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contract law help!!
Hey, i'm new here but help with this contract law question would be so so so much appreciated!!! the question is:
On Monday 22nd June, alex wrote to bryony "please sell me your harley davidson motorbike for £10,000". On tuesday bryony replied by leaving a message on alex's answerphone "sure provided you pay cash". The following day bryony posted a letter to alex which said "i have changed my mind, i can no longer sell you the bike". the letter arrived on thursday before alex played back the messages on her answerphone. advise the parties. would it make any difference if a) bryony's letter had never arrived OR b) because of a fault on alex's answerphone, bryony's message had not beed recorded or c) on sunday 1st june bryony had asked alex if she wanted to buy her bike.
i'm mainly confused about the first part... does bryony's letter consititute and invitation to treat and then alex's phone message an offer that includes a new term? in that case what would the subsequent letter count as because the offer hadn't been accepted? sooo confused! thanks in advance for any help!!!
On Monday 22nd June, alex wrote to bryony "please sell me your harley davidson motorbike for £10,000". On tuesday bryony replied by leaving a message on alex's answerphone "sure provided you pay cash". The following day bryony posted a letter to alex which said "i have changed my mind, i can no longer sell you the bike". the letter arrived on thursday before alex played back the messages on her answerphone. advise the parties. would it make any difference if a) bryony's letter had never arrived OR b) because of a fault on alex's answerphone, bryony's message had not beed recorded or c) on sunday 1st june bryony had asked alex if she wanted to buy her bike.
i'm mainly confused about the first part... does bryony's letter consititute and invitation to treat and then alex's phone message an offer that includes a new term? in that case what would the subsequent letter count as because the offer hadn't been accepted? sooo confused! thanks in advance for any help!!!
Laura@leeds
Hey, i'm new here but help with this contract law question would be so so so much appreciated!!! the question is:
On Monday 22nd June, alex wrote to bryony "please sell me your harley davidson motorbike for £10,000". On tuesday bryony replied by leaving a message on alex's answerphone "sure provided you pay cash". The following day bryony posted a letter to alex which said "i have changed my mind, i can no longer sell you the bike". the letter arrived on thursday before alex played back the messages on her answerphone. advise the parties. would it make any difference if a) bryony's letter had never arrived OR b) because of a fault on alex's answerphone, bryony's message had not beed recorded or c) on sunday 1st june bryony had asked alex if she wanted to buy her bike.
i'm mainly confused about the first part... does bryony's letter consititute and invitation to treat and then alex's phone message an offer that includes a new term? in that case what would the subsequent letter count as because the offer hadn't been accepted? sooo confused! thanks in advance for any help!!!
On Monday 22nd June, alex wrote to bryony "please sell me your harley davidson motorbike for £10,000". On tuesday bryony replied by leaving a message on alex's answerphone "sure provided you pay cash". The following day bryony posted a letter to alex which said "i have changed my mind, i can no longer sell you the bike". the letter arrived on thursday before alex played back the messages on her answerphone. advise the parties. would it make any difference if a) bryony's letter had never arrived OR b) because of a fault on alex's answerphone, bryony's message had not beed recorded or c) on sunday 1st june bryony had asked alex if she wanted to buy her bike.
i'm mainly confused about the first part... does bryony's letter consititute and invitation to treat and then alex's phone message an offer that includes a new term? in that case what would the subsequent letter count as because the offer hadn't been accepted? sooo confused! thanks in advance for any help!!!
OK, Let's see if I can help you through the first bit. After that you're on your own!
Alex's letter of Monday 22nd June was an invitation to treat, that is to say it was an indication of a willingness to conduct business.
Byrony's message of the following day was the offer as it was "an expression of willingness to contract on certain terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed" (GH Treitel, Law of Contract 10th edn, p8)
Byrony's letter of retraction was written on the 23rd and received by Alex on the 24th. As the offer had not been accepted I should say that Offord v Davies (1862) and Routledge v Grant (1828) are both applicable and the retraction was valid.
Does that help?
Howard
Reply 2
Howard
OK, Let's see if I can help you through the first bit. After that you're on your own!
Alex's letter of Monday 22nd June was an invitation to treat, that is to say it was an indication of a willingness to conduct business.
Byrony's message of the following day was the offer as it was "an expression of willingness to contract on certain terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed" (GH Treitel, Law of Contract 10th edn, p8)
Byrony's letter of retraction was written on the 23rd and received by Alex on the 24th. As the offer had not been accepted I should say that Offord v Davies (1862) and Routledge v Grant (1828) are both applicable and the retraction was valid.
Does that help?
