Contract AO3

Question 1

What are the positives about offer?

Answer 1

1. It has well established principles which lead to consistency

Question 2

What are the negatives about offer?

Answer 2

1. The difference between an offer and an ITT can be confusing
2. Duration that an offer remains open for can be confusing
3. A counteroffer ends the original offer
4. Revocation of an offer

Question 3

What is the point about the difference between an offer and an ITT?

Answer 3

It can be confusing as in Fisher vs Bell where items showed in a shop window was an ITT due to the traditional view of freedom of contract which we want to move away from nowadays.

Question 4

What is the point about duration of an offer?

Answer 4

It can be confusing how long an offer can remain open and it is impossible to legislate for all scenarios.

‘reasonable length’ seems sensible but it has to be based on each circumstance (Ramsgate Victoria Hotel vs Montefiore)

It is unfair on the offeree that when a length is stated it can be changed if the offeror changes his mind (Routledge vs Grant)

Question 5

What is the point about how a counteroffer ends the original offer?

Answer 5

Problem arises when a party is trying to gain additional information, it was not held as a counter offer in Stevenson vs Mclean however, it was held as a counteroffer when they requested to change the terms in Hyde vs Wrench.

This shows a lack of consistency as the request in Stevenson vs Mclean would’ve also changed the terms.

Question 6

What is the point on Revocation of an offer?

Answer 6

The ruling in Byrne vs Van Tuen Hoven is ineffective but sensible

Also revocation can come from a third party not the offeror which could cause confusion for the offeree who assumes the offer remains open

Question 7

What are the potential reforms for offer?

Answer 7

All invitation to treat should be treated as offers so the law mirrors public belief but this would increase instances of fraud as customers could place their own prices on goods. Also it ties the contract when the consumer places the good in their basket, and putting it back on the shelf would be seen as a breach of contract.

Place the onus on the offeror to inform offeree of revocation which seems reasonable as long as it doesn’t place too great a burden on

Question 8

What are the problems with the postal rule?

Answer 8

A party may be in a contract without knowing it meaning it is unclear when revocation is still possible
The rule is outdated and not in tune with the speed expected of modern business communications

Question 9

What are the problems with acceptance via instant communication?

Answer 9

It is not clear to the offeree when the other party has received or seen the acceptance
The existing case law deals with contracts made via telex and this may not reflect modern communications by various forms of instant messaging.

Question 10

What are the potential reforms for the postal rule and instant communication?

Answer 10

Abolish the postal rule unless it was expressly adopted by the parties
Adopt standardised business hours for communications but not all firms have the same hours so would cause issues
Rules for communication could be codified to give greater clarity for firms

Question 11

What are the points for an acceptance essay?

Answer 11

1. Discuss whether the point of posting, in cases where the postal rule does not apply, will be clear to both parties
2. Discuss the challenges arising with acceptance of unilateral offers not having been communicated to the offeror AND discuss whether the circumstances under which performance will amount to acceptance are sufficiently clear to the parties in when they apply and when the acceptance will be effective.
3. Is the point at which instant communication effective, using the sound business practice rule, clear to the parties

4.Silence cannot amount to acceptance is fair but may not reflect the actual intentions of the parties

5. The fact that acceptance can be by a form rather than the one specified can create confusion and leaves the judge with a lot of discretion

Question 12

What are the reforms for an acceptance essay?

Answer 12

Codify the sound business practice rule to make it clearer to both parties when acceptance is valid through instant communication

Don’t change the issue surrounding acceptance not being communicated to the offeror

Abolish the postal rule as it is obsolete and old or just treat all letters as emails so that acceptance takes place when and where it arrives

Question 13

What are the points about revocation of bilateral offers?

Answer 13

1. The rule saying revocation must be before acceptance is clear and creates certainty around whether a contract wants to be formed
2. However, the rule may be hard to implement if the rules for acceptance are unclear - postal rule
3. Revocation being revoked by a third party allows for justice and prevents fraudulent acceptance but there may be confusion around what constitutes a reliable third party
4. The rule that considerations is required in order to keep an offer open may not be obvious to a non-specialist

Question 14

What are the reforms for the revocation of bilateral offers?

Answer 14

Enforce definite promises to not revoke an offer, regardless of whether consideration has been given. Consideration has been disregarded in privity reforms and so there is no reason why it couldn’t be here

Question 15

What are the points for consideration?

Answer 15

1. Consideration being invented by the courts and how they will always find something of value if they want to enforce the contract
2. Whether the requirement that some consideration need to be given even if it is not adequate is a pragmatic response to the question of enforceability rather than a principled position
3. Whether there is a real difference between cases like White vs Bluett and Hamer vs Sidway, and cases like Stilk vs Myrick and Hartley vs Ponsonby
4. Whether the rules are flexible enough that a judge can easier find an understanding to pay for a task performed in the past

Question 16

What are the potential reforms for consideration?

Answer 16

1. Ensure that every contract has fair value, so not only must consideration be sufficient, but it also must be adequate - would be very difficult to implement unless the state controlled all firms, and it would be too great of an interference in the marketplace. It would lead to the floodgates opening as all prices would have to be the same otherwise people could sue for the difference - Bad reform
2. Abolish past consideration is no consideration but the law is already in a sensible position so no need
3. Get rid of consideration fully but this would cause problems like gifts being legally enforceable

Question 17

What are the points for intention to create legal relations?

