University of Aberdeen School of Law

CONTRACT (LS1520)

TUTORIAL PROBLEMS
TUTORIAL 1
Objective: The purpose of this tutorial is to develop understanding of the process of
contract formation. It requires the principles covered in lectures to be applied to a
practical situation.

Preparation: You should identify:

(a) Instances in which a contract has been concluded.

(b) Instances in which there was a failed attempt to conclude a contract.
(c) Whose standard terms and conditions will apply?
(d) Instances in which there has been a breach of contract.

You are expected to be able to discuss these issues during the tutorial.

Buying and Selling Widgets

ORIGINAL ADVERT IN HIGH-TEC METALS MONTHLY

“Grampian Widgets, Aberdeen offer for sale the last ever batch of our Digital-Supa-
Widget Mark 7.
Bulk orders are preferred. Price - £1000 per widget.”
All good as sold under out standard terms and conditions which are available online
at our website Grampian.widgets.co.uk

On the website the standard terms and conditions are:

1. All our contracts are governed by Scots law and any disputes will be subject to
the sole jurisdiction of the Scottish Courts.
2. All goods are supplied on a no recourse basis and no compensation will be
offered for defective goods.

1000 widgets were produced in this batch. Look at the following extracts from the
communications which then took place between the parties.

COMMUNICATIONS TO GRAMPIAN WIDGETS

Letter of 1 June from Comacme Ltd, Aberdeen

“With regard to your recent advert in High-Tec Metals Monthly we have pleasure in
enclosing our cheque for £50,000 for the purchase of 5,000 widgets.”

Letter of 2 June from Grasp Technical, Inverness

“We cannot accept the price quoted in your offer in High-Tec Metals Monthly. But we
will purchase your entire stock at £750 per item. Please confirm receipt of our
acceptance.”
 Fax of 2 June from Schmücker GmbH, Germany
“Re your advert in High-Tec Monthly. We are prepared to offer for your entire stock at
the price quoted. Should goods fail to conform to our quality standard, or not perform
satisfactorily, we shall be entitled to reject same and you will be obliged to reimburse
us pro rata.”

COMMUNICATIONS FROM GRAMPIAN WIDGETS

Letter of 3 June to Comacme Ltd

“Re your letter of 1 June 1998. In view of the interest in our product we have raised
the per unit price to £2000. 25 units are set aside for you and we await payment for
another 25 units.”

Letter of 3 June to Grasp Technical

“Thank you for your letter of 2 June. We may be prepared to sell at a price of £750
per unit, subject to confirmation that you will take entire stock. We await your early
reply.”

Fax of 3 June to Schmücker GmbH

“Thank you for your fax of 2 June. Supply of our product is on a no recourse basis.
Goods will be dispatched on receipt of your confirmation of order. It is understood
that freight will be met by you and that we will arrange insurance.”

SUBSEQUENT EVENTS

Fax of 8 June from Schmücker

“We are agreeable to your terms on freight and expect delivery as per our fax of 2
June to you.”

On 10 June Grampian Widgets despatched 950 widgets to Schmücker GmbH and

notified Grasp Technical that they had disposed of all the widgets. However, by fax
of 12 June Schmücker GmBH intimated their refusal to take delivery because the
widgets did not satisfy their quality control standards. On receipt of this fax,
Grampian Widgets faxed Grasp Technical accepting their offer of 2 June. They also
write to Comacme Ltd demanding payment of £25,000.

Grampian Widgets are now unsure of their position and are being pressed by
Comacme Ltd and Grasp Technical. Comacme Ltd take the view that they are
entitled to receive 50 widgets at £1000 each. Grasp Technical are of the opinion that
they have a contract for the purchase of 1000 widgets. Grampian Widgets are
unsure of their position vis-à-vis these businesses. They also think that they may
have an action for damages for breach of contract by Schmücker.
TUTORIAL 2
Objective: This tutorial concerns the various tests which are applied to determine if a contract
term is valid
Preparation: You should prepare for the tutorial by answering all the questions.

The Misadventures of Cedric

Cedric Brown celebrated his 17th birthday on 1 April 2018. On 2 April his father dies,
leaving Cedric a large farmhouse with surrounding farmland, and £1M in cash.

When a grief stricken Cedric meets his mum at the funeral his mother says “Please
Cedric, promise me you will look after me now that daddy is dead! I am lost without him”
Cedric replies, through his tears “Don’t worry mum, I’ll see you all right, I love you and I
promise you can stay in the farmhouse for life. I’ll find somewhere else to live. “Thank
you so much, sweetheart!” replies Mrs Brown.

Cedric is a dog lover and in May he posts a signed letter to the Aberdeen Dog Protection
League saying: “I will pay the Aberdeen Dog Protection League £100,000 no later than
December 2018 in order to support your wonderful cause.” The charity writes back
thanking him.

In June, Cedric decides to sell off the farm and the surrounding land of 500 acres. Cedric
places the farmland (but not the farm house) up for sale at offers over £10 million. Mr
Swick, who is a wealthy geologist, agrees to buy the farmland for £10M on 10 th June.
Swick believes there are valuable coal deposits under the farmland but fails to mention
this to Cedric. After he has bought the farm Swick conducts a geological survey which
confirms there is a large coal seam under the estate worth at least £100 million and he
sells the farmland onto Scots Coal Ltd for £100 million in October.

