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YEAR OF STUDY: Year 1 UNIT TITLE: Contract Law UNIT CODE: LAWD10008

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Answer for Section A(1)

In this scenario, there seem to be at least three potentially legally binding contracts;
however, only one can be upheld as Zachary is only in possession of a single set of ‘30
Bridport style office desks,’ which he claims are ‘as good as new.’ As Guenter Trietel, a
professor of law defined a contract as 'an agreement giving rise to obligations which are
enforced by the law’ (Trietel, 2015). There are three critical pieces to the formation of a
contract that not all of the interactions in this scenario satisfy. They are that of an agreement
amongst the parties, each party's intention, and considerations.
Zachary, in this case, is the offeror, and his original offer consists of the whole set of 30
desks for the price of 500 pounds. The offeror, in this case, promises that the 'first person to
provide a cheque will receive [the] desks.' He promises this in an advertisement in a local
free newspaper, this is Zachary's offer, and an offer, by legal definition, is 'an expression of
willingness to contract on specified terms, made with the intention that it is to become
binding as soon as it is accepted’ (Trietel, 2015). As the scenario provides, on Tuesday, a
prospective offeree enters into a unilateral contract with Zachary the moment he sends a
cheque for 500 pounds as per the advertisement's requirement. As a result of a postal strike,
that cheque never arrives; therefore, Zachary is still unaware that he has entered into a
contract with Paul, the offeree. The case of Household Fire Insurance v Grant [1879] is a
solid precedent to suggest that contractual liability was in place in this situation. In his
judgment on the case of Household Fire Insurance v Grant [1879], Lord Justice Baggalay
said that; ‘If an offer is made by letter and a letter of acceptance properly addressed is
posted in due time, a complete contract is made at the time where the letter is posted’
(Household Fire Insurance v Grant, 1879). The aforementioned case is a classic example of
the postal acceptance rule. In the scenario, Paul has responded to the offer made by the
offeror, Zachary. According to the case of Household Fire Insurance v Grant [1879], this
contract was legally binding and effectively enforceable when the proceeding discussions
Zachary had with other potential offerees came to fruition. Thus, for the purpose of this
scenario, this contract has not yet been concluded.

Since Zachary's letter had not arrived, another offeree entered into conversation with
Zachary with the intention of forming a contract to acquire the goods that Zachary was
providing. Albert, the new offeree, however, proposed a counter-offer to the original offer
proposed by Zachary. The negotiation took place over the phone, and unfortunately, the call
was interrupted by Albert's phone, which ran out of battery. Since the phone ran out of
battery, Albert, who was now the offeror, since he proposed a counter-offer of 475 pounds
for the thirty desks as opposed to the original 500-pound offer made by Zachary, never
actually heard Zachary say, ‘but I accept £475.' The ruling in the case of Felthouse v Bindley
[1862] is relevant to this situation. In the Felthouse v Bindley [1862] case, Felthouse had a
conversation with his uncle, Mr. Bindley, about buying his horse. A letter was then sent;
however, his nephew never replied; therefore, the horse still belonged to Mr. Bindley, and he
was in his right to sell it. He proceeded to accidentally sell this horse in an auction, going
against Felthouse’s advice. Mr. Bindley was sued by Felthouse in the tort of conversion with
the aim of proving that the horse was his property and, therefore, a valid contract was
breached. Similarly to this scenario, Mr. Bindley, like Albert, never actually heard the contract
be agreed upon. Regardless of this fact, Albert sent a cheque to the post, which also never
arrived due to the same strikes that affected the arrival of Paul's cheque. In the Judgment of
the Felthouse v Bindley [1862] case, Willes J. said that 'It is clear, therefore, that the nephew
in his own mind intended his uncle to have the horse at the price which he (the uncle) had
named,’ he continues by saying, ‘but he had not communicated such his intention to his
uncle, or done anything to bind himself.’ In this scenario, the same has occurred, and as a
result, no contract had been formed, as silence can not amount to acceptance of an offer.
Therefore, until an acceptance is explicitly communicated, the "contract" will not be legally
binding until an agreement has effectively been communicated between both parties.
Alberts’ offer is ineffective and unenforceable; thus, Zachary never made a contract with him
regardless of the cheque that was sent to the post.
 Later in the week, since Zachary is still unaware of the fact that Paul has accepted
the offer, and he has not heard anything from Albert, he becomes concerned that the set of
thirty desks has yet to be sold. Zachary then begins forming a new contract with his friend
Suzanne, who is also unaware of the fact that these desks cannot legally be sold anymore
as Paul has completed his end of the contract. Suzanne offers to buy the desks at the lower
amount of 400 pounds in cash, and he says, 'this is better than nothing,' which in the context
of the situation suggests that he has accepted this offer, although not explicitly saying so.
Both parties at this point have agreed that on Friday afternoon, Suzanne would bring 400
pounds in cash to the industrial estate in Filton, where she would leave with the thirty
Bridport style desks. At this point, Zachary has entered into a contract with Suzanne.
Zachary is delighted that on the same Friday that Suzanne was contractually obligated to
present the 400 pounds in cash in exchange for the set of 30 desks to receive both Paul and
Albert's cheques from the post. At this point, Zachary has now accepted two contracts that
are enforceable and legally binding. Acceptance is once again clearly defined by Gueter
Trietel as being 'a final and unqualified expression of assent to the terms of an offer' (Trietel,
2015). Zachary proceeds to contact Suzanne to terminate the contract when he tells her that
“the deal is off.” The law states that an offer can be terminated; however, accepted offers, in
other words, contracts, cannot simply be terminated.