Howard
Alex's letter of Monday 22nd June was an invitation to treat, that is to say it was an indication of a willingness to conduct business.
Byrony's message of the following day was the offer as it was "an expression of willingness to contract on certain terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed" (GH Treitel, Law of Contract 10th edn, p8)
Byrony's letter of retraction was written on the 23rd and received by Alex on the 24th. As the offer had not been accepted I should say that Offord v Davies (1862) and Routledge v Grant (1828) are both applicable and the retraction was valid.
Does that help?
Howard
spot on!
Laura@leeds
Thankyou Howard! that is exactly what i'd put!!! hehe, big sense of relief knowing at least i got the first bit right!with the second situation (the letter never arriving) i said the revocation wouldnt be recognised and that therefore the offer would be left open for alex to accept, although it must be accepted within a reasonable time. for the 3rd (bryony's message not being recorded) i just said that no offer was made and therefore there were no legal relations. for the 4th big i said alex asking if bryony wanted to buy her harley constituted an invitation to treat to which alex's letter constituted as an offer. but the fact that the message was not heard until after the letter was received could mean that the rejection letter would terminate negotiations. also said that, although acceptance must be communicated, where answering machines (ie unmanned receptors) are concerned it was reasonable to believe the offer would be heard by alex and therefore the acceptance stood, meaning the subsequent letter of rejection could not stand. then pointed out that, even if the acceptance had been communicated it included a new undiscussed term (ie that she must pay cash) and that it may therefore be a counter offer which then meant the letter of rejection stood as the counter offer hadn't been accepted. heh so there's my ramble does that make sense to you or anybody else???!!! thanks again for your help!
You are very welcome Laura.
Yes, I like your answer to point a) If Byrony's letter or revocation had never arrived then the offer would remain open. It would remain so until Alex either i) accepted it, ii) made a counter offer, iii)or rejected it.
In the case of i) the contract would be complete and of course ii) and iii) it wouldn't.
Alex as you rightly say would have only a certain amount of time to accept ("a reasonable time") as a failure to do so could result in revocation through lapse, Ramsgate Victoria Hotel v Montefiore (1866)
Point b) you have answered correctly also. If the answer machine wasn't working then Byrony couldn't have made an offer. What remains is Alex's letter (the invitation to treat) and Byrony's letter (the retraction); both meaningless documents from a contractual standpoint.
Point c) actually makes a whole lot of difference to our little story! What have you decided?
Point c)
If on Sunday 1st of June Byrony had asked Alex if she wanted to buy the bike this would be an invitation to treat. You are correct.
I’d then agree with you in saying that Alex’s letter of 22nd of June would be an offer.
What about the answer message? Was it an acceptance or was it a counter offer?
This is a bit tricky. Laura, you seem to think that by introduction of the “cash proviso” Byrony was bringing in a counter offer. You could be right but I don’t think so. Just by specifying that cash be the means of payment I don’t think deviates enough from the original offer to make it a counter offer.
The price didn’t change and nor did the means of payment as that means was never established initially. It’s not a change of terms of payment as none had been set.
I’d say the answer message was an attempted acceptance, and not a counter offer. If I’m right the next question to ask is was the acceptance valid?
Now, as you know, the precedent for acceptance where letters are concerned was established in Adams v Lindsell (1818); acceptance is complete on posting.
However, the courts have been reluctant to extend this to “almost instantaneous methods of acceptance”, Entores v Miles Far East Corp Bruner v Moore (1955); acceptance must be actually communicated.
I really don’t know what the law says about answerphones as I don’t think we have an case law on it yet but I’d agree with you that
“The traditional rule with acceptance that it must be communicated but this becomes difficult to apply where messages are handled by an un-staffed receptor, such as an answerphone.
acceptance sent in this situation should be considered to have been communicated when it is received by the offeror’s machine only where it is reasonable to expect the offeror to immediately become aware of the receipt In these circumstances it seems reasonable for Bryony to expect Alex to receive the telephone message therefore it may be concluded that acceptance was communicated to Alex”
If you had a case that would be a slam-dunk!
So, the only question left to answer is;
Did the letter of revocation take effect just because Alex read it before she played back her messages. Well, if we’re right above (that acceptance is communicated once received on the answer machine) then I’d say the letter would have no effect.
That being so, we have offer and acceptance! I’d say you’ve done a pretty good job on this.
Should you mention consideration? Absolutely. If point c) leads us to believe we have offer and acceptance then you should definitely go on to comment about consideration.
It may not be very helpful but here's part of an old essay I did on "consideration" way back. It’s actually got more to do with how/if the doctrine of promissory estoppel is eroding consideration so ignore all the nonsense about Lord Roskill!
