University Law 7: Contract Analysis Assignment - Formation and Breach

This law assignment analyzes a contract between Heavyweight and Foundation. It examines the elements of a valid contract, including intention, offer, and acceptance, using case law such as Balfour v Balfour and Carlill v Carbolic Smoke Ball Co. The assignment determines when the contract is formed, specifically when the Foundation delivers goods and Heavyweight accepts them. It addresses the liability of Foundation for late delivery of pile drivers, considering express and implied terms of the contract, and whether Foundation is liable for a penalty. The analysis concludes that the Foundation is liable for breach of contract due to the late delivery but is not liable for compensation based on the specific contract terms. The document includes a bibliography with website and case law references.

Running Head: Law 1
Law

Law 2
Answer 1
Issue:
At what stage contract is formed between Heavyweight and Foundation?
Law:
For making valid contract, following are the necessary elements of the contract, and these
elements are stated below:
 First element is intention to create legal relations. In case of commercial contract
contracting parties must intended to create legal relations between them. In other words,
parties signed business contracts must enter into binding relations and able to sue other
party if they breach their obligations. This can be understood through case law Balfour v
Balfour [1919] 2 KB 5711.Consideration is the best evidence which is used to clarify that
parties intended to create legal relations.
 Offer is considered as proposal of contract. In other words, it is manifestation by one
party to the other party for the purpose of bound to the offeree in the contract. It must be
noted that offer is completely different from invitation to deal. Invitation to deal give rise
to further negotiations but offer give rise to agreement if it is accepted. This can be
understood through case law Partridge v Crittenden [1968] 1 WLR 1204.2 In this case
Court held that advertisement is not considered as an offer3.
1 Balfour v Balfour [1919] 2 KB 571
2 Partridge v Crittenden [1968] 1 WLR 1204
3 Roebuck, D. & Chui, C. Hong Kong Contracts, <http://lib.hku.hk/Press/9622092896.pdf>,
Accessed on 7th October 2017.

Law 3
 Acceptance is the manifestation by the offeree to bind from the offer given by offeror.
Acceptance is the statement through which offeree accepts the offer made by offeror. For
valid acceptance it is necessary that offer must be communicated. Offere can accept the
offer through his conduct also. This can be understood through case law Brogden v
Metropolitan railway (1877) 2APP Cas666.4
Application:
In the present case, contract between Heavyweight and Foundation is formed when Foundation
delivers the products to the Heavyweight, and Heavyweight keep that product. In this, by
delivering the product foundation gives the offer for entering into contract and by accepting the
delivery of the goods Heavyweight accepts the contract. Both the parties intending to create legal
relations between them because of which there is valid contract between the parties.
Conclusion:
Contract is formed between the parties when goods are accepted by the parties.
Answer 2
Issue:
Whether any liability of Foundations arises because of the lateness of the delivery of pile
drivers?
Law:
4 Brogden v Metropolitan railway (1877) 2APP Cas666.

Law 4
It must be noted that there is no particular form to constitute an offer, and offer can be made in
any form either in oral or written form. However it must be noted that party can also impose
offer through their conduct, but such conduct must be related to the contract. This can be
understood through case law Carlill v Carbolic Smoke Ball Co, Court of Appeal [1893] 1 QB
256; [1892] EWCA Civ 15.
In similar way acceptance can be given in any form either in oral or written form. However
person can accept the offer through his conduct also.
If there is contract than parties who signs the contract are bound with the terms of the contract
whether such terms are express or implied. It must be noted that, express terms are those terms
which are expressly stated in the contract. This can be understood through case law Ellul and
Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia. 6
Application:
In the present case, Foundation does not take any step to clarify the terms stated by Heavyweight
in agreement which confirm the delivery of 3 pile drivers. Late delivery of pile drivers
contravenes the terms which stated the delivery in five weeks. By not delivering the pile drivers
in five weeks foundation contravenes the terms of agreement which cause distress to
Heavyweight because heavyweight wants to use these pile drivers in their project. As stated,
parties who sign the contract are bound with the terms of the contract whether such terms are
express or implied. It must be noted that, express terms are those terms which are expressly
stated in the contract. Breach of express terms can be considered as breach of contract and party
who conduct such breach is liable towards other party.
5 Carlill v Carbolic Smoke Ball Co, Court of Appeal [1893] 1 QB 256; [1892] EWCA Civ 1.
6 Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia.

Law 5
Conclusion:
Therefore, it can be say that Foundation is liable to breach the terms of the contract.
Answer 3
Issue:
Whether it is possible to pay sum of £5m is payable in the situations defined under case law?
Law:
Terms and conditions of the contract are the part which actually defines the present and future
situations, and these terms are binding on the parties. If any party breach any express or implied
term of the contract then such party is liable under the contract to breach the terms of the
contract.
It must be noted that terms are only binding on the parties if both the parties accept the terms of
the contract.
Application:
As stated above, there is contract between the parties parties who sign the contract are bound
with the terms of the contract whether such terms are express or implied. It must be noted that,
express terms are those terms which are expressly stated in the contract. Breach of express terms
can be considered as breach of contract and party who conduct such breach is liable towards
other party.

Law 6
However there is an exception also which states that foundation does not accept the terms and
conditions of the heavyweight which means they are adopting their own terms and conditions.
Provision related to penalty is stated in the terms of heavyweight contract and these terms are not
binding on foundations. As stated above, terms are only binding on the parties if both the parties
accept the terms of the contract.
Conclusion:
Therefore, Foundation is not liable to pay compensation to heavyweight.

Law 7
BIBLIOGRAPHY
Website
Roebuck, D. & Chui, C. Hong Kong Contracts, <http://lib.hku.hk/Press/9622092896.pdf>,
Accessed on 7th October 2017.
Case law
Balfour v Balfour [1919] 2 KB 571.
Partridge v Crittenden [1968] 1 WLR 1204
Brogden v Metropolitan railway (1877) 2APP Cas666.
Carlill v Carbolic Smoke Ball Co, Court of Appeal [1893] 1 QB 256; [1892] EWCA Civ 1.
Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia.

Law 8