Suzanne is Zachary's friend, and their relationship may seem less official than that of
Zachary's and Paul's relationship; regardless, in the eyes of the law, both these contracts are
valid and equally legally binding. Perhaps the determining factor as to whom he is "more"
legally obliged to perform his contractual duties with is whichever party accepted the offer
first. In this scenario, Zachary is in breach of at least one of the contracts, and if this sets
Suzanne or Paul back in terms of what they had planned with the desks, they are legally
entitled to remedies. The remedies will only be viable to the party whose contract has been
breached by Zachary. In this case, the most likely of the two parties to whom Zachary holds
legal liability, who will suffer a breach, is Suzanne. Her offer to buy the thirty desks for 400
pounds came after Paul's cheque, which the post office failed to deliver in a timely manner.

There are definite legal answers to the question of whose contract stands valid and
whose does not in this scenario. Albert never heard an explicit acceptance over the phone
call and still proceeded to send a cheque to no end since the contract was never correctly
formed. Therefore, Zachary never held any legal responsibilities with regard to Albert.
Suzanne and Zachary negotiated in good faith, and Suzanne became the offeror when she
presented her counter offer, which was 400 pounds for the thirty desks. Evidently, as a result
of the strikes with the postal services, Zachary was still unaware that another offer had been
accepted. In reality, he was actually in breach of contract by negotiating with Suzanne and
accepting her offer. On the other hand, when it comes to Paul, he was the first person to
properly accept the deal by sending the cheque via the postal services; as a result, the
contract with Suzanne has been breached. The only contract that was properly concluded
has been the one formed between Zachary and Paul, which is the original offer of 500
pounds for thirty Bridport desks, as per the advertisement in the local newspaper.

Answer for Section A(2)

The first situation presented in this scenario is that of a developer, Brian, who is
currently paying 320 pounds per month over two years to use Charles's 'garden workshop as
a working space whilst working on his latest app.' This scenario involves the doctrine of
consideration, and the question which needs to be determined is whether there has been
sufficient consideration for the promise made by Brian to be legally binding. As the scenario
states, Brian ‘offered in May of 2022 to increase the payment to 500 pounds per month
‘because of the faith you showed in me over the years.’’ It is not stated that Charles has
agreed to this, and more importantly, there is no evidence of an exchange of promises in this
scenario which is a crucial aspect of the doctrine of consideration. This is once again a strict
requirement for the modification of a contract. For a promise such as this one to be legally
binding, and to, in effect, introduce a variation to the original contract, there must be an
exchange of promises; in this scenario Brian, being one party, is offering more money, in
exchange for the same benefits he would have received had he not offered to pay more
money. The case law regarding this type of contractual variation is highly debated and has
brought several academic issues; however, one case stands out and can be considered as
relevant to establish that Brian will not be legally bound to pay the 500 pounds. The case law
relevant to this scenario is the case of Williams v Roffey [1990]. In the case of Williams v
Roffey, a sub-contractor was given a set amount of money to complete the refurbishing of a
number of flats by the responsible contractor. It became apparent that the carpenter would
need more money to complete his end of the contract in a timely manner as per the contract.
As a result, the carpenter requested more money to finish the job. The contractor
responsible for the carpenter agreed; however, he did not pay the carpenter in full, which
caused legal damages to one of the two parties. In the case, the sub-contracted carpenter
was being paid more to complete the original task, but there was a benefit in being paid
more, which was that he would be able to uphold his end of the contract. It is difficult to
establish what exactly Brian will get in return for paying Charles more in the first situation.
The fact that this is a ‘good faith’ gesture shows precisely what this will do to the original
contract, it's the new promise of 500 pounds monthly for the original promise of the workshop
in the garden; it is unlikely that this will be legally binding for Brian. Additionally, the financial
situation in which Brian finds himself due to his successful app is not relevant to the fact that
this contract will remain legally unenforceable.

