Contract Law Assignment: Case Studies and Problem Questions

This document provides a comprehensive solution to a contract law assignment, addressing two key issues. The first issue concerns whether Fred has a claim against Eric, analyzing the elements of a valid contract, including offer, acceptance, consideration, and intention to create legal relations. It examines the rule of pre-existing duty in the context of a modified agreement. The second issue explores whether Dan can claim the remaining £800 from Charles, again evaluating contract formation and enforceability, focusing on offer, acceptance, consideration, and certainty. The analysis applies legal principles to the given scenarios, citing relevant case law such as Entores Ltd v Miles Far East Corporation, Currie v Misa, Edwards v Skyways, Stilk v Myrick, Harvey v Facey, and Thomas v Thomas, to support the conclusions reached on each issue. The document provides a detailed breakdown of the legal arguments and outcomes, offering a valuable resource for students studying contract law.

Running head: CONTRACT LAW
CONTRACT LAW
Name of the Student
Name of the University
Author Note

1CONTRACT LAW
Question 1
Issue
Whether Fred would have a claim against Eric in relation to the Law of Contract.
Rule
For the purpose of making a valid contract some essential elements need to be fulfilled,
some of them are; The offer and acceptance: As per the English Court’s formal approach an
agreement only exists when there is an unequivocal acceptance against an offer. The general rule
regarding an agreement is that a communication needs to be made by the offeree regarding the
acceptance of the offer, as laid down in the case of Entores Ltd v Miles Far East Corporation1.
Intention to create legal relationship: not all the agreements are legally binding. In order
to make an agreement legally enforceable both of the parties need to have an intention of
creating a legal relationship, in the breach of the contract terms the parties may seek legal
remedies. In Edwards v Skyways2 the agreement was presumed by the court as a legally binding
agreement as the agreement was a commercial agreement and both the parties had intention of
creating a legal relationship.
Certainty: For the enforceability of an agreement the terms of that agreement needs to be
certain in respect of its subject matter, price and the identification of the parties. In Baird Textile
Holdings Ltd v M&S plc3 it was held by the court that a term of any agreement cannot be implied
because of the uncertainty of any product’s quantity and price.
1 [1955] EWCA Civ 3
2 [1964] 1 WLR 349
3 [2001] EWCA Civ 274

2CONTRACT LAW
Consideration: In English law consideration is the additional requirement before the
enforceability of the contract. In Currie v Misa4 it has been held by the court that in order to
enforce any agreement it needs to be proved that something has been brought against anything
which in eye of law has a same value and not necessarily money, it can also be a promise of
undertaking any particular act or of not undertaking the same.
The rule of pre-existing duty is a consideration aspect within the contract law. The
bargains which are supported by any consideration are recognized by the English law and not the
bare promises. This rule applies in case of paying extra. The court held in Stilk v Myrick5 that a
bargain cannot be enforced if the claimant has any pre-existing obligation related to the pre-
existing contract. As an example, Chris entered into an agreement to sell music CDs to Joe in
consideration of $200, but after Joe departed for receiving the CDs, Chris called Joe and asked to
pay extra $50 for the same. This rule would be applicable here so that Joe could agree for the
payment of extra money but refuse to do the same later at the time of delivery.
Application
In this given scenario, Fred was engaged by Eric for building a boat in consideration of a
sum of £10,000 which is payable after the completion of the work, however, after completing
more than a half of work Fred asked for an extra charge of £5,000 on the completion. Which Eric
initially agreed but eventually refused to pay the same after the completion of the work. In this
case, offer has been made by Eric for making a boat to Fred and which was accepted by Fred
thus there is an agreement. This can be supported with the case of Entores Ltd v Miles Far East
Corporation6. A consideration also exists here as both of them agreed to a payment of £10,000
4 [1875] LR 10 Ex 153
5 (1809) 2 Camp 317
6 [1955] EWCA Civ 3

3CONTRACT LAW
on completion of the work. Currie v Misa7 would be appropriate in this situation. Both of them
had the intention of entering into a legal relationship which can be supported with the case of
Edwards v Skyways8. The subject matter of the contract was also not uncertain as they agreed for
a payment of £10,000 after the completion of the building of the boat. The case of Baird Textile
Holdings Ltd v M&S plc9 can be referred in this scenario. Thus, there is a legally binding contract
between Eric and Fred in the first instance.
However, in the second instance the bargain regarding the payment of extra money
cannot be made enforceable because of the rule of pre-existing duty applies here in this scenario
as the bargain was not supported by any consideration but by just a mere promise. This can be
supported with the case of Stilk v Myrick10.
Conclusion
Therefore it can be concluded that Fred would not have a claim against Eric in relation to
the Law of Contract.
Question 2
Issue
Whether Dan could claim the remaining £800 from Charles in respect of the law of
Contract.
7 [1875] LR 10 Ex 153
8 [1964] 1 WLR 349
9 [2001] EWCA Civ 274
10 (1809) 2 Camp 317

