Today, we will consider Contract Law, and in particular, question 1 which was posed on the University of London LLB Programme’s 2011 Contract Examination paper.
The Question reads:
On Monday, Angela telephoned Barney in response to an advertisement in the Weekly Chronicle, a local newspaper. Barney’s telephone was answered by Clara, his absent-minded wife. Angela introduced herself and stated, ‘I agree to buy the advertised car at the advertised price. I’ll send a fax confirming this.’ Clara replied, ‘Great – I’ll let Barney know when he gets in.’ When Barney returned home, Clara could no longer remember the details of her earlier conversation and told Barney, ‘Some woman rang about the car and she is willing to buy it.’ On Thursday Barney found the fax and replied immediately by email stating, ‘I agree that the car is yours at the agreed price.’ Unfortunately Angela received only part of this message due to a defect in her email programme. On Wednesday of that week the value of the car had dropped by half because of the introduction of a new model. Angela refused to take the car. Advise Barney.
Contract Formation questions tend to be a staple of any LLB Contract law exam paper. The examiner details various communications which have taken place between 2 (or more) parties, and then the issue invariably turns on the effect of these communications in determining the contractual status between the parties because one party now either seeks to enforce the various communications as a contract; or seek to not abide by the agreement.
The most important thing to bear in mind in contract formation questions, is that YOU should determine the status of each communication. Don’t let the examiner TELL you what it is. So for example, a question might say X placed an advertisement on his windscreen offering his car for sale for £10,000. B was passing by his house and saw this and called A to accept his offer. Well, by any stretch of the imagination, legally, this is not an offer and an acceptance given what you know about adverts. So just because the Examiner uses the work offer in respect of the advertisement and uses the word acceptance in relation to the telephone call, does not mean that’s what it is. YOU have to explain the effect of the advertisement on the windscreen and you make your own submissions and tell the examiner the status of the communication, not simply take the words the question uses as being gospel.
Consider the chronology of the events as they happen as well. So here, although the call is from Angela, we see that it is in response to a newspaper advertisement as we are told:
“…in response to an advertisement in the Weekly Chronicle, a local newspaper”
What you will need to do is to tie down an analysis for that first communication as everything you do will flow from that. Because if you start off saying it’s an ITT, then Angela’s response is an offer. Equally, if you say it’s an offer, Angela’s response will either be an acceptance or counter offer. So that is why examinees’ answer papers will differ. Because one person might say it’s an offer (depending on the discussion of course) and another might say it’s an invitation to treat (again depending on the discussion). Much depends on your discussion and your submission here - - so are you saying it’s an offer or invitation to treat?
Notice how the examiner frames Angela’s response when she calls responding to the ad:
‘I agree to buy the advertised car at the advertised price. I’ll send a fax confirming this.
You would need to discuss the main cases for offer because it appears she thinks she is accepting so you need to discuss what is required for an offer, as she can only accept an offer, and also discuss invitation to treat given that we are told it is a newspaper advertisement. So you would have to briefly focus on the relevant cases; Storer v MCC and Gibson v MCC for offer; and Carlill and Partridge v Crittenden for ITT. You also need to make submissions. This seems to be one of the biggest downfalls of law students…failing to 'nail their colours to the mast' as it were. They discuss, but make no submissions. It is good form to make submissions. So once you have done the discussion, submit that, based on how you have argued, it is an advertisement or ITT. And then move on to discuss the status of the next communication in light of your submission. So if you end up saying the advert is an ITT, then discuss the next issue as the offer that Angela makes and how that offer comes into being, particularly, you would need to focus on the offer being communicated as the message was given to Clara. If you submitted that the ad was an offer, then you would need to discuss the effect of the acceptance by Angela and, again, as the message was given to Clara.
The question says ‘Advise Barney’ so that’s what you do – answer the question and advise Barney. What are you going to advise him about - - look at the end of the question,
Angela refused to take the car
You have to advise Barney about this. The issue is - - Is there a validly formed contract? Because if there is, Angela will be liable to Barney but if there isn’t she is not. I would certainly suggest an introduction that started along the lines of:
In advising Barney as to whether there is a validly formed contract between him and Angela, giving rise to liability on her part, it is necessary to consider the status of each communication between them in determining whether such a liability exists.
I would then continue and consider the chronology of each communication.
Now in the discussion relating to the advertisement of the car in the newspaper, as I’ve already discussed, you would want to draw on the law relating to ITT and offer in discussing this. Now based on Carlill, we know that an ad can amount to an offer, but it must meet the criteria for an offer. The question is deliberately vague and so it is possible to submit it is an offer. But the safer approach based on the facts you have, is to submit it is an ITT. The offer would then be when Angela speaks to Clara and, of course, it must get to Barney. But even if you said the ad was an offer, you would need to mention the case you know about a third party passing on… meaning the case of Dickinson v Dodds and the reliable third party in respect of the message to Clara.
The examiner has also raised the issue of communication by fax. You would need to consider the rules and cases in relation to instantaneous communication, the minute a fax machine or even email is used. So you would need to discuss Entores v Miles Far East; Brinkibon v Stahag Stahl and the Brimnes. If Barney was purporting to accept Angela’s supposed offer, then you would need to explain the issue of the failure of the entirety of the email to get to her and the defect in that communication.
Now that is my suggestion on your approach to answering this question.