Department of Accounting & Finance LAW 1091 Business and Company Law / LAW 1092 Business Law

Coursework
For many years Cheryl operated a school minibus service in Peckham. In September 2009 Cheryl decided
to retire. Accordingly, she placed the following advertisement in the local newspaper:
‘FOR SALE: 2 BLACK FORD TRANSIT MINIBUSES £15,000’
Britney saw the advertisement and decided to visit Cheryl. During Britney’s visit, Cheryl stated that the
minibuses were manufactured in 2005’. After their meeting, Britney told Cheryl she would let her know
during the following week whether or not she would purchase the minibuses.
The next day Cheryl offered to sell the minibuses to Amy, a friend of hers, via an e-mail for a reduced
price of £12,000. Amy agrees to purchase the minibuses but in her reply (via e-mail) ‘only if they are re-
sprayed white’.
The following week Britney accepted the purchase price of the black minibuses for £15,000 by speaking
to Cheryl directly.
In the meantime, Mohammed has seen the advert for the minibuses and posted his acceptance to buy
them for £15,000 to Cheryl.
All three parties believe that they have a contract with Cheryl for the sale of the minibuses.
Advise Cheryl whether or not she has a contract with any of those three parties.
Learning outcomes
 To develop an understanding of the relevant contractual legal issues
 To develop skills of legal analysis
 To develop legal research skills
 To develop skills in ascertaining the relevant legal issues and applying them to a legal problem
 To develop written communication and presentation skills and in particular the ability to write and
argue clearly, rationally and succinctly.

At the end of the coursework you should be able to:

 Show a good understanding of the relevant legal issues in contract law
 Show knowledge of the different aspects which make up a contract
 Demonstrate an ability to assess which case law is relevant to the problem.

 Demonstrate good written skills.

Deadline Fri 18 December 2009

Format Word processed.
Word Limit 1500 words. Please indicate the number of words you have used.
Late submission, plagiarism and non-independent work will be awarded 0%.

[Overall: only a few concepts explained and applied. Too often the work is
inaccurate and irrelevant] 35%
The changing of society will result in developing of legal system. It is
always changed and evolved into new and better. There are many different
legal subjects in the legal systems. Such as Tort law, criminal law,
international law, contract law, company law and so on. All the law must be
fair, appropriate and strict, even though the legal system has different
categories in different countries. In the UK, the law is separated into public
law and private law. Public law governs the relationship between citizens
and the State, and private law is primarily concerned with disputes between
private bodies. (Taylor et al, 2007). Public law consists of criminal law,
constitutional law and administrative law. Private law includes contract law,
law of torts, land/property law and equity. [all of this paragraph is irrelevant]
Contract law is an intermediate law in business trading, which is defined as
an agreement between two or more parties that is intended to be legally
binding. A valued contract should be included the following essentials, an
offer, an acceptance, consideration, intention to be legally bound, capacity,
genuineness of consent and

legality. [this is better – as more relevant to the question]

There is case which is about Cheryl operated a school minibus service for
many years and she decided to retire in September 2009. Therefore, she
placed an advertisement which is ‘for sale: 2 black Ford transit minibuses
￡15000’ in the local newspaper. In the legal system, according to
Partridge V Crittenden (1968), advertisements of goods for sale are
normally regarded as an invitation to treat, but sometimes advertisements
can also be considered offers in some specific cases. The difference
between an offer and invitation to treat is an offer is a proposal or promise
by one party (the offeror) to enter into a contract, with the intention of being
bound as soon as the party to whom the promise is made (the offeree)
signifies his acceptance. (Koffman et al, 2007). [correct statement of law]
Invitation to treat is an action of inviting offers and the offeror is free to
accept or reject [the last part of this statement is incorrect - cannot accept
an invitation to treat]. For instance, auctions, display of goods,
advertisement and tenders are all belong to invitation to treat. The reason
why advertisement is regarded as an invitation to treat is that further
bargaining between the parties is still possible or even necessary.[ie,
inviting an offer] (Koffman et al, 2007) The seller and the buyer can
communicate

with each other and it is not a legal agreement.

