Nik Marina Binti Nik Ahmad Kamal

S1687212

Name: Nik Marina Binti Nik Ahmad Kamal

Matriculation number: s1687212
Tutorial group number: 11
Tutor’s name: Laura Bremner
Topic: Formative Assessment
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S1687212

(a) In advising Sarah as to whether there is a validly form agreement between her and Cheryl,
giving rise to liability on Cheryl’s part, it is necessary to consider the status of each
communication between them in determining whether such a liability exists.

The first issue which needs to be decided is whether Cheryl’s advertisement in a local
newspaper was an offer or an invitation to treat. An offer is both a proposal by one party
to enter into a legally binding agreement with another and a statement of terms which the
offeror proposes should govern that agreement. Whilst invitation to treat is not an offer
but merely an announcement that one would like others to come forward and make an
offer which is what Sarah did by making an offer to Cheryl. Based on Carlill v Carbolic
Smoke Ball, an advertisement can amount to an offer, but it must meet the criteria for an
offer. The question is not vague and, so it is not possible to submit that it is an offer but
an invitation to treat. Thus, making Cheryl’s advertisement an invitation to treat.

The second issue is whether Cheryl’s counter-offer through voicemail is acceptable. A

counter-offer seeks to qualify the offer by imposing new conditions. Despite the fact that
it is not expressed as an outright rejection, a counter-offer has the effect of first rejecting
the offer to which it is a response and then making a fresh offer for the party who has
originally the offeror to consider as in Wolf & Wolf v Forfar. Voicemail is considered to
be a delayed communication; a valid method to communicate to offer because the sender
has no control over what happens to it. Therefore, it seems unfair if a delay which is
outside of his control acts to his prejudice. In Dunlop v Higgins, it was held that the
interest of the sender should be preferred: the rule on delayed communication is therefore
the acceptance is effective on dispatch.

The third issue is whether Cheryl’s second counter-offer through voicemail is overruled
by Sarah’s letter of acceptance through postal. Sending a letter through postage is
considered to be a delayed communication of acceptance. Once Sarah has posted her
acceptance, the acceptance takes effect, even if the letter is delayed. This means Cheryl’s
second counter-offer is no longer valid.

In conclusion, there is a validly form agreement between Cheryl and Sarah which means
Sarah has the right to receive the bicycle based on the offer made at £175.

(b) The issue in this case is that Sarah in her contract has created one exclusion clause which
is upheld then leaves no avenue for Sarah to claim; however, under the contract law,
Consumer Rights Act 2015 (CRA) and the Unfair Contract Terms Act 1977 (UCTA), she
may have an avenue to be compensated.

Under contract law, there are only three ways that they can be incorporated which are; by
signature even if they are not read; by notice where there has to be sufficient notice and
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by custom where there have been previous dealings between the parties even if the clause
is added in later. In this case, there is signature, hence Sarah is bound by these conditions.

Another area to consider is whether the gym is liable for the claim that Sarah is asking
for. Under the UCTA Section 16(1) clause A where a term of a contract purports to
exclude or restrict liability breach of duty arising in the course of any business or from the
occupation of any premises used for business purposes of the occupier, that term shall be
void in any case where such exclusion or restriction is in respect of death or personal
injury. Thus, clause 17(a)(iii) is unfair and shall be void. This also relates to Thornton v
Shoe Lane Parking case where one of the terms excluded liability for personal injuries
arising through negligence, Lord Denning said that those clauses need to be drawn to the
other party’s attention and need to be printed in red ink with a red hand pointed to it. The
gym manager did not bring to Sarah’s attention on clause 17(a)(iii) and therefore, it is
very likely that this clause will not be upheld.

In conclusion, it is highly likely that Sarah would not be bound by the exclusion clauses
in respect to the new statutory provisions and under CRA Section 16, it is stated that an
unfair term of a consumer contract is not binding on the consumer. An unfair consumer
notice is not binding on the consumer. A term is unfair if, contrary to the requirement of
good faith, it causes a significant imbalance in the parties’ rights and obligations under
the contract to the detriment of the consumer. Whereas, if there was only reliance on the
common law, she would probably bound against the negligence clause.

(c) In advising Sarah to what damages she could seek from the hotel, it is necessary to
evaluate the content of the contract in determining the damages from the breach of
contract.

Based on the contract that Sarah booked online, the luxury hotel should be newly
decorated, providing Sarah a double room and various activities. However, Sarah did not
get good quality of service that was promised during her stay and the loud building works
has caused Sarah to feel discomfort. Thus, Sarah has the right of using the Consumer
Rights Act Section 56 of Right to price reduction. This section mentions the right of the
consumer to reduce the price by an appropriate amount (including the right to receive a
refund for anything already paid above the reduced amount). With that, Sarah can bring
this to court and the court can exercise the power in Consumer Rights Act section 58
where the court may make an order under this section unconditionally or on such terms
and conditions as to damages, payment of the price and otherwise as it thinks just.

Besides that, Sarah can claim loss of enjoyment. This can be related to Jarvis v Swans
Tours Ltd where Jarvis sued Swans Tours Ltd for breach of contract because the package
tour that Mr Jarvis booked for was not delivered as promised. Lord Denning held that Mr
Jarvis could recover damages for the cost of his holiday but also damages for
disappointment, distress, the upset and frustration caused by the breach.
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Thus for this matter, Sarah is entitled to actions for the payment of damages where Sarah
in effect asks the court to award a sum of money in order to make good the losses
suffered by her as a result of the breach

(d) In advising Nicola on her available options, it is necessary to consider the status of
communication in determining what options exist.

The first issue is the communication between Nicola and Gas to Go Ltd (GTG). Gas to
Go Ltd contacted Nicola regarding their inability to deliver the goods as what was agreed
in the contract made in the upcoming future. This justifies that GTG has gone into an
anticipatory breach of contract with Nicola. Based on Bowdell v Parsons, Lord Campdell
held if a man contracts to sell and deliver specific goods on a future day and before the
day, he sells and delivers them to another, he is immediately liable to an action at the suit
of the persons with whom he first contacted to sell and deliver them. Thus, Nicola is
entitled to take GTG’s statement at face value, accept that the contract is not going to be
performed, declare GTG in material breach of contract, rescind the contract and assume
that GTG’s decision not to perform has caused the innocent party a loss, being a court
action for damages. In Hochster v De La Tour, Lord Campbell held that Hochster did not
meet to wait until the date performance was due to commence the action and awarded
damages.

The second option is Nicola may decide to simply wait for the time for performance to
come around if GTG decides on reflection to go ahead and carry out its obligations under
the contract. If that happens, then there is no breach. However, if GTG fails to perform its
obligation at the appointed time, Nicola is entitled to declare a material breach, rescind
and sue for damages. Nevertheless, using this option may subject to Nicola putting her
business’ opening day at risk.

The second issue is whether Nicola’s communication with the alternative supplier is an
invitation to treat or an offer. An offer is both a proposal by one party to enter into a
legally binding agreement with another and a statement of terms which the offeror
proposes should govern that agreement. Whilst invitation to treat is not an offer but
merely an announcement that one would like others to come forward and make an offer.
By referring to the question, Nicola was asking an enquiry regarding the alternative
supplier’s availability. The alternative supplier did state its availability but neither Nicola
nor the alternative supplier made any agreement. Thus, no contract was made.

In conclusion, Nicola has two options. First is to declare a breach of contract with GTG,
claim for damages and make a new contract with the alternative supplier. The second
option is to wait until the time of performance if GTG decide to deliver its obligations
under contract or not.