Contract Law Exam: Advice on Legal Position in Various Scenarios

The article provides legal advice on various scenarios related to contract law exam questions. It discusses the essential elements of a contract and the legal relationship between parties. It also covers the flexibility of the court to enforce certain clauses and the concept of good faith in consumer and commercial contracts.

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ANSWER BOOKLET
GDL: CONTRACT LAW JUNE 2022 EXAM
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EXAM DATE 06 JUNE 2022
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CONTRACT LAW
INSTRUCTIONS TO CANDIDATES
Where questions are sub-divided, candidates should not expect the sub-divisions
necessarily to be of equal weight.
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QUESTION 1
Zoe has a shop selling vintage clothes and accessories. She wanted to buy a table
to put in the middle of her shop to display jewellery on. She saw an advert in the
local paper for a table which said:
Zoe emailed Maja on 20 September and Maja replied by text the same day ( please
see Documents A and B). Zoe saw the reply, but didn’t respond that day.
That evening Zoe went out with some friends and one of her friends Jerome, told her
that he thought his aunt might be getting rid of a table and if so, Zoe could have it for
free. Zoe decided to wait to see if she might be able to get the table from Jerome’s
aunt. That same evening, she asked another friend Oscar if he might help her to tidy
up, move some things around in her shop and set up the new store window display.
Oscar was free on 21 September, so spent all day moving things around in the shop,
taking rubbish to the tip and helping her set up the new store window display. Zoe
was so pleased with how the shop looked that she said she’d give him £50 for his
help.
On 22 September, Maja sold the table to someone else. She left a voicemail for Zoe
on Zoe’s mobile phone that day telling her that the table was no longer available.
On 23 September, Jerome told Zoe that his aunt had decided to keep her table. Zoe
hadn’t listened to the voicemail from Maja, and emailed Maja saying that she would
take the table for £400. Maja emailed back to tell her that she had sold the table to
someone else.
On 24 September, a customer called Callie asked Zoe if she could put up a sign in
the shop window about her lost dog (see Document C). The next day Paul returned
the dog to Callie. He hadn’t seen the sign in Zoe’s shop, but had been able to call
Callie as her number was on the dog’s collar.
Advise Zoe in relation to her position to Maja and Oscar.
Advise Callie in relation to her position to Paul.
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Large Oak Dining Table for sale – 90cm
width by 120cm length - £400 please
contact Maja ([e-mail]) if
interested.

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Document A
E-mail from Zoe to Maja 20 September, at 3.15pm
Hi Maja, I may be interested in buying the table in the advert. Please could you send
me a photo. I’ve set out my mobile phone number below if that’s easier. Thanks, Zoe
(078XX XXX 432)
Document B
Text message from Maja to Zoe 20 September, at 4pm
Hi Zoe, Thanks for your email. I’ve attached a photo for you (NOT ATTACHED FOR
THE PURPOSE OF THIS ASSESSMENT). The table is yours if you want it for £400.
Thanks, Maja
Document C
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TYPE YOUR ANSWER HERE
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LOST DOG – PLEASE HELP
I have lost my dog, Crumpet [PHOTO ON
NOTICE – NOT ATTACHED FOR THE PURPOSE
OF THE ASSESSMENT]
£100 reward if you find him.
Please call Callie on 07211 XXX XX5

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QUESTION 2
Julie
Julie runs a dance school and rents a studio from Monika for £2,500 a month,
payable on the first day of each calendar month. Julie teaches some classes herself
and also has freelance dance teachers she sometimes uses. In February, Julie
injured her Achilles tendon, and was not able to teach her usual number of classes.
She had to cancel some classes and lost profits as a result. Julie was worried she
wouldn’t be able to pay the rent on the studio, so asked Monika if she might be able
to reduce the rent until her tendon was healed and she was teaching her normal
number of classes.
As a goodwill gesture, Monika agreed to allow Julie to pay £2,000 a month until she
was back to running her normal number of classes. Julie paid the reduced rent on 1
March, 1 April and 1 May. In the second week of May she saw the doctor, who said
she was completely healed and could resume all her normal activities. Julie is having
a meeting with Monika to discuss the rent and would like to know what is her position
both with respect to the payments on 1 March, 1 April and 1 May and payments
going
forward.
Monika
Monika owns a number of properties and is in the process of renovating an office
building which she also hopes to rent out. She needed to get the roof of the building
fixed and called Kasim, the owner of Capital Roofing Limited to enquire about this.
He said he would send out his Sales Assistant, Woody to discuss the job with
Monika. Woody met with Monika at the office building and quoted her £10,000 for the
job. He followed up by sending her the written quotation with a covering letter on
Capital Roofing Limited’s headed paper. Monika phoned Kasim to say that she
would accept the offer. Kasim was furious. He told Monika that Woody only had
authority to discuss the job and not to make offers in respect of the work. He said a
job like this would cost at least £15,000 and refused to do the job.
Monika was also interested in acquiring some office furniture for the office building.
She had heard about an auction of office furniture which was being run by a local
auction house called Better Auctions Ltd. Monika was particularly interested in a set
of 4 oak desks and matching chairs, which had been valued at £2,000, and was
advertised to be sold ‘without reserve’.
She attended the auction and bid £300 for the set of oak desks and chairs. She was
the only bidder, but Better Auctions Ltd refused to accept the bid as they thought it
was too low.