Still, maybe you can use some of it. Here goes!
As briefly discussed in Question 1 my preference is to think of consideration as “……….consist(ing) (of)……….some right, interest, profit or benefit accruing to the party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other, Currie v Misa (1975) LR 10 Ex 153.
Put simply then, consideration is that part of the contract which provides a benefit to one party and a detriment to the other.
Perhaps not surprisingly, the courts have held that the performance of an existing contractual duty owed by one party to another is not good consideration, Stilk v Myrick (1809) 2 Camp 317. A simple example of this would be an offer by one party to make additional payment to another party for carrying out his existing contractual obligations. This would be unenforceable for want of any new consideration.
Prima facae there have been some exceptions to this rule. In Ward v Byham (CA) (1956) 1 WLR 496 Lord Denning held that performance of an existing duty in some circumstances can be sufficient consideration. The Court of Appeal came to the same conclusion in Williams v Roffey Bros. & Nicholls (Contractors) Ltd (CA) (1990) 2 WLR 1153.
However, these exceptions only apply to a promise by one party to supply goods or services in performance of an existing obligation, where there is an absence of fraud or extortion, and where the other party receives a practical benefit. The precedent made in Stilk v Myrick (1809) 2 Camp 317 therefore remains intact.
But what is the position where a party does not fully meet his contractual obligations?
A good example of where this might arise is in the part payment of a debt. Related to the traditional rule that performance of an existing contractual obligation is not regarded as good consideration is the principle that part payment of a debt is not usually consideration for a promise by the creditor to forgo the balance, Pinnel’s Case (1602) 5 Co Rep 117a.
The precedent established in Pinnel, though based strictly on obiter, was later applied in Foakes v Beer (1894) 9 App Cas 605. However, Lord Blackburn here identified an exception to the rule; that is where the debtor can show he gave some consideration for the creditors agreement to accept a lesser sum this would be good consideration. For example, if with the agreement of the creditor the debtor provides goods or services instead of cash, or he pays a lesser sum but earlier than the original sum was due then this will demonstrate consideration.
So far then we have seen that there must generally be consideration for a promise to make the promise enforceable.
This premise is however complicated and contradicted through the equitable doctrine of promissory estoppel.
In Maclaine v Garthy (1921) 1 AC 376 Lord Birkenhead explained that “where A……….justified B in believing that a certain state of facts exists, and B has acted upon such a belief to his prejudice, A is not permitted to affirm……….that a different state of facts existed……….”
It is easy to reconcile this with my earlier comments. If one party makes the statement that some service will be consideration for a cash debt, and the other party acts on this statement by providing that service, then the first party shall be estopped from reaffirming the cash debt.
There are however five limitations to the doctrine of promissory estoppel, identified by Lord Denning in Central London Property Trust v High Trees House Ltd (1947) 1 KB 130 and in his consideration of the earlier case of Hughes v Metropolitan Railway Company (1877) 2 App Cas 439.
Promissory estoppel may only be raised as a defense to an action to enforce a strict legal right that has been waived. There must be a promise to waive that legal right and an act in reliance of that promise. The doctrine will generally serve to suspend legal rights, though it might extinguish them, Finally, the doctrine is one of equity; the promisor will not be able to enforce his strict legal right if it would be unjust to do so.
Having briefly discussed the doctrine of consideration and promissory estoppel I will now consider the relationship between the two with particular reference to Lord Roskill’s comments in Brikom Investments v Carr (CA) (1979) QB 476, 486.
Having read Roskill’s statement I conclude that by his reference the extension of the doctrine of promissory estoppel he is by inference referring to the erosion of the five limitations identified by Denning.
This being so, it is easy to reconcile his view that extension of the doctrine could result in “……….abolishing……….the doctrine of consideration”
Most obviously, the act of giving a promise to waive a legal right does in my view already go some considerable way towards extinguishing consideration. However, should an act in reliance of this promise no longer regarded as one of the limitations then consideration would be completely eliminated from the equation.
Flowing I think from this would be an erosion of the principle that promissory estoppel can be raised only as a defense. It is not difficult to see how promissory estoppel could be used, not purely as a shield as is now the case, but also as a sword.
I am therefore minded to concur with Roskill’s argument though cannot remove myself from the belief that the doctrine in it’s present form already endangers the principles of consideration in contract.
Howard
BTW, You might also want to put something in about the intention to create legal relations to really add some weight to the essay.
If on Sunday 1st of June Byrony had asked Alex if she wanted to buy the bike this would be an invitation to treat. You are correct.
