Question 5
Phoebe has gone to the local mobile phone store to purchase a new phone plan. She has no real intention of getting a new phone - the recent COVID-19 events have left her with no spare cash. She can afford a $40 a month plan at the moment on his budget.
As she enters the store, she sees a display with the well-known Bannana brand of phones, offering their latest brand the “ePhone” on display for $10 a month with a $30 plan. Phoebe is over the moon - finally she has caught a break as she can afford this plan (which has all the features she wants) and the new phone.
Phoebe goes up to the sales assistant and states clearly. “I accept the offer of a $10 ePhone on the $30 plan” pointing to the phone on display. The sales assistant looks up and says, “Sure, no problem. I’m very happy to help - that’s a great deal you’ve made.”
The assistant goes out the back of the shop to get the phone and come back looking nervous. “I’m sorry,” she says. “I can’t sell the phone at that price - it was a misprint and should be $100 a month not $10.”
“It’s too late - we have a contract,” states Phoebe sternly.
After the sales assistant continues to argue, Phoebe storms out saying that the store “Will be hearing form my lawyers.”
The Manager of the store has asked you to write a Memo (using the ILAC format) asking if Phoebe is correct - is there a contract? Use only the principles form Contract Law in your answer (i.e. do NOT use any Consumer Law) and use all three principles of a simple apparent contract in your answer.
MEMORANDUM OF ADVICE
Memo To : Store Manager, XYZ Mobile Store
Memo From : ABC
Date : 28 October ,2020
Subject : Request for advice on status of the contract
Further to your request for the analysis of contractual situation between your mobile store and consumer Mr, Phoebe , I have prepared the following document,
I - Background :-
Your mobile store has displayed a well-known banana brand of phone at a price of $ 10 a month with a $ 30 plan which was a misprint to the original price of $ 100 a month. The customer entered into the shop believing the the printed price as to be the original price and is believing that you have not fulfilled your obligation of selling the phone at $ 10 as he has accepted the offer of buying the plan and the phone at a price of dollar 10.
II - Analysis:-
There are three constituents of a valid agreement. Firstly there must be an offer from the selling party and acceptance of an offer from the buying party. Secondly the contract must be lawfully binding. Thirdly, there must be a valid consideration for a contract.
If we look at the above case, displaying a good on the show window is a mere invitation to contract and not a legally binding contract. Thus the above agreement cannot be considered as an oral agreement because an essential constituent of a valid agreement is an offer which is not present in the above case. Displaying of goods is an invitation to offer and not a binding offer.
III - Conclusion:-
Thus according to the provisions of law ,the seller has only made an invitation to make an offer and form a contract. Mere display of goods on show window is not a legally binding contract and thus is not enforceable in the eyes of law.
Question 5 Phoebe has gone to the local mobile phone store to purchase a new phone...
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