Advise Julie in relation to her legal position with Monika.
Advise Monika in relation to her legal position with Capital Roofing Limited
and Better Auctions Ltd.
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In the given situation, Julie is a tenant of Monika and runs a dance school but injured
accidentally. Later, she fails to pay the rent of studio due to insufficient funds. In a good faith
, Monika reduced her rent amount so that she can recover easily. After consultation with the
doctor, Julie resumed all her dance activities and discuss the rent to pay the arrears. It shows
that Julia and Monika is under contract of tenancy to perform certain rights and
responsibilities of each other (Martin, 2018). There are certain essential elements of contract
that make an agreement legal are mentioned below:
 Offer: There must have willingness of parties to enter into contract.
 Acceptance : An agreement is said to be accept when assent is given to such offer.
 Consideration: It is the most important elements that made an agreement legal. It is
a general rule that agreement must have some monetary value otherwise, it will not
termed as contract. It can be perform in past, present and future. In the given
situation , the Julie has paid all the rent on the future date to perform their part of legal
obligation.
 Legal relationship: In order to make contract, the parties must enter into legal
obligation to perform the terms and condition laid down under contract. Contract
made in love and affection does not create legal relation instead said to be social
relation between parties.
The contract law is deal with the common law and it is said to be written document signed by
both parties. It shows common intention of the parties agreed to perform their rights in the
same manner as prescribed by the contract law. It also provides damages and compensation if
any of the party breach the rights of other person of the contract. These are certain factors that
make contract void and voidable if any of the essential element is missing in the contract.
The tenancy agreement take place between the tenant and landlord comply the parties with
legal terms and condition and can be performed in writing or in oral (Noussia, 2019). The
tenancy agreement between Julie and Monika is executed on future date and not proceed the
execution date, then contract can said to be in effective only on the basis of its performing
date.
There are many commercial agreement contains express provision related to liability for
breach of rights. It is just like legal contract, tenant contract is legally binding and is
enforceable with the help of courts. The offer made by the landlord , agreed by the tenant to
enter into fixed term tenancy where Julia is residing in property and paying fixed amount of
funds every moth. According to UK contract law, tenancy agreement can be terminated only
when :
 There is mutual agreement between the parties.
 By notice
 By break clause
 Eviction
Therefore, the amount negotiated by the Monika is done under good faith, this show caring
nature of Monika towards his tenant. Monthly rental agreement can be negotiated after
considering several factors and in this case, the Julie health is one of the factor for reducing
the consideration of rent . According to English legal system, Court are flexible to enforce
certain clauses to make parties agreed on certain terms of the contract. There are exception
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clause where parties are allows to amend the price clause to resolve a dispute related to price
and negotiate the price of rent. The aim of the contract law is to secure the right of the
contracted parties. In the case of Prime Sight Ltd v Lavarello [2014] AC 436 at [47], the
Court ruled out that parties are free to choose the terms and court is responsible to enforce
them. The contract is made to perform the duties and rights specified in the contract and if
any of the situation is arises where landlord has to act in good faith , than flexibility is given
to the landlord to made necessary changes as and when required in prices. The common law
provides principle of natural justice and equity to the citizens. In the case of Courtney &
Fairbairn Ltd v Tolaini Brothers (Hotels) Ltd., the Court exercised their jurisdiction and
held that parties are free to negotiate fair and reasonable sum of rent under their contract. The
Court further held that contract to negotiate is just like a contract to enter into contract , not
contradictory to contract of law.
The UK contract law also includes concept of good faith in consumer contracts and wide
the scope of commercial contract. There is no recognised set of principles related to
negotiation but developed with legal pronouncement.
2. The Contract between the Monika and Capital roofing Limited is said to invalid as Woody
is not authorised to enter into contract on behalf of the Capital Roofing Limited. It means
contract must be signed by the parties who actually carried out those contract. Contract can
be formed any individual or agent but that person is legally entitled to made such contract
otherwise contract will be void. There are two words known as actual contract formation
authority and apparent contract formation authority. The Woody comes under the purview of
Apparent contract formation authority and take part in the process of contract formation as
third parties. It shows that party is acted in bad faith to cause dishonesty with the Monika.
This kind of unreasonable behaviour of Capital Roofing Limited towards his customer is
unfair and unacceptable. The Woody was Sale assistant and not authorised to make contract
with the Monika. In order to make apparent contract , following elements are need to be taken
into consideration such as:
 Representation: The elements defines the role of agent while making contract must
hold the position of real agent who have some authority recognised under law.
 Commitment: The agent is required to fulfil the commitments made under the
contract to comply with it. He is acting as a third party by using apparent authority.
 Reliance: The authority enters into contract make a commitment and reliance on the
exercise of contract.
The contract law is provide wide range of protection to the parities involves in the
contractual agreement.
There is another provision related to ratification of contract if the unauthorised parties
entered into contract. The person has lacked authority or exceed their authority can ratified
their principal on future date (Swain, 2019). The contract made by the Monika with the
Woody can be rectified by the Capital Roofing Limited to make it valid contract. In the case
of MVV Environment Devonport Ltd v NTO Shipping GMBH & Co KG [2020] EWHC
1371 (Comm), the Court held that party alleged that shipping agent has acted as an agent of
the company to act on behalf of them. The offer was accepted by way of emails and later he
came to know that he is not actual agent . Therefore, the contract was later rectified by the
principal agent of the company.
