Rules that regulate the existence of a contract

Question 1


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Under the contract law and the statutes regulating the same, the essential rules that regulate the existence of a contract are the offer and acceptance that get to initiate the contract as it is known. Therefore, as stipulated in the management of acceptance of an offer and the precedents set by the judges, Hammer limited has already entered into the contract with Widget &Sons just under them starting to use the metals delivered even if they had not accepted the quotation for the same.


In the Case of Harvey v Facey [1893] AC 552, “Will you sell us Bumper Hall Pen?” Harvey telegraphed to Facey. The Telegraph’s cheapest cash price, Lowest price… £900,” Facey replied. Harvey responded by attempting to “agree” before claiming that they had a deal to buy the ground. Is there a contract?

Facey’s response was merely a call for facts. There are no specifics, conditions, or intent to be obligated to sell, so it isn’t a bid. Simply saying what their lowest price wasn’t enough. Harvey couldn’t agree because there was no bid. After all, there was no deal. It was decided by the court that there was no contract. In this Case, Hammer limited may have agreed without knowing since the rule of thumb is that even silence can be deemed acceptance of an agreement.


Acceptance should be an unequivocal, unconditional, and complete acceptance of the conditions of the bid. Acceptance must be a “simultaneous” copy of the request. In the landmark case of Carlill v Carbolic Smoke Ball Co: The offeree must notify the offeror of their acceptance, and the same should be made clear.

In this Case, there is a thin line between accepting an offer by clear communication, which is unacceptable and accepted by conduct and illustrated in the circumstances. In the Case of Felthouse v Bindley (1862) 142 ER 1037:           

Negotiations between an uncle and his nephew for the sale of a horse. Nephew wrote to uncle saying that he understood that the uncle wished to buy his horse for 30l, but he would not take less than 30 guineas. Uncle replied to the nephew, saying that he would “split the difference” and would pay 30l and 15s: “If I hear no more about him, I consider the horse mine at 30l 15s”. The nephew made no reply. No contract to sell the horse to his uncle. Otherwise, the uncle would be effectively imposing an agreement on the nephew.

This Case deemed that silence would not at any point constitute an acceptance of an offer, and the same should not at any point taken to mean so.

But the scales were tipped in the Case of Brogden v Metropolitan Railway Co. (1877) LR 2 App Case 666: Brogden sold the Railway Company coal for sale (Brogden was their regular coal supplier). • They forwarded the draft contract to the Railway Company, which filed it away and forgot about it. The parties then proceeded to carry out their arrangement (delivering coal), which was interpreted as an invitation and approval. This Case introduced the concept that acceptance of an offer can be communicated when the party is supposed to share the same implies using his conduct and asserts that the offer has been accepted.


Hammer limited was sloppy in their communication with Widgets &Sons as they were in their business of contracting about the sale of metals. Nevertheless, Hammer limited asked for the quotation, and the same was sent by Widgets& Sons on time as per the instructions given by the offeror.

Hammer limited went on to ask for the quotation to e sent to them, which they did not care to look at gain due to their busy schedule, something that can’t be blamed on anything other than themselves and this prompted Widget & Sons to deliver the metal either way.

Upon delivery, Hammer limited went on to use the metal, and this was the same scenario illustrated in Brogden v Metropolitan Railway Co. (1877) LR 2 App Case 666


Hammer limited may claim that the quotation sent to them was above their budget, but that would be long overdue since they have already started using the metal forwarded to them. This conduct was enough to imply that they have accepted the offer from Widget & Sons, and thus they were already in a contract that Hammer limited were obligated to fulfil.




Question 5

  1. Issue:

The issue that arises and needs to be resolved in this Case is the issue of whether Safety limited, who breached the contractual terms due to their mismanagement of funds, are now demanding payment for the work they had done despite the work not being complete ad the same being expressly included in their contract that they should finish the job before Tough Limited pays the work.


The contract’s “express” terms are those that the parties use in the agreement, such as the amount paid for the merchandise. The parties may be in breach of contract if they may not adhere to the terms, and they will be required to pay fines. The contract’s “express” terms are those that the parties use in the agreement, such as the amount paid for the merchandise. The parties may be in breach of contract if they may not adhere to the terms, and they will be required to pay fines.


Safety limited suffered a setback their own mistake. However, the same cannot be shifted to the loss occasioned by Tough limited, who was in a contract with them to pay the same upon completing the 4 phases. Still, Safety limited did not meet the 4 phases hence a breach of contract on their part, and thus they are not to demand payment for the 3 phases of the work which they did, yet the same ought to be fully completed to 4 phases for payment to be effected by Tough limited.