I’d then agree with you in saying that Alex’s letter of 22nd of June would be an offer.
What about the answer message? Was it an acceptance or was it a counter offer?
This is a bit tricky. Laura, you seem to think that by introduction of the “cash proviso” Byrony was bringing in a counter offer. You could be right but I don’t think so. Just by specifying that cash be the means of payment I don’t think deviates enough from the original offer to make it a counter offer.
The price didn’t change and nor did the means of payment as that means was never established initially. It’s not a change of terms of payment as none had been set.
I’d say the answer message was an attempted acceptance, and not a counter offer. If I’m right the next question to ask is was the acceptance valid?
Now, as you know, the precedent for acceptance where letters are concerned was established in Adams v Lindsell (1818); acceptance is complete on posting.
However, the courts have been reluctant to extend this to “almost instantaneous methods of acceptance”, Entores v Miles Far East Corp Bruner v Moore (1955); acceptance must be actually communicated.
I really don’t know what the law says about answerphones as I don’t think we have an case law on it yet but I’d agree with you that
“The traditional rule with acceptance that it must be communicated but this becomes difficult to apply where messages are handled by an un-staffed receptor, such as an answerphone.
acceptance sent in this situation should be considered to have been communicated when it is received by the offeror’s machine only where it is reasonable to expect the offeror to immediately become aware of the receipt In these circumstances it seems reasonable for Bryony to expect Alex to receive the telephone message therefore it may be concluded that acceptance was communicated to Alex”
If you had a case that would be a slam-dunk!
So, the only question left to answer is;
Did the letter of revocation take effect just because Alex read it before she played back her messages. Well, if we’re right above (that acceptance is communicated once received on the answer machine) then I’d say the letter would have no effect.
That being so, we have offer and acceptance! I’d say you’ve done a pretty good job on this.
Should you mention consideration? Absolutely. If point c) leads us to believe we have offer and acceptance then you should definitely go on to comment about consideration.
It may not be very helpful but here's part of an old essay I did on "consideration" way back. It’s actually got more to do with how/if the doctrine of promissory estoppel is eroding consideration so ignore all the nonsense about Lord Roskill!
Still, maybe you can use some of it. Here goes!
As briefly discussed in Question 1 my preference is to think of consideration as “……….consist(ing) (of)……….some right, interest, profit or benefit accruing to the party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other, Currie v Misa (1975) LR 10 Ex 153.
Put simply then, consideration is that part of the contract which provides a benefit to one party and a detriment to the other.
Perhaps not surprisingly, the courts have held that the performance of an existing contractual duty owed by one party to another is not good consideration, Stilk v Myrick (1809) 2 Camp 317. A simple example of this would be an offer by one party to make additional payment to another party for carrying out his existing contractual obligations. This would be unenforceable for want of any new consideration.
Prima facae there have been some exceptions to this rule. In Ward v Byham (CA) (1956) 1 WLR 496 Lord Denning held that performance of an existing duty in some circumstances can be sufficient consideration. The Court of Appeal came to the same conclusion in Williams v Roffey Bros. & Nicholls (Contractors) Ltd (CA) (1990) 2 WLR 1153.
However, these exceptions only apply to a promise by one party to supply goods or services in performance of an existing obligation, where there is an absence of fraud or extortion, and where the other party receives a practical benefit. The precedent made in Stilk v Myrick (1809) 2 Camp 317 therefore remains intact.
But what is the position where a party does not fully meet his contractual obligations?
A good example of where this might arise is in the part payment of a debt. Related to the traditional rule that performance of an existing contractual obligation is not regarded as good consideration is the principle that part payment of a debt is not usually consideration for a promise by the creditor to forgo the balance, Pinnel’s Case (1602) 5 Co Rep 117a.
The precedent established in Pinnel, though based strictly on obiter, was later applied in Foakes v Beer (1894) 9 App Cas 605. However, Lord Blackburn here identified an exception to the rule; that is where the debtor can show he gave some consideration for the creditors agreement to accept a lesser sum this would be good consideration. For example, if with the agreement of the creditor the debtor provides goods or services instead of cash, or he pays a lesser sum but earlier than the original sum was due then this will demonstrate consideration.
So far then we have seen that there must generally be consideration for a promise to make the promise enforceable.
This premise is however complicated and contradicted through the equitable doctrine of promissory estoppel.
In Maclaine v Garthy (1921) 1 AC 376 Lord Birkenhead explained that “where A……….justified B in believing that a certain state of facts exists, and B has acted upon such a belief to his prejudice, A is not permitted to affirm……….that a different state of facts existed……….”