Monika had decided an auction of furniture with an auction house called Better Auctions Ltd.
There are certain rules related to auction of sale under English Contract law, that has been
defined under law of contract. It includes :
 there must be sale agreement.
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 There must have contractual relationship.
 Must be in writing.
According to Halsbury's laws of England defines the auction as it is made to sale or to let
out the property to the highest bidder with the aims to achieve higher profit on such auction.
The Monika tries to bid the office furniture at low price and that is the main reason for
refusal for accepting the bid from Monika (O'Leary, 2018). The Better Auction Ltd. Accept
the higher bidder to make auction sale.
Auction sale has economic value as it is practised for along time. It is generally take place
to sale land, antic goods, industrial equipments etc. It is the most suitable way to sale the
goods at higher prices. It's main objective is to sale the goods at fair prices and encourage
competitive spirit in the market. The auctioneer is act as an agent of the land and furniture to
make auction of sale. The auction sale agreement is made between the parties to evaluate the
actual prices of the goods. The UK contract law defines the four essential requirements for
auction related contract which includes:
 It includes contract between the bidders
 one is made bid and other is accepted the goods. .
 Existence of collateral contract between the actioner and bidder.
There is two kinds of auction , one is said to be sale with reserve and other is sale without
reserve. The distinction between these two shows different approaches of auction. The
auction is generally take place without reserve. In this, invitation is given to various bidders
to active participate in the auction of sale and accept the higher bid. In the case of Harris v
Nickerson (1873) LR 8 QB , in this, auctioneer is failed to recover the amount makes in
placing the auction sale . The Court held that mere intention to part in auction sale is very
complicated to accept the offer. Therefore, it is very difficult to identify the intention of the
parties whether they are making auction al sale with reserve or without reserve. The decision
for selling furniture at low bid exempt her from auction ale of furniture. There are variety of
products can be sale by auction as it require proper mechanism to make sale (Paull, 2021).
The contract is made for auction sale and must have fulfil all the essential of valid sale
agreement. There must be a provision for express and implied of contract and must be in
writing. The parties are obliged with all the terms and condition of the sale agreement, The
auction of sale is generally invited through an advertisement and have greater economic value
and helps in smooth transaction of money between the parties.
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REFERENCES
Books and Journals
Martin, S., 2018. The Evolution of Good Faith in Western Contract Law. Available at SSRN
3177520.
Noussia, K., 2019. Comparative Analysis of Transparency in the Insurance Contract Law of
the Common Law Jurisdictions. In Transparency in Insurance Contract Law (pp.
705-713). Springer, Cham.
O'Leary, B., 2018. The twilight of the United Kingdom & Tiocfaidh ár lá: Twenty years after
the Good Friday Agreement. Ethnopolitics, 17(3), pp.223-242.
Welisch, M. and Poudineh, R., 2020. Auctions for allocation of offshore wind contracts for
difference in the UK. Renewable Energy, 147, pp.1266-1274.
Wilson, M., 2019. Auctions: policing the saleroom. In Art Law and the Business of Art.
Edward Elgar Publishing.
Paull, B., 2021. NEC Contracts: A Charter for Good Faith not Contract Breaking.
Tung, S., Ye, A. and Tan, K., 2021. Enka v. Chubb Russia: The Law of the Arbitration
Agreement-An End to the Continuous Battle between the Law of the Seat and the
Law of the Underlying Contract?. Contemp. Asia Arb. J., 14, p.137.
Swain, W., 2019. Contract law pedagogy: A new agenda. In Reimagining Contract Law
Pedagogy (pp. 228-230). Routledge.
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QUESTION 3
Bridge Galleries Limited (‘Bridge Galleries’) runs five galleries across the UK,
including Newbridge Gallery in Manchester. Newbridge Gallery regularly puts on art
shows of both established and upcoming artists.
Bridge Galleries was organising a new show at Newbridge Gallery titled ‘Art from the
North’. It was designed to feature paintings and sculptures by artists from the North
of England. Bridge Galleries’ usual building and decorating firm (who they normally
used to prepare for exhibitions) was not able to help get the gallery ready for the
exhibition. As a result, the Art Director of Bridge Galleries, Sylvia, contacted a few
specialist building and decorating businesses that dealt with galleries to get the walls
painted and ready to hang the paintings.
One of the businesses she contacted was GoTo Galleries Limited (‘GoTo’) who sent
her a quotation (see Document D attached). GoTo is a small building and
decorating business that had recently started up and was trying to build its business.
As timings were tight, Sylvia phoned GoTo to accept the offer.
GoTo came and painted the walls of Newbridge Gallery, as well as fitting new hooks
for hanging the paintings. They also put up a reinforced shelf to display some of the
sculptures.
A few days before Art from the North was due to open, one of the new hooks came
out of the wall and the painting that was attached to the hook fell onto the floor and
was damaged. Further the reinforced shelf buckled and the sculpture on it fell off.
Fortunately the sculpture wasn’t damaged, but the shelf needed replacing. Sylvia,
tried to contact GoTo, but they did not answer her calls.
She had to get another company to come to fix the damage. The cost of repairing
the wall, hook and shelf was £2,500. Further, the painting needed restoring which
cost £500. Sylvia wasn’t able to get the repairs and restoration done in time for the
opening date of Art of the North and had to postpone the opening for one week.