Answer 17

1. Whether the domestic presumption provides an essential policy role in limiting trivial domestic cases to save court time
2. Whether the basis of the rules against intention in domestic cases is based on an outdated and sexist view of domestic arrangements
3. Whether the ability to include words to exclude legal intent is a vital protection for companies who are negotiating potential contracts
4. Whether the decision in Kleinwort Benson vs Malaysia Mining creates uncertainty in assessing the effect of a pre-contractual promise

Question 18

What are the specific reforms for intention to create legal relations?

Answer 18

1. Replacing presumptions with a case-by-case factual analysis.
2. Introducing a statutory test for intention, to increase clarity.

Question 19

What are the points for the Contracts (Rights of Third Parties) Act 1999?

Answer 19

1. Old law stopped the floodgates from opening and had no freedom of contract - the act allows freedom of contract, and the fear was that the floodgates were going to be opened but this hasn’t happened which is positive
2. Goes against the notion of consideration as third parties don’t give consideration but get a benefit
3. S.1(2) allows parties to exclude third parties either expressly or generally which prevents the floodgates from opening - positive
4. Many exceptions led to an unstructured and confusing law - act has codified, clarified and structured the law which has made it easier to understand and access
5. International Approach - USA and EU have a more flexible approach to who can enforce a contract, the act aligns English law with other legal systems to help clarity across trade and overseas contracts

Question 20

What are the potential reforms for the Contract (Rights of Third Parties) Act 1999?

Answer 20

1. Doesn’t need any reform as the act has put it in a good place
2. Could abolish privity but that’s not a good idea as the act is spot on
3. Could return to the old law but that’s not good as the act is perfect

Question 21

What are the points for a terms essay?

Answer 21

1. Departs from freedom of contract - It isn’t a judge’s role to interfere then law lacks certainty parliament intervention. CRA15 - consider positives of implied terms
2. Lack of certainty - Conditions and warranties certain but can be inflexible as a minor breach of condition would give a right to repudiate but a major breach of warranty gives no right to repudiate. Innominate terms approach looks at consequence of breach - flexible but uncertain
3. Courts decide what is a condition/warranty even if parties stated - fair it gives protection to the weaker party
4. Although less certain/moving away from freedom of contract - both of which should be central to contract law - the law has moved towards protecting the weaker party, ensuring the law is fair (CRA15)

Question 22

What are the potential reforms for a terms essay?

Answer 22

1. Introduce a statutory definition or clearer legal test to distinguish between terms and representations, reducing reliance on inconsistent case law like Routledge vs McKay
2. Introduce a modern statutory framework for implying terms, to reduce uncertainty and limit the discretion of judges from the business efficacy test and officious bystander test

Question 23

What are the points for an exclusion clauses essay?

Answer 23

1. Where an exclusion clause is reasonable like where the parties are fully aware and of equal bargaining power then it can be allowed - Watford Electronics vs Sanderson
2. The stronger party to a contract can abuse their position and insert clauses to exclude or limit liability even if it is unfair to the consumer due to the older laissez faire approach by the courts, however, now due to Consumer Rights Act 2015 and Unfair Contract Terms Act 1977 these terms cannot be excluded leading to fairer contracts and less abuse of power
3. However, these implied and non-excludable terms could be argued as going against the notion of freedom of contract and therefore makes the law uncertain, however it does align with public opinion as the public don’t want firms to be able to exclude death or personal injury on their premises (S.65)
4. The Contra Proferentem Rule is positive as when there is doubt about the meaning of a term, the words will be construed against the person who inserted them which helps to remove doubt, protects the innocent party and stops a party from deliberately making ambiguous clauses

Question 24

What are the potential reforms for an exclusion clauses essay?

Answer 24

1. Introduce a single, unified statute to govern exclusion clauses in both business and consumer contracts - making the law clearer and more accessible
2. Expand statutory protection to cover small businesses, applying similar fairness tests to those used for consumers.

Question 25

What are the points for a conditions and warranties essay?

Answer 25

1. Lack of certainty - Conditions and warranties certain but can be inflexible as a minor breach of condition would give a right to repudiate but a major breach of warranty gives no right to repudiate. Innominate terms approach looks at consequence of breach - flexible but uncertain 2. Courts decide what is a condition/warranty even if parties stated - fair it gives protection to the weaker party, but it gives judges too much discretion 3. An injured party may genuinely believe that there is a breach of condition (Hong Kong Fir Shipping Co. Ltd vs Kawasaki Kisen Kaisha Ltd) and repudiate the contract but due to the uncertain innominate terms approach then they would be in the wrong and have breached the contract as you cannot repudiate due to a breach of warranty

Question 26

What are the potential reforms for a conditions and warranties essay?

Answer 26

1. Replace the two-tier system with a single flexible test (like the one used for innominate terms) to judge each case based on the seriousness of the breach and its consequences. 2. Codify it - Introduce a statute or code that clearly defines conditions, warranties, and innominate terms, alongside guidance on remedies available for breach.