Question

Questions SECTION A (Answer one question from this section) 1. Explain the ways in which a contract can be discharged. 2. Provide an analysis of the ways in which terms can be implied into contracts. 3. Oliver sees an advert on the Management Department notice board. It reads: "1-year old motorbike for sale. Incredibly good condition. Low mileage. £2,000 or nearest offer. Contact Elizabeth on number provided below." Oliver contacts Elizabeth and arranges a viewing. When Oliver examines the motorbike, he instantly takes a liking to it. He offers Elizabeth £1600. Elizabeth responds by saying, "I will accept no less than £1900". Oliver then says he is willing to pay £1800. Elizabeth rejects the offer. The very same evening Harry comes to view the motorbike. Harry offers Elizabeth £1800. Elizabeth states that she may be willing to sell for £1900. Harry agrees and hands over the money and Elizabeth takes the money and hands over to Harry the motorbikes documents. One day later Oliver has a change of mind. He approaches Elizbeth and states he is willing to accept the price of £1900. Elizabeth replies by saying that she has now sold the motorbike onto somebody else. Oliver replies by saying "You can't do that! It is not allowed. I am going to sue you!" Answer the following questions: a) What is the legal status of the advert placed by Elizabeth? Explain your answer. b) Explain whether or not you believe a contract between Oliver and Elizabeth has been formed. c) Explain whether or not there is a contract between Harry and Elizabeth.

Answer 1

3. a. The advert placed by Elizabeth is an invitation to offer. It is not an offer, as it is merely a description of the motorbike, with a the tentative offer price. The advert is intended to invite parties to make an offer to form a contract.

b. No contract has been formed between Oliver and Elizabeth.

A contract is an agreement enforceable by law.

An agreement is an accepted offer.

Therefore, for an agreement to be formed, an offer must be made by one party, and the same must be accepted absolutely and unconditionally by the other. In the given situation, Oliver had made an offer, but the same was rejected by Elizabeth. Therefore, no agreement was formed between Oliver and Elizabeth. Without agreement, there cannot be contract.

c. Yes, there is contract between Harry and Elizabeth.

Initially Harry had offered 1,800 for the motorbike. Elizabeth made a counter offer of 1,900. Harry accepted the counter offer, and that is the point at which an agreement was formed. Since both parties are competent to contract and the agreement is supported by consideration, free consent and lawful object, the agreement culminates in a valid and enforceable contract.