Sylvia estimates that Newbridge lost £3,000 in profit because of this.
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The company that fixed the damage said that the hook itself was of good quality, but
that the hole to put it in hadn’t been drilled deep enough for it to stay in. The shelf
had been correctly attached to the wall, but the material it was made of wasn’t
sufficiently strong to hold up heavy sculptures.
12 days after the work had been carried out by GoTo, Sylvia managed to get in
contact with GoTo about the work and the loss she says Bridge Galleries has
suffered. GoTo referred her to the Terms and Conditions on the back of the
quotation (see Document E attached) which she had not looked at before entering
into the contract.
Advise Bridge Galleries on their legal position in respect of GoTo.
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Document D
Document E
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QUESTION 4
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GOTO GALLERIES LIMITED
Date: XXXX
To Bridge Galleries Limited:
QUOTATION
For work to be done at Newbridge Gallery (Manchester)
- Painting gallery walls
- Fixing 15 hooks for paintings
- Fitting 1 reinforced shelf (110cm length by 55cm depth) to display
sculptures on
£4500 including VAT
All work, paint and materials included
PLEASE NOTE THIS QUOTATION IS SUBJECT TO THE TERMS AND
CONDITIONS OVERLEAF
TERMS AND CONDITIONS
1) We shall not be liable for any loss or damage arising from any failure of materials or
workmanship unless we have received notice of the complaint within 14 days of
completion of the job in question.
2) We shall not be liable for any loss of profits arising from any failure of materials or
workmanship.
3) Save in respect to death or personal injury caused by negligence, any other loss arising
from any failure of materials or workmanship shall be limited to £2000.

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Peaceful Escapes Ltd (‘PE’) is a small company which runs yoga retreats. It has
recently acquired a detached property called Greenways in a rural area which
requires renovation. PE will offer both day and weekend retreats at Greenways and
the property has three bedrooms which can be adapted for overnight visitors.
PE employed some electricians, Brightsparks Ltd (‘Brightsparks’) to rewire the whole
of Greenways including fitting dimmer switches in the main room where yoga classes
would be held. PE agreed to pay £1,000 in advance and £5,000 on completion of the
works. Brightsparks carried out the work. Most of the work was done well, but the
dimmer switches in the main room were installed incorrectly and when PE tried to
use them the lights flicker and make an annoying buzzing sound. Brightsparks has
not got any time to fix the switches. Another electrician has estimated that it would
cost £400 to fix the switches. PE hasn’t paid Brightsparks the balance yet and
Brightsparks is asking for payment of the outstanding amount.
PE also employed a firm of decorators, Clean and Bright Decorators (‘Clean and
Bright’) to decorate the interior of Greenways. PE asked for the library, which was
supposed to be a quiet space, to be painted a pale sage green colour called ‘Sunday
Green’. They also asked Clean and Bright to put wallpaper in the three bedrooms for
the overnight guests. The wallpaper had quite an intricate pattern on it, which
needed to be lined up correctly for the pattern to match properly.
Clean and Bright carried out the work on time. However, they didn’t properly
measure the wallpaper and so the pattern doesn’t match up. Further in places it
doesn’t completely cover the walls. They did a good job of painting the library, but
used a different colour green to the one agreed. They used a pale green colour
which was lime rather than sage, called ‘Green Citrus’. PE is very unhappy with the
work. They really wanted the sage green colour as they thought it would be a restful
colour for the quiet space.
Because of the poor wallpapering, PE has had to cancel some of its bookings for
overnight guests and has suffered loss of profit as a result. One of the guests was a
celebrity who was looking for a place to stay away from the media and press and so
was willing to pay more than the usual rate for this. PE estimates that it has lost
profits in the amount of £450 from its usual customers and an additional £500 from
the celebrity.
It will cost £2,050 to repaper the walls and £1,080 to repaint the library. Clean and
Bright has responded to complaints saying it can’t do anything about the wallpaper
as the labourer who does the wall papering has since left. In their email to PE, they
said “we don’t understand what the problem is with the library, light green is light
green.”
Advise PE in relation to their legal position with Brightsparks and Clean and
Bright.
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QUESTION 5
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“…one of the most striking features of the doctrine of frustration in English law is the
narrow scope within which it operates… the doctrine is rarely invoked and, … where
it is applicable, its effect is to discharge the contract. The courts are not given a
power to adjust the contract to meet the changed circumstances; they must either
uphold the contract according to its terms or set it aside. … The current English
position may be harsh on a party who has entered into a bad bargain, but it has the
merit of being clear. Once again we can see the tension between the demands of
certainty and a concern for fairness.”
Ewan Mckendrick Contract Law, Text, Cases and Materials 9th Edition
Explain and discuss the statement above, with reference to decided cases. Is
the doctrine of frustration too narrow? Give reason(s) for your answer.
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The device used in the English contracts governed by the common law where due to
some unforeseen circumstances or events, the parties are unable to fulfil the obligations set
up in the contract or where it certainly becomes impossible for the parties to abide by the
contract is known as Frustration (Beale and Twigg-Flesner, 2020.). Until 1863 no such device
existed in the English law system but with the case of Taylor v. Caldwell, the establishment
of such device in common law took place. Though then the impossibility began to be used as
defence for the breach of contracts under the vices of doctrine of frustration but the
application of this doctrine considered to be very narrow and insufficient to meet the
objective of its formation though since its inception it has been expanded considerably. It is
also stated by Lord Roskill that the doctrine of frustration should not be used to evacuate the
liability of breach of contract arising from the general outcomes of imprudent bargains by the
parties.
