Contract Law: GDL June 2022 Exam Question 1 - Zoe's Legal Advice

This assignment analyzes a contract law scenario involving Zoe, who is seeking to purchase a table and later deals with a lost dog incident. The analysis focuses on Zoe's interactions with Maja concerning the table purchase, exploring the elements of offer, acceptance, and potential breach of contract. It also addresses Zoe's agreement with Oscar for shop assistance and her involvement with Callie and Paul regarding the lost dog. The document examines the legal positions of all parties involved, including the implications of communication methods (email and text) and the formation of contracts. Furthermore, the assignment includes the situation of Julie's tenancy agreement with Monika where Julie runs a dance school and gets injured and seeks to negotiate a reduced rent with Monika. Monika also owns a number of properties and is renovating an office building and requires to get the roof of the building fixed, and wants to acquire some office furniture for the office building. The document also explores the principles of contract law, including offer, acceptance, and consideration, and their application to the given facts. The analysis considers the enforceability of agreements and the potential for claims related to breach of contract, providing legal advice for each party involved and contributing to students' understanding of contract law principles.

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ANSWER BOOKLET
GDL: CONTRACT LAW JUNE 2022 EXAM
CANDIDATE NUMBER
(Please add candidate number
eg C 12345678 – also add to top right corner of
Answer Booklet)
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5,200)
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.
You must answer THREE questions out of SIX.
You may refer to your GDL Statutory Extracts.
There is a maximum word limit of 6,000. Words in excess of this limit will not
be marked.
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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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TYPE YOUR ANSWER HERE
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.