English Contract Law case study - Please Help?

Question

Salvage is a dealer in reclaimed building materials. He learned from the 'Planning notices' in the local paper that Bill Derr proposes to renovate an historian barn in the locality, using reclaimed facing bricks traditionally used in the vicinity. salvage has several thousand suitable 2nd hand bricks of the type required in his yard. salvage sent a fax to Bill Derr, which read "I can offer several thousand 2nd hand facing bricks suitable for your needs at £400 per thousand." Bill Derr faxed in reply "I will take four thousand. Need delivery in 1 load by monday nxt week."
Salvage then wrote: "thank you for ur fax, which is recieving our attention"

Advise Bill Derr as to the legal position on each of the following alternative assumptions:
1) Salvage packed the bricks and loaded them on a lorry for delivery to Bill, but b4 the van set out Bill phoned to say he no longer needed the bricks.
2) Salvage failed to deliver any bricks to Bill

Answer 1

The first fax (which, depending on local law, might be an unlawful spam-fax) was indeed an offer, but there is a catch: the quantity is not specified, neither is the timeframe. It is not an unconditional offer.

The second fax added two contract terms and so -- if the quantity and delivery terms were other than "normal" in the industry and under the circumstances -- was a counter-offer: 4,000 and "one load by Monday:.

Question: what is "several"? And what warranty is there that the goods are, in fact, "suitable for [his] needs"? What building is going to buy bricks sight unseen and take the chance they will meet the standards of English Heritage and the planning board?

The third fax makes it clear there is no meeting of the minds, at least not yet. Some may argue otherwise, that "receiving our attention" means acceptance. I do not agree.

In real life, neither party has any recourse. This sort of stuff is common in the buildings trades. And neither party deserves particular consideration since both were ambiguous. Bill Derr should have assumed that the spam-fax might have been broadcast widely and that any purported acceptance was, itself, subject to prior sale.

And, hey, building materials can be returned -- that's standard in the industry -- albeit with a handling charge of, say, 10%.

IMHO. But whichever side you're on you're sure to find a solicitor to take your case.

Answer 2

You need to consider whether there has been an offer, acceptance and consideration to form a contract. I would say from Salvage's point of view that the point at which Derr faxed S saying he will take 4000 was the point at which the contract was made. S has made the offer which D has accepted.

However, D will state in return that in order for there to be a valid contract, there needs to be consideration. D has not given any money or deposit for the delivery and therefore he would argue that the contract is incomplete until the bricks are actually delivered and he accepts them and/or he gives S money for them. Also D might argue that the fax from S was a bit ambiguous - what does 'receiving our attention' mean? It could mean that they are in agreement with D to deliver or it could mean that they are just considering whether the have enough stock or can deliver at the relevant time. D could then argue that there is no contract as far as he is concerned as he will think that he has made the offer and there doesn't seem to be acceptance from S at all. (see Fisher v Bell and ??? v Royal Pharmaceutical Society).

Hope this helps.

NB I disagree with a later YA-er who said that Fisher and Bell and the Pharmaceutical case I mentioned above are irrelevant. These cases are indicative of when goods are an invitation to treat or when they are considered an offer. It is irrelevant whether they are goods on display in a shop or whether they are offered for sale by fax as in this case. The point is whether goods for sale are an invitation to treat or an offer as this determines when acceptance takes place and therefore when the contract is formed.

Answer 3

I suggest you use IDEA

Identify the area of law

Define the law

Explain the law

Apply the law.

Good format for essays.

Right then,

Has there been an offer?

Has there been an acceptance? In this context look at Brinkibon Ltd v Stahag Stahl [1983] 2 AC 34

Is there a consideration?

Is there an intention to create legal relations?

Is there certainty of subject matter?

Is the initial communication an offer or an invitation to treat? Carlill v Carbolic Smoke Ball Company.

I cannot see a definate intention to create legal relations, I feel the last fax from Salvage is the giveaway here. There is room for uncertainty in the wording. Scammel and Nephew Ltd v Ouston [1941] AC 251. Is the agreement too vague?

Have a look at Gibson v Manchester City Council [1978] 1 WLR 520 (CA) and 1 WLR 294 (HL).

This gets you started.

Good luck

Answer 4

My view is you need to confirm if a Contract actually exists beteen the Parties. The key is to establish whether their is a genuine Ofier of Sale or whether their is just an Invitation To Treat.

This is the basis of Contract Law. The fact that Faxes have been sent between the Parties would suggest that there is a Contract, but we would need to have more information for example are the faxes on Headed Paper, with Business/Owner's name on it with Telephone & Fax Numbers.

This would suggest that there is a Contract if this can be established.

I refer to the "Neighbour" Principle as stated in Donaghue V Stevenson as the starting point for Contract Case Law, for the Questioner to start their research.

If the faxes do have the Business entities then No 1 would be a Breach of Contract but the amount of compensation would be limited as the Bricks can be used for alternative purposes i.e. Somebody else can buy it.

If the faxes are on Plain Paper then it may be hard to establish that a Contract exist.

In No2 the same will apply.

Answer 5

First fax was invitation to treat. 2nd fax was acceptance. At this point you have a contract. Salvage has a contract to deliver the quantity of bricks, at price stated. Bill has a contract to pay upon delivery.

Scenario 1 - Salvage can still claim the money, or can recover losses incured from bill. I.E. They can enforce contract.

Scenario 2 - Salvage can be sued for breach of contract.

Answer 6

This is contract Law and very basic stuff, look at whether there has been an offer and an acceptance in the transaction look at the cases of Fisher v Bell, Carlill v Carbolic Smoke Ball Co , Harvey v Facey, Gibson v MCC and see whether this has been rejected Dickinson v Dodds. Then look at all other aspects of contract; Consideration, Intention to Create Legal Relations, etc, Lampleigh v Braithwait. Then discuss things like breach Avery v Bowden.

Answer 7

You need to establish if a Contract exists between the two parties, was there an agreement to purchase? Salvage didnt confirm the sale. If the sale was confirmed then the maximum liability is the cost of packing and loading and unloading.

Answer 8

Fisher v Bell and Pharmaceutical Society of GB v Boots Cash Chemists both deal with the display of goods. They are totally irrelevant to this case.