Since 2020 after the world have been hit by the pandemic many of the parties are willing to
get the remedies for contracts without being indulged in the proceedings for the patent breach
and for this they are turning had towards the doctrine of frustration existing under the English
common law. Frustration applies where an unforeseen event makes performance of the
contract impossible. If a declaration is defeated it efficaciously ends and the contracting
parties are discharged from the liabilities of their contract. It is quit beneficial to the party
who may be struggling from the situation to fulfil the obligation and still unable to meet the
ends. But the current two cases shows the approach of the court for the application of this
doctrine which is very narrow.
Test of frustration under Common law
The parties are expected to abide by the terms of contract they entered into and fulfil the
obligations too in every circumstances but the court may while applying the doctrine of
frustration exonerate such liability and discharge the parties from the performance of
contracts. The doctrine can only be applied where the events are contemplated in the terms by
the parties. Thus in three situations it applies making the performance either illegal or
impossible or anything which is originally envisaged as something else and turned to b
radically different. The condition of the contract that it had become onerous or more pensive
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than the one contemplated is not enough to make the doctrine of frustration applicable on it
(Benoliel, 2019.). It will also not apply on the cases where knowingly the risk was taken by
any of the party making the operation of the contract impossible.
Temporary Frustration : Court's Approach
In Bank of New York Mellon v. Cine-UK Ltd. 2021 case, by the masters of High court, the
liability of paying rent was imposed on tenants even after various restrictions are placed by
the government on such payment considering the pandemic situation. The tenants pleaded the
temporary frustration based on the fact that due to the existence of pandemic they were
forced to keep the premises under them closed because it was not commercially feasible to
them to keep the premises open during that time. The court while rejecting the plea of such
tenants stated that thee is nothing in existence like the term temporary frustration. The
contract can either be frustrated or not. Such contention or plea of tenants was considered to
be void in reference to the common law in England. The frustration ultimately leads to the
end of any contract and thus it cannot be operative for temporary period where it is stated
that the contract shall take effect after a particular period of time. Thus the contract cannot be
revived after frustration.
It was stated that only when the limited use of the premises is allowed by the contract and
those becomes impossible that the contract is allowed to be frustrated in the case of
supervening event. Though in the case of closure of premises for the specific period the
doctrine of frustration may apply but it also will be in are case and not in all such cases
generally. The required test for the application of the doctrine of frustration here may be like
the one state in The Sea Angel 2007 case. Here it refers it refers to the times when situations
have become so radically different from the ones contemplated by the parties that it has
altogether impossible for the parties to fulfil the obligations stated or created under the
contract. It means that the performance if insisted would become unjust for the parties of the
contract.
Thus the above mentioned case court held that parties are not eligible by the circumstances to
make the application of the doctrine of frustration necessary as they definitely could not have
predicted the pandemic but the term of the lease is not restricted to such time period. The
lease being longer do not necessitate the application of the doctrine.
Doctrine and terms of contract
The claim for due amounts and unpaid rent for the lease of the boing aircraft by the jet ltd.
Was concerned under the case of Wilmington Trust SP Services... v Spice-jet Ltd. 2021. the
contract being such that the lessee assumed all the responsibilities and risks associated with
such crafts during the continuation of the lease which was 10 years (Cahoy, and Oswald,
2020.). Due to pandemic the company could not make full use of the first aircraft and other
two were destroyed in the crashes, it thus claimed the frustration of the contract due to
unforeseen circumstances arisen in such a manner the performance of the contract became
impossible. The contract contained the clauses which made the contract absolute and
unconditional and thus the court held in favour of the liability t imposed due to the terms of
the contract making the doctrine of frustration non applicable on the particular case. The risk
undertaken by the company was that whole commercial risk for the operation of the aircraft.
Thus the court considered that the length of the leas does not matter in such cases where the
contracting terms are clear enough for stating the liability and that the suspension for just
10% of the leas do not constitute frustration in common law of England.
Considerations for the new contracts
The above cases clearly states the approach of the court while applying the doctrine of
frustration which is not to consider the severity of the event claimed to have frustrated the
contract rather it is oriented towards the terms of the contract. Thus the parties entering into
new contracts shall have following considerations:
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 It is significant that the clear allocation of the obligations and other risk factors should
be there whilst the parties entering the contract which may have uncertainty of events.
 If there exists any key factor the creation or resting of the obligation in the terms of
the contract then that should also be clearly specified so as to do away with the
ambiguity of terms.
 The words imposing the absolute or unconditional liability should be avoided until
and unless the parties are not sure of the vents that may erupt in between leading to
the failure of the parties to fulfil the conditions. The circumstance in which the parties
are not willing to pay for the products or services shall be ascertained before hand and
then only the conditions restricting the frustration shall be entered by the parties.
 The term of the lease or contract shall also be had regard to. It may become difficult
to let the contract which are of long term to be under the application of the doctrine of
frustration. Thus all this should be kept in mind and under consideration by the parties
while entering the contract under the common law of England.
