Contract Law Report: Examining Samson and Tara's Contractual Issues

This report analyzes a contract law case involving Samson, a supplier, and Tara, a buyer, who entered into an oral contract for the delivery of candles. Samson faces unforeseen circumstances, including a minor heart attack and a significant rise in petrol prices, leading him to seek modifications to the original contract terms. The report explores the legal issues surrounding contract modification, particularly the enforceability of oral modifications and the remedies available to Tara if she does not accept the proposed changes. It examines the applicability of contract law principles, including offer, acceptance, consideration, and intent to create legal relations. The report delves into the doctrine of frustration, considering whether the unforeseen events render the contract impossible to perform. It also discusses relevant case law, such as Taylor v. Caldwell, to illustrate the application of legal principles in similar situations. The report concludes by assessing the validity of Samson's actions and Tara's options in light of the contract law principles discussed.

CONTRACT
LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
ISSUES............................................................................................................................................1
APPLICABILITY OF LAW ...........................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................7

INTRODUCTION
Contract is an agreement between two or more parties. A legally binding contract is a
voluntary agreement between two parties and enforceable by law. Contacts are formed on daily
basis by everyone and it begins with an “offer”. When money is offered in exchange of goods
then it is termed as contract. Both the parties shows their willingness to agree on terms between
parties (Peel, 2015). An offer can be accepted or counter offer can be made instead of
acceptance. In this project report detail discussion regarding contract and modification in
contract terms will be done. Relevant cases and laws related to contractual agreements will be
discussed. Besides this, the report briefly explains the terms and conditions regarding the
creation of new changes in the terms and condition of the original contract.
ISSUES
In this given case supplier Samson agrees to make delivery of candles to Tara for pre
Christmas trade an with amount of £ 1,000. Samson fails to make delivery as he had a minor
heart attack and also petrol prices goes up to 300%, because of international events. Now to
make delivery of candles Samson wants to modify contract by rising contract price to £3000 and
reducing delivery by 40%. Samson also adds that if these adjustments are not made in contract
then delivery can not be made by him. This case deals with modification in terms of contract on
which both parties agreed before. Major issue that needs to be discussed in this case is whether
Samson can make these variations orally in an oral contract or not. Delay in delivery of candles
is because of a minor attack to Samson and during that phase price of petrol moves up
unexpectedly. Explantation must be made whether Samson can make these changes to contract
or not and what are the remedies available to Tara if she does not accept these changes. As Tara
finds no way out and reluctantly agrees to this changes.
LAWS
Contract is a legally binding promise( written or oral ) by one party to fulfil an obligation
to another party for consideration. A contract has four elements : offer, acceptance, consideration
and intent to create legal relations. A contract is just an offer in the beginning but after its
acceptance it becomes a contract which is legally enforceable. To make a contract valid all four
elements must be fulfilled that means a proper offer must be made. And acceptance of offer
should be voluntary and not by any influence or misleading information(McKendrick, 2014).
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Consideration is something in return for which contract is performed and it should be justifiable.
A contract must gives legal right to sue when any breach is taken place.
In our case Samson made a proper offer to Tara and voluntary acceptance is given by
Tara for this offer. Consideration for candles is £1,000 which is justifiable and accepted by both
the parties. Any breach in the contract by Samson due to unforeseen rise in petrol price by 300%
and also a small heart attack was faced by Samson. As it can be seen in given case that Samson
did not performed contract but it was not intentional because rise in petrol prices and that to
300% was a sudden change. When a contract is not performed because of sudden and
unpredictable change that makes it impossible to perform or requires changes in terms to
perform. Contract law specify rules and regulations that required to be followed to to make these
changes and also type of changes that can be made to contract.
Most jurisdiction hold that parties to a contract can make modification to contract using
same formalities required to enforce contract. When a contract modification requires
consideration, it depends on whether contract is for sale of goods or under common law.
Uniform Commercial Code allows modification of contract with consideration to support the
modification that has been agreed by both the parties. Modification in a contract can be whole or
in part of the terms of the contract. It is done by considering the needs of both the parties.
Modification can be done either before signing of contract or after the execution of the
contract. It is mandatory for the parties to give their acceptance to the changes made in the
terms of contract(Knapp, Crystal and Prince, 2016). Non acceptance to the changes renders the
contract invalid, thus, can not be enforceable by law.
Modification of a contract can be done for various reasons. Some of the reasons are as
follows-
 For extension of contract: when due to some reasons the duration of an existing contract
can be extended with the help of the Contract Extension Agreement. This create the
whole new contract with the Contract Extension Agreement ass if the contract is about
the end and the parties decides to extend the contract beyond the original expiry date. Or
if the parties of the contract wants to terminate the real date and wants to make some
changes in the original contract. This increase the duration of the contract and the
agreement of extension of contract or the new agreement of contract pertains the effective
date of extension agreement, along with the details like name and address of the parties
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who are involved in the contract the expiry date of original contract and the date of
extension( Bridge, 2017). Besides this, many amendments to any provisions of the
original document are also pertain in agreement of extension of contract.
 For modification of the duration of contract: the modification regarding the duration
of the contract is also done by making the agreement of extension of contract as this
agreement comprises with the several terms and conditions regarding the extension and
the modification of the existing contract or the terminology set up by the parties who are
involved in the contract, also comprises in the new agreement for extension of contract or
in new contract agreement. It does not means the new contract, it means the modification
in some critical terms and condition of the original contract. But the formation of new
contract agreement can only be formed on the basis of opinion and commitment of all