This is perhaps a tangent to the central focus of the issue at hand but worth
mentioning due to the scenario not explicitly stating that there has been acceptance of this
new amendment on Charles’s part. There is no clear indication that Charles’ has agreed to
this promise, which amounts to acceptance of the new proposition at all. The case of
Felthouse v Bindley [1869] is a solid authority on the issue of communication being the
ultimate form of acceptance of an exchange of promises. The ruling in the case of Felthouse
v Bindley remains to some extent relevant to the situation. In the case, Mr. Bindley owned a
horse which he discussed selling for a set sum of money to his nephew, Felthouse.
However, Felthouse never communicated that he had accepted the offer and that there was
never a distinctly accepted exchange of promises between Mr. Bindley and himself. As
presiding Judge Willes said in his judgment, ‘It is clear, therefore, that the nephew in his own
mind intended his uncle to have the horse at the price which he had name… but he had not
communicated such his intention to his uncle, or done anything to bind himself.’ This is
further evidence in the scenario between Brian and Charles that there is no legally binding
amendment to the original contract formed prior to Brian's success. It would seem that this is
purely a gesture of 'good faith' towards Charles for having supported him in the past;
however, he can choose to withdraw from this and face no repercussions or breach of
contract accusations.

The second scenario presents David as a record shop owner who finds himself in
financial difficulties, which has set him back on tax payments. He owes 10,000 pounds in
‘VAT’ payments, which he could not pay in a timely manner as per the agreement between
himself and the tax collection system in place. As soon as he crossed that deadline, a 6%
per annum interest rate would be added to the initial 10,000 pounds that he owed, which can
be assumed to be the standard ‘contract’ per se. The formal meeting, which took place a
month after he was supposed to have paid the sum he owed to the tax system, was between
himself and a representative of the tax authorities. The tax authority representative, in this
situation, offered David a solution that would allow him to, in essence, avoid repercussions
for failing to make the payment of 10,000 pounds on time. The exchange goes as follows;
David agrees to pay the 10,000 over two years without the ‘6% per annum interest rate’ with
the promise that in the future, David would promptly make his payments 'as required by law.'
The offeror has made the offer, and there has been an exchange of promises between both
parties. David then accepted the offer and began making his payments as he was required
to, to hold up his end of the 'contract.' The case of Re-Selectmove [1995] is nearly identical
to this situation and presents a solution to the issues. In the case, it was argued that the tax
authority who came and offered to have Selectmove pay what it owed in installments was in
no authoritative position to make such an exchange of promises. He could not legally bind
the Inland Revenue system to the agreement when he did. The judges explained that the
case of Williams v Roffey, a case discussed in reference to the prior scenario, was not
relevant in a situation where there was no exchange of goods. In reference to this scenario,
the tax system is receiving what it is supposed to receive by default, and David and his shop
are receiving the advantage of not having to face bankruptcy. In Foakes and Beer [1883], it
was argued that there is a practical benefit of giving this advantage, which is because of the
fact that he can pay the 10,000 pounds in installments, without the 6% per annum interest,
his company will not be liquidated, and he will be able to pay what he owes. This, however,
does not amount to valid consideration, and therefore it does not amount to an enforceable
contract. As Lord Fitzgerald said in the judgment, ‘it seems to have been understood and
taken to be part of our law that the payment of a part of a debt then due and payable cannot
alone be the foundation of a parol satisfaction and discharge of the residue, as it brings no
advantage to the creditor, and there is no consideration moving from the debtor’ (Foakes v
Beer, 1883).

The policy change led David to be contacted by the tax authority to announce to him
that there was a change in the government's policy, and he was now obliged to pay the
amount he owed in full. Since his prior agreement was, in fact, as case law has shown, not
legally binding, he will likely be legally obliged to pay his arrears with the interest as it was
supposed to be paid originally, with immediacy.