The parties entering contracts of all types shall keep it mind that though the doctrine of
frustration exists but the courts are not easy to convince on its applicability and the threshold
of proving on the frustration is very high (Cooper,and Kirk, 2021.). The courts do not provide
the doctrine of frustration as a remedy in every case where the non fulfilment of the
obligations is considered to be the result of some uncertain event making it impossible in
performance. Thus the application of the doctrine of frustration is only in rare cases.
Limits to the doctrine of Frustration
The courts have forced a few cut off points on where agreements will be disappointed, so as -
in light of a legitimate concern for conviction - not to set parties free from their legally
binding commitments too without any problem. A significant constraint is that monetary
difficulty, or a 'terrible deal', won't deliver an agreement disappointed. Subsequently, in Davis
Project workers v Fareham UDC, the courts declined to deliver an agreement for building
work disappointed simply in light of the fact that the cost of work and materials had
expanded. Ruler Reid made sense of the qualification between an agreement turning out to be
more cumbersome, and being of an alternate kind:
In an agreement of this sort the worker for hire embraces to accomplish the work for an
unequivocal total and he faces the challenge of the expense being more prominent or short of
what he anticipated. Assuming postponements happen through nobody's shortcoming that
might be in the examination of the agreement, and there might be arrangement for additional
time being given: to that degree the other party faces the challenge of deferral. Be that as it
may, he doesn't face the challenge of the expense being expanded by such postponement. It is
possible that postponement could be of a person so unique in relation to anything considered
that the agreement was at an end, however for this situation, as I would like to think, the most
that could be said is that the deferral was more prominent in degree than was normal. It was
not brought about by any new and unforeseeable component or occasion: the occupation
ended up being more difficult however it never turned into a task of an alternate kind from
that considered in the agreement.
Of significance in concluding whether an agreement is disappointed is that the occasion can't
have been in any capacity prompted by both of the gatherings. For instance, a case of
disappointment was denied in Sea Drifter Big haulers Company V/O Sovfracht, where a
charterer for a boat permitted it to go through the Suez Trench, and consequently become
stuck (following the conclusion of the channel during wartime). Moreover, where a baffling
occasion is predictably instigated, a case of dissatisfaction might be denied. Sea Public Fish
Ltd v Sea Fishing boats Ltd epitomizes this guideline (Herian, 2021.). Sea Public Fish
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contracted to enlist a steam fishing boat fitted with an otter fish, from Sea Fishing vessels
Ltd. The two players realize that the utilization of such a vessel without a permit was
unlawful. Consequently, Sea Public Fish applied for five licenses from the Canadian
government, notwithstanding, just three were conceded. Sea Public Fish didn't name the
recruited vessel from Sea Fishing vessels as one of the authorized vessels, and wouldn't
proceed with the recruit, on the grounds the agreement was baffled. Their allure was
dismissed in light of the fact that they, at the end of the day, had faced the gamble challenges
a few licenses might be denied, and by in this manner not designating a permit to their
contracted steam fishing boat, the dissatisfaction was self-prompted.
The parties are discharged from the liabilities once the doctrine of frustration applies meaning
that the future performance of any of the terms of contract is not required and the terms or
obligations which have already been performed by the parties are termed as clause of court or
arbitration which are to be decided by the court while allying the doctrine.
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REFRENCES
Books and Journals
Beale, H. and Twigg-Flesner, C., 2020. COVID-19 and Frustration in English law. Hugh
Beale and Christian Twigg-Flesner," Covid-19 and frustration in English law" in Sergio
Garcia Long, Derecho de los Desastres: Covid-19 (Pontificia Universidad Católica del
Perú, 2020).
Benoliel, U., 2019. The Impossibility Doctrine in commercial contracts: An empirical
analysis. Brook. L. Rev., 85, p.393.
Cahoy, D.R. and Oswald, L.J., 2020. A serendipitous experiment in percolation of intellectual
property doctrine. Ind. LJ, 95, p.39.
Cooper, T. and Kirk, E., 2021. Contract Law. Routledge.
Herian, R., 2021. Smart contracts: a remedial analysis. Information & Communications
Technology Law, 30(1), pp.17-34.
Jayabalan, S., 2020. The legality of doctrine of frustration in the realm of Covid-19
pandemic. Sociological Jurisprudence Journal, 3(2), pp.84-90.
Kovac, M., 2018. Frustration of purpose and the French Contract Law reform: The challenge
to the international commercial attractiveness of English law?. Maastricht journal of
European and comparative law, 25(3), pp.288-309.
Pargendler, M., 2018. The role of the state in contract law: The common-civil law
divide. Yale J. Int'l L., 43, p.143.
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QUESTION 6
For many years Samira has collected antique dolls. At a car boot sale she noticed
some old dolls that Alex, a private individual, was selling. There were 4 dolls that
came together as a set and another doll which was slightly different and had red-
hair. Samira thought the dolls might be suitable for her collection. She told Alex that
she collected antique dolls as a hobby and was interested in buying the dolls for her
collection. She told Alex that she was only interested in dolls from the 19th Century.
Alex said that the dolls had been in his family for well over a hundred years. Alex
also said that he thought they were all bisque dolls (which were a special type of doll
which had been manufactured in Germany and France since the 1850s), although
Samira might like to research this. He also pointed out that the doll which had red
hair was especially rare because her hair was made from real human hair, rather
than man made products and said Samira would have to pay for this one separately
from the rest of the dolls. Samira knew that bisque dolls were especially sought after
by collectors, but didn’t bother to do any more research to check the origins of these
dolls. Samira said that she would think about it. She returned two weeks later and
bought the set of dolls for £1,000 and the red-haired doll for £300.
