On completing your HND, you are hired as a Trainee Manager by Excelsior PLC, an international hotel chain. The job offers business experience, management development and future opportunities.
1. Initial Evaluation
Your first appointment is as Assistant Manager at the Excelsior Hotel in Harlow. In the course of the first few months, your Senior Manager asks you the following questions, which, unknown to you, are intended to check up on your capabilities:
1.1 One morning the Senior Manager mentions that he has been reading a book on Business Law, in which he found this sentence; “Not all agreements are legally binding. The courts will only enforce agreements that have certain key ‘ingredients’.”
Recalling that you claim to have covered this topic on your course, from this starting point he asks you to write him a briefing note to explain the importance of the ‘essential elements’ required for the formation of a valid contract.
1.2 Another day he invites you to think about three different ways to make agreements with hotel customers; (a) agreeing verbally to stay in a room; (b) signing printed terms at reception; and (c) clicking on the hotel website and buying online.
He then asks you to discuss the impact of these three methods in terms of forming binding and enforceable contracts under English law.
(This section provides evidence opportunities for Learning Outcome 1, Assessment Criteria 1.1 and 1.2)
(also for Merit and Distinction grade descriptors M1, M3 and D2)
(Assessment Criterion 1.3 is addressed by way of section 2.3 below)
2. Initial Business Situations
Having handled the earlier questions satisfactorily, during the next six months you are asked to deal with the following situations:
2.1 The Ariston Hotel, a member of the UK chain, is in a dispute with Basil Fawlty Electricals over 100 television sets. Andrew, the Manager there, had attended a trade fair at which Basil was offering the TVs for £500 each. Next morning he e-mailed Basil, saying that if he had 100 units in stock he was willing to pay £400 each for them, delivery within 7 days. Basil replied by e-mail the same day, writing that he had a hundred sets left, but only at the original offer price. Andrew telephoned Basil to see if he could negotiate, but the landline number was not answered. He decided to act immediately to secure the order, sending an e-mail to this effect at 4.00pm and posting a correctly made out authorised cheque for £50,000 at 5.00pm. However, in the meantime Basil had a lead from another possible buyer and, thinking he could get an even higher price, sent Andrew a final e-mail at 6.00pm telling him the deal was off. As the TV sets are a special limited edition, it is now very difficult to find the same model anywhere else at the same price. Andrew is worried.
Apply your understanding of the essential elements of a valid contract to advise Andrew if a contract has been formed in this situation.
2.2 A guest staying at the Cheltenham Champions Hotel has had a valuable fur coat stolen from her room. The room is furnished with a large built-in wardrobe that contains a little safe, next to which is fixed a very small printed sign, which says; “The hotel accepts no liability for theft of guest property under any circumstances.” The guest swears she did not see the sign until after the theft. Further, she insists that when she booked in at the reception desk, there were no other signs visible and no member of staff pointed to any document or said anything that would have warned her. She demands compensation.
Apply the law on contract terms to this guest’s dealings with the hotel to advise the Cheltenham hotel on this claim
2.3 The Downton Priory has installed a bespoke new computer system developed by British Information Technologies PLC under a software supply contract. However, the system is found to cause many difficulties: Employees are complaining that they are having to double-check everything, sometimes end up wasting their time re-entering data, and even that they cannot be certain of billing the correct amounts. However, when challenged, the supplier points out a term in the contract that; “Maximum liability shall in any event not exceed £10,000.”
Advise the Downton hotel on this claim, at least to the extent that you;
• evaluate the effect of the contract term quoted above in the software supply contract (by way of example only, by comparing a contract including this term with another one without it, and assessing the difference it makes; or by comparing this term under 2.3 here with the term in 2.2 last above, and assessing their difference in scope); and
• analyse the contract term with reference to its meaning and effect.
(This section provides evidence opportunities for Learning Outcome 2, Assessment Criteria 2.1, 2.2, 2.3
and Learning Outcome 1, Assessment Criterion 1.3)
(also for Merit and Distinction grade descriptors M1, M3 and D1, D2, D3)