It is easy to reconcile this with my earlier comments. If one party makes the statement that some service will be consideration for a cash debt, and the other party acts on this statement by providing that service, then the first party shall be estopped from reaffirming the cash debt.
There are however five limitations to the doctrine of promissory estoppel, identified by Lord Denning in Central London Property Trust v High Trees House Ltd (1947) 1 KB 130 and in his consideration of the earlier case of Hughes v Metropolitan Railway Company (1877) 2 App Cas 439.
Promissory estoppel may only be raised as a defense to an action to enforce a strict legal right that has been waived. There must be a promise to waive that legal right and an act in reliance of that promise. The doctrine will generally serve to suspend legal rights, though it might extinguish them, Finally, the doctrine is one of equity; the promisor will not be able to enforce his strict legal right if it would be unjust to do so.
Having briefly discussed the doctrine of consideration and promissory estoppel I will now consider the relationship between the two with particular reference to Lord Roskill’s comments in Brikom Investments v Carr (CA) (1979) QB 476, 486.
Having read Roskill’s statement I conclude that by his reference the extension of the doctrine of promissory estoppel he is by inference referring to the erosion of the five limitations identified by Denning.
This being so, it is easy to reconcile his view that extension of the doctrine could result in “……….abolishing……….the doctrine of consideration”
Most obviously, the act of giving a promise to waive a legal right does in my view already go some considerable way towards extinguishing consideration. However, should an act in reliance of this promise no longer regarded as one of the limitations then consideration would be completely eliminated from the equation.
Flowing I think from this would be an erosion of the principle that promissory estoppel can be raised only as a defense. It is not difficult to see how promissory estoppel could be used, not purely as a shield as is now the case, but also as a sword.
I am therefore minded to concur with Roskill’s argument though cannot remove myself from the belief that the doctrine in it’s present form already endangers the principles of consideration in contract.
Howard
BTW, You might also want to put something in about the intention to create legal relations to really add some weight to the essay.
Laura@leeds
thankyou sooo much Howard!! i don't know what's made you take pity on a random 18 year old first year law student but i am very grateful for whatever it is!! 
its a big relief to just know that the stuff i've already written is basically right. consideration is something that really confuses me, i've only just done it before i broke up for christmas. so basically i'm not sure how to apply it to bryony and alex's situation. the actual question is to 'advise' them so not sure how to discuss consideration and intention to create legal relations whilst advising if you see what i mean! heh, by the way feel free to tell me to get lost at any time, i realise you've better things to do than help me with my homework 
thankyou very much once again
Laura
its a big relief to just know that the stuff i've already written is basically right. consideration is something that really confuses me, i've only just done it before i broke up for christmas. so basically i'm not sure how to apply it to bryony and alex's situation. the actual question is to 'advise' them so not sure how to discuss consideration and intention to create legal relations whilst advising if you see what i mean! heh, by the way feel free to tell me to get lost at any time, i realise you've better things to do than help me with my homework thankyou very much once againLaura
No problem, Laura. I'm not taking pity on you as you seem to have a pretty good grip on the subject, without much assistance from me. But I was a first year law student myself once so I know it's nice to get a second opinion!
But, PLEASE bear in mind my contract law is a bit rusty so what I think cannot necessarily be taken 100% as read! (In other words, if you want to include any of my input but it's not 100% correct please don't sue me for negligence!)
As far as "advising the parties" is concerned that's the easy bit......
Now you've decided if there is offer/acceptance/consideration in each of the scenarios all you need to say is;
"Yes, the requirements for a legally binding contract have been established or No, they havn't" (Obviously, make it a bit more flowery than that!)
I'd structure it by drawing a conclusion (advising) on each scenario before moving on to the next scenario.
Easy peasy, lemon squeezy.
As far as consideration is concerned.......easier still.....
consideration ...........“……….consist(s) (of)……….some right, interest, profit or benefit accruing to the party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other, Currie v Misa (1975) LR 10 Ex 153"
Just try to think of consideration in terms of gaining one thing and giving up another.
The benefit to Alex would be to gain the motorbike. The detriment to Alex would be to give up $10000. For Byrony it's obviously visa-versa. How simple is that?!!
Howard
BTW, where are you studying law at?
Reply 7
She's at University of Leeds - those are the same essays I've been doing!
Isn't this a bit like cheating?
Isn't this a bit like cheating?
Reply 11
Justed wanted to say howard, you have helped me undertand so much.. even though i have not posted any questions reading some of your answers to other question has helped so much..
thanks and keep up the work.
Mizan
thanks and keep up the work.
Mizan
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