A month later, Samira needed to raise some money for urgent repairs to her car. She
decided to sell the dolls she had bought from Alex to an antique dealer, Appletons
Ltd, specialising in antique toys and dolls.
When Appletons Ltd’s expert examined them, he told Samira that the dolls about 50
years old, so could not have been in anybody’s family for over a hundred years.
Further, they were not bisque dolls made in Germany or France, but rather dolls
which had been manufactured in England in the 1960s. The expert said all the dolls
had hair made from synthetic material, although the red-haired doll could be sold
separately as red-haired dolls were more unusual. As a result, when Samira sold the
dolls to Appletons Ltd, she only received £300 for the set of dolls and £100 for the
red-haired doll. If the dolls had been as described by Alex the set would have been
worth £1,500 and the red-haired doll £500.
Advise Samira what rights and remedies she may have against Alex in respect
of the dolls.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TYPE YOUR ANSWER HERE
Facts in Issue-
There is a girl named Samira who has the hobby to collect the rare and antique dolls.
One day, Samira went to a car boot where she found a man named Alex who is selling the
antique dolls. The Alex showed that he has all the antique dolls from nineteen century. More
over, there is a set of four dolls that cost 1000 euro. Alex assured Samira that the dolls were
in his family from last hundred years. Moreover, the Alex also assured that the dolls are the
specialised bisque dolls. The dolls which had been created in France and Germany are called
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as the Bisque dolls. The other doll which is of red colour hair is also purchased by the
Samira. The Alex told that the hairs of the red doll is made up of human hairs and not with
the synthetic fibres tat are produced in the market. The red hair doll is sell for 300 Euro to
Samira by Alex. Moreover, Samira did not checked the originality of the dolls. When the
Samira wanted to sell the dolls in order top repair her car. Then the Samira would know that
all the dolls were fake. This is because no ball belongs to the nineteen century as they were
made only fifty years ago as decided by the expert of the Appletons Ltd. Moreover, the hairs
of the red doll was also made up of synthetic material. This causes a huge loss to Samira as
she only sold the set of dolls for 300 euro which could be sold at 1500 euro if it is real. The
red doll was sold for 100 euro that could be sold for 500 euro if it is real as explained by the
Alex(Bridge, 2004).
Relevant law and Applicability-
The term contract can be defined as an agreement between minimum of two parties
who agrees to do or not do some act as per the contract. The contract is binds able by the law
of the country. Moreover, there are four main elements of the contract law as per the law of
the country. These four basic elements includes the offer, acceptance, consideration and the
intention to create legal obligations between the parties to the contract. The offer can be made
by the party known as the offerer where he can offer any thing to the other party which is
known as the offeree. The offer can be made in the verbal or the written form. Moreover,
before the offer, there also lies the invitation to the offer(Chen Wishart, 2019). The second
essential is the acceptance that can be done when the party to the contract accepts the offer
made by the offerer in the context. There also lies the third essential of the consideration.
There must be a existence of the consideration in the agreement to make into the contract
form. Moreover, if there is no consideration, then there is no contracts as per the contract law
of the country. The fourth and the last element is that the intention to create the legal relations
between the parties. There must lie the intent of both the parties to the contract to make such
contract. If any of the party dies not have the contractual intention, then there would be no
existence of the contract between the parties of the contract(Collins, 2021).
In the present case scenerio, all the valid essentials of the contract is fulfilled by both
the parties. This can be seen as the offer to purchase of the antique doll is made by Alex to
Samira. There also lies the acceptance given for that offer by the Samira. The consideration
of 1000 euro and 300 euro is also present in this case scenerio. Moreover, both the parties
namely Alex and the Samira has the legal intent to formulate such legal relationship between
them . Moreover, all these elements are complied by and carried off in the present case
study. Hence, the Samira is liable to the breach of the contract. Th Samira has suffered a loss
due to such breach of contract in the present case study. The breach of contract arises when
any of the party does not comply with the conditions of the contract. Here, in this case , the
main condition is that there must exist the antiquity in the dolls and that main condition is not
fulfilled by the Alex in the case study. So, in this case the Samira is liable to get access to the
courts in order to receive the justice. The court can provide with the remedy of the monetary
compensation that is to be paid to the Samira by the Alex(Phet, 2019).
The misrepresentation is the condition where the material facts are made hidden from
the party to the contract. This can also be understood as presenting the material information
in such a way that is not real and true. More over, here in this case the material information
related to the dolls are misrepresented by the Alex. Moreover, the Alex is also held liable for
the remedies that has to be paid by him in case of the misrepresentation. The Samira was
falsely made assured by the Alex that the dolls are the rare dolls that are formulated in the
Germany and the France. Hence, the condition is purely of the misrepresentation as per the
contract law of the country. Moreover, the misrepresentation also results into the fraud in
accordance with the Fraud Act, 2006 of the United Kingdom. The misrepresentation can
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further be classified into the fraudulent misrepresentation, innocent misrepresentation and the
negligent misrepresentation as per the contract law of the United Kingdom. Moreover, this is
the case fraudulent misrepresentation(Salih, 2020).