4CONTRACT LAW
Rule
A contract would be held enforceable on the completion of all the essential elements of a
valid contract, some of them are; Offer and acceptance: Under the English law of Contract an
agreement would only exists when an offer has been made by one person and subsequently the
same has been accepted by another. The general rule of an agreement states that the offeree
should communicate with the offerer in respect of the offer’s acceptance. The court held in
Harvey v Facey11 that an offeree needs to respond to the offer of the offerer regarding his or her
acceptance.
Intention to create a legal relationship: in order to make an agreement enforceable, both
of the parties need to have an intention of creating a legal relationship. Without the presence of
any intention of creating or entering into a legal relationship, the agreement would cease to be
legally binding. In Esso Petroleum v Customs & Excise12 it was held by the court that an
intention of creating legal relation would lead to the enforceability of the contract.
Consideration: In the law of contract the consideration is related to the bargaining of
contract. A contract is made on the basis of promise’s exchange. The English law of contract
says that consideration should be something which would be in the eye of law, of some value, as
laid down in Thomas v Thomas13.
Certainty: in order to make an agreement enforceable or legally binding, the subject of
the consideration or the terms of the contract must be certain. A contract would cease to be
enforceable if the subject matter of the consideration or the terms of the contract are uncertain.
11 [1893] AC 552
12 [1976] 1 WLR 1
13 (1842) 2 QB 851

5CONTRACT LAW
In Balfour v Balfour14 it was held by the court that the terms of a contract needs to be certain for
making the contract enforceable.
The rule of pre-existing duty is a consideration aspect within the contract law. The
bargains which are supported by any consideration are recognized by the English law and not the
bare promises. This rule is applicable in the cases of paying extra. The bargains which are
supported by any consideration are recognized by the English law and not the bare promises.
This rule applies in case of paying extra. It has been declared by the rule that a pre-existing
duty’s performance would not be amounting to a good consideration for supporting any valid
contract. The court held in Stilk v Myrick15 that a bargain cannot be enforced if the claimant has
any pre-existing obligation related to the pre-existing contract. It has been declared in the case of
Currie v Misa16 that any consideration comprises any of the matters of negative and positive
related to interest, right, benefit or forbearance, loss and detriment.
Application
In this given scenario, Charles borrowed £2,000 from Dan during his time of financial
difficulties. It was agreed by both of them that a discount £800 would be given to Charles by
Dan. Charles had the obligation of paying £1,200 to Dan which was performed by Charles. After
six weeks of repaying the amount Dan asked Charles to immediately return the remaining £800.
In this case an offer has been made by Dan to Charles for paying the amount of £1,200
after deducting the discount of £800, which has been subsequently accepted by Charles. Thus
they have entered into an agreement. This can be supported with the case of Harvey v Facey17.
14 [1919] 2 KB 571
15 (1809) 2 Camp 317
16 (1875) LR 10 Ex 153
17 [1893] AC 552

6CONTRACT LAW
There exists a consideration too in this case as Dan offered to give a discount of £800 to Charles
on the payment of the remaining money. The case of Thomas v Thomas18 can be referred in this
scenario. Both of the parties also had the intention of creating or entering into a legal
relationship, thus, the agreement can be held legally binding and hence, legally enforceable,
which can be supported with the case of Esso Petroleum v Customs & Excise19. The term of the
agreement was also certain as it was clearly stated by Dan that he would give an off of £800 to
Charles. This can be supported with the case of Balfour v Balfour20. Thus, in the first instance
there exists a legally binding contract between Dan and Charles.
However, in the second instance, there is no existence of any legally enforceable contract
as Charles has performed his pre-existing duties or obligations of the contract. He has paid the
remaining amount of £1,200 to Dan. Thus, due to the application of the rule of pre-exiting duties,
Dan would not be able to claim the remaining £800 amount from Charles. The case of Stilk v
Myrick21 can be referred here in this scenario.
Conclusion
Therefore, it concludes that, Dan could not claim the remaining £800 from Charles in
respect of the law of Contract.
18 (1842) 2 QB 851
19 [1976] 1 WLR 1
20 [1919] 2 KB 571
21 (1809) 2 Camp 317

7CONTRACT LAW
Reference
Baird Textile Holdings Ltd v M&S plc [2001] EWCA Civ 274
Balfour v Balfour [1919] 2 KB 571
Currie v Misa (1875) LR 10 Ex 153
Edwards v Skyways [1964] 1 WLR 349
Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3
Esso Petroleum v Customs & Excise [1976] 1 WLR 1
Harvey v Facey [1893] AC 552
Stilk v Myrick (1809) 2 Camp 317
Thomas v Thomas (1842) 2 QB 851