Group members: Devonique Maxwell and Terrovia Matthews

CONTRACT LAW CASE

Issue:
Whether the contract was valid under the Postal rule or Instantaneous communication
Whether Gabrian would be liable for damages under the Exemption Clause
Whether there was Negligent Misrepresentation by Gabrian regarding the condition of the plies
Whether the condition of the plies lead to the Frustration of the contract

Rule:
The general rule is thatvto establish a valid contract there must be an Offer, Acceptance, Consideration
and Intentions to create legal relations; the offer and acceptance must be clearly communicated.
Where acceptance is by post, acceptance is completed when the letter is posted, even if it is delayed or
lost in the post.
Case on point: Manchester Diocesan Council v Commercial & General Investment - It was held that
although an offeror is entitled to insert an acceptance in a particular way, where a method of acceptance is
merely prescribed, any equally efficient method of acceptance will suffice. If the offeror wants to be
bound only if the offer is accepted in a particular way, he must make this clear.

An exemption clause is a clause inserted in a contract by the stronger party exempting itself from liability
or limiting the extent of any liability arising under the contract.
Case on point: In L’estrange v Graucob, it was held that the fact that the claimant had not properly read
the contract did not impact its validity, as in signing the contract she consented to be bound by its
contents.

A statement is deemed to be negligently misrepresented if the maker has the means to ascertain
knowledge but refuses to do so.

A contract is said to be frustrated when performance of the obligations becomes impossible, illegal, or
useless by reason of extraneous circumstances for which neither party is to blame.
Application:
In this case, Gabrian sent Mark an offer on October 21, 2023, selling him 1000 ply boards at the half price
of $2 million, with the offer remaining open until November 21, 2023.
Gabrian stated an Exemption clause in the offer that he would not be liable if the plies were not of good
quality. Additionally, upon sending a letter to Mark, Gabrian informed him that as soon as he receives it,
he should call to confirm his acceptance. However, Mark’s assistant took the call pretending to be him.
Because Mark has no idea of the call, after receiving the letter on October 30 he immediately sent a letter
of acceptance along with a cheque for $1M, noting that the other $1M would be paid upon delivery.
The postal rule would apply in this case as his letter of acceptance was within the deadline and Gabrian’s
condition of acceptance might not be legally binding as the contract seems to have been accepted through
Mark's letter and partial payment.
Additionally, Gabrian is liable for Negligent Misrepresentation as one of her responsibilities would be
checking the plies to ensure that they are of good quality since she has the knowledge that they are aged,
irrespective of her exemption clause.
Also, according to the rule of frustration, Gabrian cannot claim that the contract was frustrated as she
should have known that there was a possibility of termites infestation in the plies.

Conclusion:
In conclusion, even though Gabrian exempts herself from the termite infestation of the plies, she
negligently misrepresented the condition of the plies and that is what eventually lead to the frustration of
the contract. As such, Gabrian should be liable to pay for damages by returning Mark’s $1 million.