In the above case study, the Fraud Act of 2006 will also be applied in order to prove
the element of fraud by false representation which is being dealt under section 2 of the
aforesaid act. Section 16 of the Theft Act 1968 will also mark its application on the discussed
case scenario which talks about the act of receiving any kind of pecuniary advantage by the
matter of deceiving the other party. In the cases where the defendant make any type of false
representation will be covered by the Fraud Act. The essentials of section 2 of the Fraud act
are, falsely representing the material fact, dishonest intention, having the knowledge that the
representation could be uneven or deceptive, an intention to make a personal gain or profit by
causing loss to the other person. This act is concentrating on the defendant's behaviour or the
act in which he failed in disclosing the right information to the aggrieved party. In the case of
Samira, Alex made false remarks and does not disclosed the correct details of the antique
dolls in order to acquire monetary benefit from Samira. Which is considered as a fraud
representation under the Fraud act. The facts of the case also satisfies the postulation of
section 16 of the Theft act under which Alex received a pecuniary advantage by the act of
deception(Smitsed, 2018).
The aggrieved party after being misrepresented by the act of the defendant that is
Alex, holds the right to approach the court of law and can ask for the required remedy against
the defendant from the court. Samira has to prove that she has been deceived by Alex in
terms of the antique dolls for which the defendant has promised the plaintiff that the dolls
were manufactured in the 19th century and received 1000£ for the pair of three dolls and 1000
£ for the bisque doll for which the defendant claimed that the red hair of that doll are real
instead of synthetic hair. The main burden of proof is required to address by the defendant in
which he has to prove that he has disclosed the correct information to the plaintiff in terms of
the antique dolls. Then the court will decide the case and provide the remedies accordingly.
The remedies are being provided for the misrepresentation of fact under the breach of
contract where the defendant has falsely present the facts about the antique dolls.
There are various types of remedies for the breach of contract. The rightful remedy is
being given by the court on the basis of the nature of the contract, terms and conditions of the
contract, circumstances of the case in which the breach has occurred. They are as follows-
Compensatory damages – These are one of the most common remedies which is given by
the court in terms of any breach. The compensation is measured on the basis of the loss
occurred to the aggrieved party as a outcome of the breach done by the defendant. There
are two types of compensatory damages, one is expectation damages and other is
consequential damages. The former contains the damages that are generally awarded to
the plaintiff. And the latter involves the damages that stream as a natural outcome of the
breach(Stone, 2021).
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Specific performance – It is a kind of a remedy in which the court orders the defendants to
perform their part of obligation in a contract which they did not performed earlier. This
remedy is only being given when the plaintiff has performed the duties on its part
according to the terms of the contract. Basically, pecuniary benefit prevails over specific
performance. The remedy of specific performance is ordered only when the court thinks
that the monetary damages will not be enough for the plaintiff against the violation of the
contract.
Injunction – There is slight difference between injunction and the specific performance. In
former the court orders the defendant not to perform the specific task or work and in
latter the court orders to do the particular task in order to fulfil the requirements of the
contract. Injunction can be of two types, one is permanent and second is temporary.
permanent is ordered as a final verdict of the court while temporary is given in between
the proceedings of the case or when the case is pending before the court in order to
reduce the possibility of the expected damage.
Recession – The word recission means to rescind or to end the particular contract. The other
party who have experience breach of contract as a consequence of the act of the other
party, instead of receiving any monetary or other kind of damages, the plaintiff can end
the contract on its part. This particular remedy puts the parties on the former position
when they have not entered into that contract. In order to prove the rationale behind
rescission, the non – breaching party is required to prove that the damage was
substantial.
Liquidated Damages – These damages are the particular amount which has been decided by
the parties in the terms of the contract. It means that when it is difficult to measure the
sum of compensatory damages then the parties rely on the amount which was
specifically stated in the provisions of the contract in which have entered. For example-
partnership agreements. But the court can decline the agreed amount if the sum is
greater or smaller than the damages.
Nominal Damages – As the name suggests, these damages are minimal in nature and are
awarded by the court when the breach occurs but it does not harm the plaintiff in any
sense. Just to form a name of compensation for the breach, minimum amount is being
charged from the defendant. Because it do not results in any kind of loss or harm to the
plaintiff.
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In the above case study, Samira can claim damages in the court and according to the loss or
harm occurred to the plaintiff, the court will award the remedies(Zhou, 2008).
REFERENCES
Bridge, M., 2004. Innocent misrepresentation in contract. Current Legal Problems, 57(1),
p.277.
Chen-Wishart, M., 2019. Contract law. Oxford University Press.
Collins, H., 2021. Good faith in European contract law. Oxford J. Legal Stud., 14, p.229.
Phet, S., 2019. Offer and Acceptance under Laotian Law considering Principles of European
Contract Law: A Comparative Study. Jura: A Pecsi Tudomanyegyetem Allam-es
Jogtudomanyi Karanak tudomanyos lapja, p.449.
Salih, R.S., 2020. The Concept of Offer in Different Legal Systems. JL Pol'y &
Globalization, 101, p.146.
Smits, J.M. ed., 2018. Contract law: a comparative introduction. Edward Elgar Publishing.
Stone, R., 2021. Forming contracts without offer and acceptance, Lord Denning and the
harmonisation of English contract law. Web Journal of Current Legal
Issues, 2012(4), pp.n-a.
Zhou, Q., 2008. Misrepresentation in English Contract Law from an Economic Perspective.
The University of Manchester (United Kingdom).
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