Contract law question

Hi, just wondering if anyone can help me out with a contract question please? I'm probably over thinking this...
A and B agree a sale of a car for £3000 with some terms and conditions, contract has been formed.
A comes back the next morning with his money to buy the car.
B says he's changed his mind and now wants £3100.
So at this point there's a breach of contract.
A is not happy but says ok and hands over £3100 in exchange for the car, ie a new contract is formed.
Does A still have the right to enforce the terms and conditions from the original contract?
Thank you to anyone who can help!!

Reply 1

spurs9393

I haven't studied this topic much but I would have thought that the original contract, and all terms and conditions in it, is void and thus the conditions cannot be enforced. They would have to agree terms regarding the second contract.

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Reply 2

cocofishy

Original post by spurs9393

That's what I'm thinking but not sure whether I'm just making things difficult for myself as this is a small part of a larger problem question! Thanks for the reply

Reply 3

TimmonaPortella

Original post by cocofishy

Does A still have the right to enforce the terms and conditions from the original contract?

Are there any more relevant facts?

If, for instance, A made clear that he did not intend to vary the contract or waive any right under it, he is absolutely entitled to insist upon the return of the money.

It really depends upon what intention you infer from his saying 'okay' and handing over £3100 rather than £3000. Whether you put this in terms of variation, waiver, or anything else, that is what it comes down to.

In a problem question you would really be expected to have read into the relevant law and cases on the point, rather than just saying 'I think there is another contract' etc.

if you assume from the beginning that a new contract was formed for £3100, again, what terms form part of the contract is a question of the parties' intention. It may very well be a sensible inference that the only part of the contract which the parties intended to vary was the price. In this case, since the accepted analysis is that a new contract is formed upon variation, there would be an implication of fact of all the other terms from the previous contract.

However, if such terms are enforceable, it is important to be clear that they are enforceable by virtue of contract B. The terms come from contract A, but contract A is no longer of legal effect.

(edited 8 years ago)

Reply 4

cocofishy

That's very helpful, thanks so much for taking the time to help. Makes perfect sense, I think the part I need to focus on is the intention. I'm going to 'advise A' to make a claim on the fact that the car in this case was not roadworthy (thus breaching an implied condition) as that approach seems better supported by case law and avoids the risk of the interpretation that the previous contract's terms don't apply, but this has helped me to clarify the situation in my own mind and explain my arguments much more clearly. Thank you!

Reply 5

NolofinwÃ«

Original post by cocofishy

Do you have the full facts for this? If these are all the facts you have, I have to say that I don't like the drafting of the question. I'll attempt a reply nonetheless. You've been asked to focus on whether A can enforce the original contract. So, you need to look for any reason why he could not. I can only see three reasons why he could no do so:

1. Breach + Termination: if B has breached the contract (which he has) and A has accepted this repudiatory breach (not entirely clear), and the breach is sufficiently substantial (I'll assume you know the law, so I won't just state it, as that will give the answer away. However, if you don't, your starting point is Hong Kong Fur Shipping v Kawasaki), then the contract is terminated. Therefore, A cannot enforce the 'terms and conditions' from the original contract; his best hope is to obtain a secondary duty/liability, probably damages.

2. Variation to the original contract: assuming the 'a new contract is formed' is your own explanation, this is not necessarily true. Consider whether a variation has (and/or should have) arisen to the original contract, testing all the normal criteria for contract formation (which applies to variations too). Williams v Roffey Bros is highly relevant. If it is a variation to the original contract rather than a new, independent contract, it follows that he cannot enforce the original terms and conditions, because the contract has new terms.

3. Promissory estoppel: can A be estopped from denying B the higher payment (£3100) on the grounds of promissory estoppel? Consider Woodhouse v Nigerian Produce Marketing, Hughes v Metropolitan Railway, Combe v Combe; Baird v M&S etc. If promissory estoppel does apply, then it follows that he cannot enforce the original terms, because he will be estopped from doing so.

Reply 6

cocofishy

Thanks for this. I think your first point basically covers it, but thanks for the other case references too which I'm about to read through. I'm studying part time and have only had a couple of lectures on contract so far, so all this info is very helpful to me & much appreciated :smile:

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