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BUS201 Contract and Agency Law
Answered

Answers:
Question 1
Issue

The actual issue in connection to the forwarded situation is in what manner and when the particular contract shall be established amid the winning bidder and Jackson.

Rule

The case, which has been quoted to be Smith v Hughes (1871) LR 6 QB 597, should be deliberated in connection to the forwarded situation. In this exact case, it had been specified that an agreement shall come into existence when an unambiguous and a clear offer has been delivered by the offeror, and such clear offer has been mirrored with an unmistakable and a clear acceptance by the offeree.

The case known to be RTS Flexible Systems Limited v Molkerei Alois Müller GmbH [2010] UKSC 14 would be a relevant case concerning the given situation. In this case, it had been mentioned that the first two elements in relation to an agreement or a contract are the offer and the acceptance. In the absence of the initial two elements in relation to contract (offer and the acceptance of such offer), there would be no contract or agreement.

Offers are generally differentiated from an ‘invitation to treat’. In this regard, the case, which has been quoted as Fisher v Bell [1961] 1 QB 394, can be regarded as a pertinent case. In this pertinent case, it had been said that in case of an ‘invitation to treat’ or invitation of any offer, a party shall not be able to simply accept. The party (interested in the invitation) must forward an offer in respect of the party who forwarded the invitation. After the interested party makes the offer, the party (who forwarded the invitation) may accept or reject the offer. Hence, when certain commodities are displayed by a seller as an invitation, any person may (after selecting the object) make an offer to the seller.

If the seller agrees to the terms of the offeror, then he may agree to sell the specific object (thereby accepting the offer), and if the terms are not agreed by the seller, then he may decline to sell the specific object. In this regard, another pertinent case would be the case, which has been cited as Partridge v Crittenden [1968] 1 WLR 120. In this case, it had been specified that an advertisement shall not be considered to be an offer, instead, it shall be considered to be an ‘invitation to treat’ (except in exceptional circumstances such as in the case of Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1, where, due to any special condition, and advertisement would be regarded as an offer).

In Partridge v Crittenden, it has also been specified that an invitation to several individuals to forward bids at a specific auction shall not be considered to be an offer, instead, it shall be considered to be an ‘invitation to treat’. In the case of Barry v Davies [2000] EWCA Civ 235, it was detailed that any auctioneer who actually publicizes a particular auction in the absence of any ‘reserve’ price, shall be under an obligation to accept the uppermost or highest bid.

In the case Currie v Misa [1875] LR 10 Ex 153, it had been stated that without the element of consideration, a particular contract cannot be enforced. In order to enforce a particular contract, the element of consideration (in any form) should be present. In Crabb v Arun District Council [1975] EWCA Civ 7, it was stated that the involved parties in a given contract must have the proper intention to establish legal relationships and be bound by such relationships.

Application

In the forwarded situation, Jackson decided to sell his vase through auction, and therefore, invited individuals through an advertisement. He also invited his friends to partake in the auction.

The case, which has been quoted to be Smith v Hughes (1871) LR 6 QB 597, should be applied in connection to the forwarded situation. Applying this exact case, it may be specified that an agreement shall come into existence amid Jackson and the winning bidder when an unambiguous and a clear offer has been delivered by the bidder, and such clear offer has been mirrored with an unmistakable and a clear acceptance by Jackson.

The case known to be RTS Flexible Systems Limited v Molkerei Alois Müller GmbH [2010] UKSC 14 would be an applicable case concerning the given situation. Applying this case, it should be mentioned that the first two elements in relation to an agreement or a contract are the offer and the acceptance. In the absence of the above said initial two elements in relation to contract, there would be no contract amid the winning bidder and Jackson.

Offers are generally differentiated from an ‘invitation to treat’. In this regard, the case, which has been quoted as Fisher v Bell [1961] 1 QB 394, can be regarded as an applicable case. Applying this pertinent case, it should be said that in case of an ‘invitation to treat’ or invitation of any offer, a party shall not be able to simply accept. Therefore, the party (interested in the invitation of Jackson) must forward an offer in respect of Jackson. After the interested party makes the offer, Jackson may accept or reject the offer. In this regard, another applicable case would be the case, which has been cited as Partridge v Crittenden [1968] 1 WLR 120. Applying this case, it must be specified that the advertisement publicized by Jackson shall not be considered to be an offer, instead, it shall be considered to be an ‘invitation to treat’ (and no exceptional circumstances exist in Jackson’s case as it existed in the case of Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1).