Angered at this turn of events, in November Cedric kidnaps Swick and threatens him
with a loaded gun unless he signs an agreement to transfer £50M into Cedric’s bank
account. A terrified Swick signs the agreement and transfers the money.

When Cedric’s mother hears of his kidnapping, she gives him a row and an angry Cedric
tells her that she must move out of the farmhouse and that he will no longer pay her
£10,000 a month.3

Cedric is badly bitten by a dog on November 5 and now hates the creatures and so he
writes and posts a letter to the Aberdeen Dog Protection League that he has no intention
of paying them a penny.

To console himself in his troubles Cedric decides to buy a kilo of cannabis from Dealer
Dave for £10,000. He pays cash but when he gets home he discovers he has been sold
herbal tea. Cedric tells Dave he is going to take him to court to get his money back.

Questions
1. Must Cedric’s mother leave the farmhouse?
A promise with his mother- voluntary obligations
A promise is a Unilateral contract- they act when they are made
His promise is not in writing- Unilateral gratuitous obligation
Requirements of Writing Scotland Act 1995
Even if it had been in writing he probably would have got off the hook due to facility
and circumvention due to him making a loss- his mother living in his house for free
is a loss for him
Facility= his father died
Questions of facility and circumvention are questions of facts
MacGilvary V Gilmartin 1986
 Only land and promise need to be in writing, everything else is verbal
Could also be linked to undue influence
His age may also affect it
2. Can the Aberdeen Dog Protection League force Cedric to pay them £100,000?
He is unable to cancel the promise because its in writing
The promise acts once made
3. Is the sale of the farmland to Swick legally valid? Could Cedric legally demand that
Swick share some of the £100m with him on the grounds he would never have sold
the land so cheaply if he had known about coal reserves?
There is no misrepresentation- the seller is ignorant
Silence does not amount to misrepresentation- the law is the opposite to common
sense
Gray v Binny 1879
4. Is Swick’s agreement to pay Cedric £50M legally enforceable?
Unfair pressure is applied to secure consent to this contract- force and fear
Earl of Orkney v Vinfra 1606- Courts held the contract invalid and preferred
Vinfra’s account of events. The Lords of Session found the exception of fear very
relevant.

5. Can the Aberdeen Dog Protection League demand payment of the £100,000?
6. Can Cedric sue Dave to get his £10,000 payment for the fake cannabis back?
The courts will not interfere to relieve the party
In addition, the transaction between Cedric and Dave is an illegal one
Illegal contracts can’t be enforced
If anything was to get him out of it, it would be misrepresentation because he was
lied to

TUTORIAL 3

1. Susan’s Repair Bill and 2. Yesco Parking

Problems
Objective: to promote an understanding of how 1. Consideration and privity operate in
English law, 2. How the ncorporation and application of contract terms apply

Preparation: Read the events below and the subsequent correspondence and then apply
the law

1. Susan’s Repair Bill.

Susan Smith lives with her elderly mother Ann Smith, in a cottage in Cornwall. The
cottage is owned by Mrs Smith. Mrs Smith suffers from dementia and Susan looks after
her. Susan has a brother Kevin who lives elsewhere. On day there is a violent storm
which badly damages the roof of the cottage. Urgent roof repairs are need and Susan
phones Cornish Roof Repairs to fix roof at a cost of £10,000. The contract reads:
“Cornish Roof Repairs agree to repair the roof at 1 Rose Cottage, Dartmoor for Susan
Smith for a price of £10,000.”
Shortly after the roof is repaired Mrs Smith dies. When Mrs smith’s will is read it turns
out that she left the house solely to Kevin. Kevin takes possession of the house which is
worth £200,000 but make it clear to his sister that he will not pay the bill sent by
Cornish Roof Repairs for £10,000.”
Quid juris? (What is the law?)

2.Parking Problems at Yesco

Yesco PLC are a supermarket chain with a branch in Aberdeen. At the entrance to the
supermarket car park is the following notice:
“This is private property. Customer use only. 2 hour max stay. No return
within 3 hours. Failure to comply with terms and conditions will result in an
£85 parking charge. All cars and good left solely at owner’s risk.”
In the early hours of the 1 April a severe storm blows the sign down. It is not put back in
position until the 4th April.
The following events happen to three different customers.

a. On the 2nd April Ann parks her car in the supermarket carpark, she spends 3
hours in the store and only then drives her car away. A week later a letter arrives
from Yesco demanding payment of the parking charge of £85 and threatening to
take Ann to court if she does not pay up within 21 days.
b. On the 5th April Bill parks his car in the supermarket carpark. He buys a paper in
supermarket but leaves his car there for 6 hours. A week later a letter arrives from
Yesco demanding payment of the parking charge of £85 and threatening to take Bill
to court if he does not pay up within 21 days.
c. On the 6th April Colin parks his car in the supermarket carpark. He is only there
for an hour but when he returns he notices that someone has smashed his
windscreen causing £500 of damage. Later, Colin sends a letter to Yesco
demanding £500 in compensation for his damaged car.
d. On the 7th April Debbie parks her car in the supermarket carpark. She is only
there for an hour but when she returns she notices that a Yesco Delivery van has
crashed into his car causing £1,000 of damage to her car. Later, Debbie sends a
letter to Yesco demanding £1,000 in compensation for his damaged car.

Discuss the respective legal positions of Ann, Bill, Colin and Debbie.