In this case, there are three parties believe they have a contract with Cheryl
for the sale of the minibuses. The first party is Britney who is the first
person to saw the advertisement and then visited Cheryl. After the meeting,
she did not decide to purchase the minibuses at that moment and she
would let Cheryl know if she would buy or not in the following week. At that
time, Britney did not have contract with Cheryl, because this is only an
advertisement and Cheryl just invited people to buy, it is not a binding
[delete this word, binding] offer. [good analysis] Therefore, Britney can
decide if she would like to buy or not and it is not compulsory to accept the
offer. [she must make an offer]
The second person is Amy who is a friend of Cheryl. Cheryl offered to sell
the minibuses to Amy after the day of meeting with Britney. She reduced
price of ￡12000 to her by e-mail. Amy agrees to purchase the minibuses,
but she has a condition of re-spraying the minibuses to white which is sent
by e-mail. In my opinion, Amy has contract with Cheryl in this case. This is
because Cheryl sent an e-mail to Amy and she received a reply from Amy.
In this e-mail, it is an implied term [no – nonsense – no implied terms in the
question]

that Amy agreed to purchase the minibuses if Cheryl re-sprayed the

minibuses to white. [no – where’s the acceptance?] As well as this e-mail is
included the consideration of ￡12000. Because of the condition of re-
spraying, the original offer becomes a counter offer. A counter offer is
treated as a new offer and instead of the original offer. (Mckendrick, 2007)
[yes, so not an acceptance if a counter offer]. There is a general rule is that
an acceptance must be communicated to the offeror (Entores v Miles Far
East Corp. 1955), otherwise the contract is not existent. [good use of
cases] In this case, Amy has communicated to Cheryl by email, assume
that if Cheryl agrees Amy’s condition which is re-spraying the minibuses to
white, then the contract is valid. Therefore, this will be a legally binding
offer. If Amy breached the contract and she will not buy the minibuses,
Cheryl could sue her. A value [what’s this word? – ‘valid’?] contract should
be included offer, acceptance, consideration and communication [you
mean ‘intention’], in this case, the four aspects all are included. Then the
contract is formed at the time. [Are you sure?]
The following week, Britney accepted the purchases price of the black
minibuses for ￡15000 by speaking to Cheryl. [if offer and acceptance]. In
despite of Britney agreed to buy the minibuses, she

does not have contract with Cheryl. This is because consideration is

important in a contract. [Doesn’t make sense]. Assume that if Cheryl
promised Britney to hold the minibuses for one week, but she has already
sold the minibuses to Amy during that week. Britney would not be able to
sue Cheryl because Britney has not provided consideration in exchange for
her promise to keep the minibuses for a week. Therefore Cheryl has no
obligation to hold the minibuses and wait for Britney’s reply. If Britney had
paid earnest money to Cheryl, she will have responsibility to hold the
minibuses for her. (Rush et al, 2006). [this is earlier] There is no
consideration between Cheryl and Britney and this is not a valued offer,
therefore Britney has no contract with Cheryl. [Depends]
In the meantime, Mohammed has seen the advertisement and posted his
acceptance to buy the minibuses for ￡15000 to Cheryl. In the legal
system, there is a general rule of acceptance only can be received by
telephone, telex, email and fax, but except by postal. According to Adams
v. Lindsell (1818), an acceptance must be brought to the offeror’s attention
for it to be effective. The reason why postal rule is not a valid acceptance is
that firstly, the address of offeror is written wrong and might be delivered to
the wrong place. Secondly, the letter might be delayed or lost to delivery to
the

offeror and missed the deadline of the acceptance. (Koffman et al, 2007).
Thus, it is not a good way to accept the offer by using post. In this case,
Mohammed posted his acceptance to Cheryl; it might be spent long time to
delivery. Assume that due to the delayed post, Cheryl has already sold the
minibuses to Britney or Amy during that time, and it is unfair to Mohammed
to compete with other parties. Acceptance by post is an unsuitable way to
accept the offer. Therefore, Mohammed has no contract with Cheryl. [all of
this paragraph is completely WRONG – you cannot accept an advert
(invitation to treat)]
In conclusion, from analyzed the above case, we can see obviously
advertisement as an invitation to treat is different from the offer. Invitation to
treat is not a binding offer and everyone has the chance to see and buy the
goods. In the above case, there only Amy has contract with Cheryl [are you
sure? – I thought there was a counter offer] and other two parties Britney
and Mohammed have no contract with Cheryl. From the three parties’
situation, it is important to understand how to make contract with the
offeror. Firstly, in the contract it is important to have consideration to
promise the offeror in order to keep the goods for the offeree. Secondly,
communication between offeror and offeree is important

as well. The offeree must communicate to the offeror in order to make a

binding agreement. Thirdly, the offeree must choose the suitable way to
accept the offer; otherwise the contract is not valid. Therefore, the offeror
and the offeree must muke sure all the essential aspects should be
included in order to make a binding contract. [good summary but does not
make sense in light of the facts of the question]
Word count: 1355
References:
Taylor, R. and Taylor, D. (2007) Contract law Directions, published by
Oxford University Press.
Koffman, L. and Macdonald, E. (2007), The Law of Contract, Sixth Edition,
published by Oxford University Press.
Rush, J. and Ottley, M. (2006), Business Law, published by Thomson
Learning

Mckendrick E (2007), Contract law, Seventh edition, published by Palgrave

Macmillan