Applying Partridge v Crittenden, it may also be specified that the invitation by Jackson to several individuals to forward bids at the specific auction shall not be considered to be an offer, instead, it shall be considered to be an ‘invitation to treat’. Making application of the case of Barry v Davies [2000] EWCA Civ 235, it should be said that Jackson who actually publicized the particular auction in the absence of any ‘reserve’ price, shall be under an obligation to accept the uppermost or highest bid.

Making application of the case Currie v Misa [1875] LR 10 Ex 153, it should be stated that without the element of consideration, no particular contract cannot be enforced by Jackson. In case of Jackson, the element of consideration is present, and hence, he shall be able to enforce a particular contract.

Making application of Crabb v Arun District Council [1975] EWCA Civ 7, it may be stated that Jackson and the winning bidder must have the proper intention to establish legal relationships and be bound by such relationships.

Conclusion

To conclude, a particular contract shall be established amid the winning bidder and Jackson, when Jackson accepts the highest bid (offer) by a bidder, along with the presence of consideration and intention of the involved parties.

Question 2
Issue

The actual issue is whether the specific statement “The sofa is one hundred percent covered with genuine leather” should be regarded as a term or as a representation.

Rule

The case of Hadley v Baxendale (1854) 9 Exch 341 can be said to be a pertinent case concerning the given situation. In this case a five-part test had been forwarded in order to differentiate between a representation and a term. It was stated that while determining any statement as a term or as a representation, the court should adhere to the following guiding factors or presumptions: -

  1. Whether the specific statement is in writing.
  2. Whether there is any specialist knowledge or skill from one party.
  3. Whether there is a reliance upon the specific statement, or significance placed upon the specific statement.
  4. How long had been the interval of time amid the declaration of the statement and formation of the specific contract?
  5. Whether the party depending upon the specific statement could have verified the statement.

In the case known to be Henderson v Arthur [1907] 1 KB 10, it had been specified by the court that the preliminary point for any court that determines as to whether any written term would be a misrepresentation or a term, is that such written term shall be considered to be a term.

Another relevant case in this regard would be the case known to be Oscar Whell Ltd v Williams [1957] 1 WLR 370. In this case, it had been said that if the person making the specific statement possess certain kind of specialist knowledge or skill regarding the subject matter, or mentions having such knowledge, then, the assumption is that such statement would be a term.

The case of Bannerman v White (1861) 10 CB NS 844 can be regarded to be a relatable case in association to the given instance. in this case, it was said that if the person depending upon the specific statement, makes it absolutely clear that the specific statement carried such significance that in the absence of such guarantee, he would not have established the contract, then, the assumption is that such statement shall be regarded as a term.

In the case of Heilbut, Symons and Co. v Buckleton [1913] AC 30, it had been said that concerning the lapse or interval of time, if any party makes a specific statement, and quickly afterwards, a written contract is given effect to without including the specific statement in the written contract, then, such statement shall not be regarded as a term, instead should be regarded as a representation.

In the case of in Schawel v Reade [1913] 2 IR 81, it was said that if the maker of a statement accepts responsibility in relation to the truth of the statement, then, the statement shall be regarded as a term. However, if he says the other involved party to confirm the statement, then, the statement shall be regarded as a representation, and not as a term.

Application

Applying Hadley v Baxendale (1854) 9 Exch 341, it can be stated that while determining any statement as a term or as a representation, one should adhere to the following guiding factors or presumptions: -

  1. Whether the specific statement is in writing.
  2. Whether there is any specialist knowledge or skill from one party.
  3. Whether there is a reliance upon the specific statement, or significance placed upon the specific statement.
  4. How long had been the interval of time amid the declaration of the statement and formation of the specific contract?
  5. Whether the party depending upon the specific statement could have verified the statement.

Applying Henderson v Arthur [1907] 1 KB 10, it can be specified that if any term is written, then, it shall be considered to be a term.

Applying Oscar Whell Ltd v Williams [1957] 1 WLR 370, it must be said that Steve possess certain kind of specialist knowledge or skill regarding the subject matter, and hence, the statement made by Steve would be regarded as a term.

Applying Bannerman v White (1861) 10 CB NS 844, it should be said that Terence made it absolutely clear that the specific statement made by Steve, carried such significance that in the absence of such guarantee, he would not have established the contract, and hence, the statement made by Steve shall be regarded as a term.

Applying Heilbut, Symons and Co. v Buckleton [1913] AC 30, it must be said that concerning the lapse or interval of time, Steve made a specific statement, and quickly afterwards, a written contract is given effect to including the specific statement in the written contract, and hence, the statement made by Steve shall regarded as a term, and should not be regarded as a representation.

