer by Con and acceptance by D of such terms and whether there has been an intention to create legal relationship (ICLR). 1 February communication is largely irrelevant (but see below under the ICLR) in that it does not concern the price. 3 February exchange C's Offer C has made it clear that she has wanted to sell to D the car for the price and, objectively (Smith v Hughes: RTS Flexible Systems v Molkerei Alois Muller (UK) Production) there is nothing on the facts to suggests C has not intended to be bound by such terms as soon as they are accepted by Das the person to whom the statement has been addressed (Ireite) -although see below for a discussion of the parties’ ICLR. C’s statement is clear and precise (the car for the price): Storer v MPC cf Gibson v Manchester City Council. Iti a valid offer. It has reached D (on the facts: D annoyed on reading...). C's offer has been effectively communicated C’s has made a valid and communicated offer to sell to D the car for the price (Offer). D's Acceptance ‘The Offer requires an unqualified (Hyde v Wrench) expression of assent by D (as the person to whom is addressed: Boulton v Jones) to all the terms (Holwell Securities v Hughes) of the Offer. Objectively (Smith), there was no such expression of assent (on the fac further and did not reply). innoyed... deleted it without reading C suggested in the communication accompanying the Offer that D's consent would be effectively implied in the absence of email from D to the contrary. Generally, silence does notestablish a valid acceptance of an offer Gelthouse v Bindley), subject to limited exceptions: there is nothing on the facts to suggest acceptance by silence has been an established course of dealing between the sisters, D did not purport to hold C to her provision for D's acceptance eel, Treitel’s The Law of ntract, 13th edition), itis not D who suggested D's silence be treated as an implied acceptance (cf obiter on Re Selectmove),it is not D who initiated discussions which led to the Offer (cfRustv Abbey Life Insurance Co Ltd) There is no valid acceptance by D of the Offer. Page 1 of 3Formative Assessment 2019 ICLR Even if the courts were to consider D had validly accepted the Offer, it will still be necessary to establish if the parties exhibited the required ICLR. The ICLR concept is used by the courts to enable or deny the enforceability of agreements which they consider should or should not, on policy grounds, be enforceable (sued on) before the courts. There is a strong presumption against the ICLR in cases of dealings between family members (here, the two sisters) (Balfour v Balfour), aimed at keeping the contract “out of domestic cases” unless it has a “useful role to play’ (Hedley, 1985) and preventing opening floodgates of cases between the family members. It is in very limited circumstances that this presumption can be successfully rebutted, ‘The factors the courts would take into account include the context in which the agreement is made, whether the subject matter of the agreement is trivial, degree of reliance placed on the agreement and its certainty. While, the sisters met in a social setting (for a drink), C made it explicit that she wanted to sell to D “ona business basis.” It may be unlikely the courts will find C’s express statement [of such a basis] to be conclusive, as a matter of policy. Even in commercial agreements (where the presumption of an ICLR is a ‘heavy one’ and is not easy to rebut (Edwards v Sky Attrill v Dresdner Kleinworth), it may be unlikely an ICLR will be found for dealings in a social setting: in Blue v Ashley the courts rejected the possibility a reasonable person (Smith) could have thought an offer to pay made in a social setting in a public place was serious and intended to create a contract. Yet, in Snelling v Snelling the brothers (directors of a family company) were held to have the required ICLR in the context of an agreement as to the running of the company. Here, D wanted a car and C was willing to sell the car. Both sisters arguably dealt for a commercial purpose Gale and acquisition of the car), as in Snelling v Snelling (running of the company on a commercial basis). In Merritt v Merritt and Soulsbury v Soulsbury the agreement was upheld because the spouses were separated or about to separate and were not on “friendly” terms when dealing. Here, the sisters are not spouses (with no maintenance issues), and there is no evidence of animosity between them at the relevant time (so Merritt v Merritt and Soulsbury v Soulsbury may be distinguished on the facts). A sale and purchase of a Ferrari seems to be unlikely to be trivial to a reasonable man (Smith). In Darke v Strout and Simpkins v Pays a detrimental reliance by the offeree on an offer led the courts to establish an ICLR between family members (although again not siblings). These cases can be distinguished in that D does not seek to enforce her (assumed for the purposes of this ICLR discussion) acceptance of the Offer. ‘The Offer is certain (and a valid acceptance is assumed). On balance, it may be unlikely that C’s claim of the price for the car would succeed against D for want of D's valid acceptance of the Offer and lack of the requisite ICLR. Adel lla (D) re delivery of the car If C communicated to D her decision to purchase the car for the price, the Offer (see above) would have been validly accepted by C Peelabove). C may seek to rely on a promissory estoppel (PE). D (if ow unwilling to proceed with the Offer) may counter-argue that, technically, a PE cannot be used for a cause of action ("shield not a sword": Combe v Combe although, per Jill Pool, the nature and Page 2 of 3Formative Assessment 2019 exact limits of the doctrine of PE, remain unclear (Jill Poole, Textbook on Contract Law, 12th edition). Cssilence would not estop her from relying on D's promise (Vitol SA v Esso Australia). The same ICLR issue would arise as above under ICLR. Delivery was not part of the Offer. D offered to deliver three weeks later (Offer 2). On the facts, C neither decided not communicated her acceptance of Offer 2 before it has been effectively revoked by D's refusal Payne v Cave), C should be able to claim the car for the price, but not its delivery. EXAMINER FEEDBACK COMMENTS Unfortunately despite your knowledge of some case law the answer is not a strong one. The reason is that it is not well structured, contains some confusion, does not properly analyse the key statements and introduces some irrelevant discussion. With an agreement question you must analyse each communication chronologically. You defer the discussion of the first, 1st Feb communications to later in the answer. This is poor technique. | think you also confuse the question as to whether these communications were offers or invitations to treat with the question whether the parties’ dealings disclosed an intention to create legal relations. What you say about the Ist Feb messages is not accurate, the morning communication is probably an invitation to treat but the evening oneis probably an offer. Consequently the answer lacks balance and has too much discussion of intention to create legal relations and insufficient discussion of offer and acceptance. Further no issue of promissory estoppel arises. The issue in the second scenario is whether there isa contract and not whether a contract has been modified. This requires a knowledge of the limits of the principle that silence will not usually constitute acceptance. According to Rust v Abbey Life it can be acceptance when this does not, as in the second scenario, involve forcing a contract upon an unwilling party. Page 3 of 3