Rigid limited is to refuse to pay Safety limited for work that is not complete since they will be making them get away with breach of contract. Instead, they should sue for breach of contract and Safety limited will have to pay damages as a remedy or even have to fulfil the remedy of specific performance where they will have to complete the remaining work to receive payment.

  1. Issue:

The law of contract stipulates that there can be instances where the contract can be breached due to circumstances that are not in control of either party, which is what is called frustration of the contract. It makes the contract void at the expense of the offeree. The frustration of a contract may occur even in instances where the contract had an express term.


The rule in contract law is that if the contract is frustrated, it is cancelled, and the parties are freed from their commitments. They cannot be charged for breach of contract because they did not perform. The frustration must be due to a circumstance that is not in the offeror’s control, thus affecting their capability to act upon their part of the contract.

National Carriers Ltd v Panalpina Ltd [1981] AC 675: confirming Davis Contractors Ltd v Fareham Urban DC [1936]), per Lord Simon: Frustration of a contract occurs when an event occurs (without either party’s fault and about which the contract makes no adequate provision) that significantly alters the nature (not only the cost or onerousness) of the parties’ special contractual rights and obligations from what they might reasonably have anticipated at the time of the contract’s execution.

The Case set a threshold for frustration to b deemed appropriate; it had to affect a party’s ability to perform their contractual obligation.


When Tough limited got into the contract with Middleton minor, they had not anticipated that it would affect their ability to deliver on their part towards Bedrock Ltd. However, the supply they received from Middleton was an integral part of making the Perspex that they gave to Bedrock. Hence, when their supply from Middleton was affected, it had a trickling effect upon their collection Bedrock.


Tough Ltd will be justified to invoke the defence of frustration of the contract in Case Bedrock sues them, and to their security, they will show that they have tried all they can to avert the situation, but the same was impossible hence having the trickling effect on the supply to Bedrock Ltd.



Question 6


Prima Facie evidence shows that  Ethicscreen is guilty of breach of contract in which they failed to live up to their contractual obligation, which they were obligated to do towards Hooboo limited. Furthermore, they could not report misconducts they had seen in the manufacturing companies, leading to Hooboo losing 30 million Pounds.


A breach of contract occurs when a person fails or refuses to do what is required of him under the contract without lawful reason or when he acts in a faulty or incapacitated manner. From this definition, even failure to perform one contractual obligation amounts to breach of contract, and the party prejudiced by the violation has the option of considering the contract void.

Hoodoo limited is to seek remedies from Ethicscreen for the breach of the contract. The remedies available to them would be the remedy of damages where they would seek to reimburse for the money they lost, and the same can be accompanied with interest.

The remedy of Special damages would seek only to reimburse Hooboo for the loss: Cutter v Powell (1795) 6: Mr. Powell hired Mr. Cutter as a second mate on a ship, and the contract stipulated that if Mr. Cutter “continues and does his service… in the said ship from [Jamaica] to the port of Liverpool,” he will be paid well. Mr. Cutter died on the ship, and his widow was entitled to a part of his earnings. HELD: The contract made it clear that this high amount of compensation was only available until the whole trip was completed.

Hooboo limited may also seek liquidated damages for the breach where they would get the amount that they lost as well as the value of the contract as this was illustrated in the Case of  Cavendish Square Holding v Makdessi and ParkingEye Ltd v Beavis [2015] UKSC 67 where the court stipulated that liquidated damages must be paid by the party that occasioned the breach and this is solely due to the failure in fulfilling their contractual obligation.


Common law awards for breach of contract are meant to compensate the defendant for the harm or harm incurred due to the violation of the contract. They are usually focused on the discrepancy between the impact of success and non-performance on the claimant’s condition, as this was well illustrated in the Case of Morris-Garner v One Step (Support) Ltd [2018] UKSC 20

Hooboo limited are well deserving of the remedy of damages since they have already incurred the losses, and no other treatment would be viable for them since the main thing that they need is to get back the money they lost in paying Ethicscreen to perform their contractual obligation which they failed to do. Also, they suffered loss by losing a deal they were to have with Cuggi and their brand’s reputation that was ruined by the lousy publicity fueled by Ethicscreen’s breach of the contract.


Ethicscreen limited is guilty of breach of contract, and Hooboo limited is justified to seek remedies due to the loss they suffered and their dented reputation that came as a result of Ethicscreen failure to honour their contractual obligation.

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