Applying the case, which has been said to be Schawel v Reade [1913] 2 IR 81, it can be said that if Steve accepts responsibility in relation to the truth of the statement, then, the statement shall be regarded as a term. However, if Steve says the other involved party to confirm the statement, then, the statement shall be regarded as a representation, and not as a term.

Conclusion

To conclude, the specific statement “The sofa is one hundred percent covered with genuine leather” should be regarded as a term and not as a representation

Question 3
Issue

The main issue in connection to the forwarded situation is whether Yolanda would be successful in claiming damages against Melvin.

Rule

The case cited to be Sumpter v Hedges [1898] 1 QB 67 should be deliberated in connection to the forwarded situation. In this particular case, it had been said that every involved party in relation to a given contract should perform the obligations and duties in a precise manner. If such performance is not done in a precise manner, then, the party who fails to perform the obligation in a precise manner, shall be considered to have caused a violation of the given contract, and, the aggrieved would be able to claim damages.

The case, which has been quoted as The Achilleas or Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48, is a pertinent case in this regard. In this case, it was mentioned that in case of a breach of a given contract by a specific party, the aggrieved party shall be able to claim consequential damages for the foreseeable loss suffered.

The case, which has been known to be Ruxley Electronics and Construction Ltd v Forsyth [1995] UKHL 8, can be regarded as relevant case concerning the forwarded situation. In this case, it had been said that in the case where the performance has been defective, money may be awarded by the courts in order to remedy the defect. However, where such sum would not be proportionate to the losses suffered, then, an additional amount may also be awarded by the courts, which is known as compensatory damages.

Application

Applying the case, which has been cited to be Sumpter v Hedges [1898] 1 QB 67, it should be said that Melvin failed to perform the obligations and duties in a precise manner, and hence, Melvin shall be considered to have caused a violation of the given contract, and therefore, Yolanda would be able to claim damages.

Applying the case, which has been quoted to be The Achilleas or Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48, it can be mentioned that in case of the breach of the given contract by Melvin, Yolanda shall be able to claim consequential damages for the foreseeable loss suffered.

The case, which has been known to be Ruxley Electronics and Construction Ltd v Forsyth [1995] UKHL 8, can be applied as relevant case concerning the forwarded situation. Applying this case, it may be said that the performance of the contract by Melvin has been defective, and therefore, money may be awarded by the courts in respect of Yolanda, in order to remedy the defect. However, considering the loss relating to the walk-in customers of Yolanda, such sum would not be proportionate to the losses suffered by her, and hence, an additional amount may also be awarded by the courts in respect of Yolanda, which is known as compensatory damages.

Yolanda shall be able to claim the above said two damages for losses suffered by her, and not any other incidental damages or other damages.

Conclusion

To conclude, whether Yolanda would be successful in claiming damages against Melvin.

Question 4
Issue

The issues is whether Vanessa has violated her responsibilities as an agent to Sonia.

Rule

The responsibilities of an agent are: -

  • To perform actions in the best interest of principal
  • To have no conflict of any interest
  • To maker no secret profit
  • To have a responsibility of confidentiality
  • To utilize proper skill and care
  • To be accountable to principal
  • To be obedient to the principal
  •  
Application

The responsibilities of Vanessa as an agent include the following: -

  • To perform actions in the best interest of principal
  • To have no conflict of any interest
  • To make no secret profit
  • To have a responsibility of confidentiality
  • To utilize proper skill and care
  • To be accountable to principal
  • To be obedient to the principal

However, she failed to perform the above said obligations in a proper manner.

Conclusion

To conclude, it can be said that Vanessa has violated her responsibilities as an agent to Sonia. 

References

Bannerman v White (1861) 10 CB NS 844.

Barry v Davies [2000] EWCA Civ 235.

Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.

Crabb v Arun District Council [1975] EWCA Civ 7.

 Currie v Misa [1875] LR 10 Ex 153.

Fisher v Bell [1961] 1 QB 394.

Hadley v Baxendale (1854) 9 Exch 341.

Heilbut, Symons and Co. v Buckleton [1913] AC 30.

Henderson v Arthur [1907] 1 KB 10.

Oscar Whell Ltd v Williams [1957] 1 WLR 370.

Partridge v Crittenden [1968] 1 WLR 120.

 RTS Flexible Systems Limited v Molkerei Alois Müller GmbH [2010] UKSC 14.

Ruxley Electronics and Construction Ltd v Forsyth [1995] UKHL 8.

Schawel v Reade [1913] 2 IR 81.

Smith v Hughes (1871) LR 6 QB 597.

Sumpter v Hedges [1898] 1 QB 67.

The Achilleas or Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48.

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