parties who are involved in the original contract(Poole, 2016). Moreover, the
Modification in a contract may be entire or in part of the terms and condition s of the
contract. modification is made due to the happening of any unfavourable events or with
the consideration of all the parties involved in it, consideration must involves the needs
of both the parties. Modification can be done either before signing of contract or after the
execution of the contract. It is mandatory for the parties to give their acceptance to the
changes made in the terms of contract.
 To modify the quantity mentioned in the contract: sometimes it becomes necessary
due to occurrence of some unfavourable events or ordeals, to make some modifications
in the existing or original contract. The modification refers to creation of some new
changes in terminology or the terms and conditions of the existing contract only if the all
parties of the contract are agreed on the changes in terms and conditions of the contract.
For modifying the contract it is essential in order to makes the changes by forming the
new agreement for the original contract with relevant modifications. This leads to the
continuation of existing contract or original contract with new agreement which consists
modification regarding some terms and conditions( Maine and Scala, 2017). The
formation of new contract for the modification are beneficial in preventing the cases of
breach of contract.
 To add or subtract any goods in the contract: In order to add or deduct any kind of
goods form the specified details of goods. It means the making the modification
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regarding the ordered menu of goods or items it is not essential to terminate the existing
in order to make a new contract. It is possible to make the changes in the existing contract
by forming the new agreement of contract with new ordering menu and it is easy to form
the a new agreement for the existing or original contract. So in order to make the
changes regarding adding or deducting the goods from the contract agreement it
becomes necessary to form a new agreement for the original contract(Hunter, 2017).
 To alter terms viz. payment, delivery or receipt: In order to alter the terms such as
payment mode or timing, delivery or receipt of the contract. Regarding these kinds of
changes it is essential to make the new agreement for the original or existing instead of
making the new contract after breaching the original contract or existing
contract(Adriaanse, 2016).
a contract can be modified for reasons that are not mentioned above.
A contract requires consideration for modification but there are certain expectation to this-
 Unforeseen difficulties causes both parties to seek modification and modification is fair
and equitable under the circumstances,
 In the cases of promissory estoppel. Promissory estoppel means a promise which is
enforceable by law even when there is no formal consideration.
If a contract contains words or clause that restricts further modification of contract in
future then such contract can not be modified provided the terms are not unfair or illegal.
Contract following under modification can not be modified orally and UCC requires that
if modification is done because any of given two situations then it must be in written. It is a
provision of contract law that modification in contract are ineffective unless provided in writing
and signed by both the parties. This is considered as variation clause, and prevent one party from
any oral modification without any consent (Posner, 2014)). However a written agreement can be
changed by subsequent mutual agreement between parties, whether oral or written.
Before introduction of doctrine of frustration a contract always need to be performed no
matter haw hard it is to perform that contract. But doctrine of frustration is introduced in 19 th
century, which held that a contract which becomes impossible to perform would be frustrated
and automatically comes to an end.
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APPLICABILITY OF LAW
Contract between Samson and Tara is a valid oral contract as both the parties are agree to
enter into that contract. Consent of Tara to enter into this contract was free and not influenced by
any misleading information. Samson was not able to perform this contract due to minor heart
attack and this leads to delay in contract. This delay causes rise in price of petrol by 300% and
Samson finds it difficult to perform.
Doctrine of frustration is applicable when it become impossible to perform this contract.
Situations in which it becomes impossible to perform contract are war brakes out and
government put ban on trade or purpose for which contract is entered is destroyed. Frustration is
also when a contract becomes impossible to perform because of change in law. Every contract is
formed under the assumption that it is possible to perform that contract. A contract can not be
treated as frustrated if it becomes hard to perform that contract(Lan, Pickles and Zhu, 2015)
In “ Taylor V Caldwell Blackburn J” Case issue was that venue where an event was about
to held is burnt down unexpectedly. Taylor who had planned to organise event at music hall of
Caldwell become unsuccessful in his planning. As before this event took place music hall
encountered with fire accident. Taylor demanded for compensation for damages that is caused
because of non performance of event. A case was filled in court and decision is held that, if a
contract is not performed because it has become impossible to perform that contract. Doctrine of
frustration is applied and Caldwell was not liable to pay any compensation because if doctrine of
frustration is applied then contract comes to an end.
As per this case law it is clear that a situation which makes it impossible to perform a
contract needs to be created to apply doctrine of frustration. In another case “ Davies contractor
V Fareham UDC “ Davies agrees with Fareham to construct 28 houses within 8 months for
£92,425. But construction took 22 months due to shortage of labour and material with Davies. It
cost £1,15,223 to construct these houses and Davies submitted that contracted was frustrated,
void and therefore they were entitled for more amount as per work done.
House of lords held that although performance of contract become more onerous but it is
not frustrated. Reid argued that frustration is applied when unforeseeable event took place and
make it impossible to perform contract. When certain changes and contractual obligation become
incapable of being performed and no party to contract is responsible for this change. Frustration
is created in performance of the contract(Gutman, 2014). Shortage of labour and material supply
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make it difficult to perform contract on time but it was not impossible to remark as contract
create frustration. Fact of the case was that a contract which becomes more difficult to perform
or less profitable is not sufficient reason to render it as frustration in contract. As it was still
possible to perform that contract.
In Condor v Baron Knights a sixteen years old agreed to play drums for defendant band
for 7 nights per week till five years. This was a contract to perform continuous service till five
years. But that 16 year old suffered a mental breakdown and prescribed by doctor to perform for
only four days in a week. Now considering mental health issue and performing only four times in
a year will lead to breach in contract by 16 year old. As per contact act a minor can enter into
contractual agreement only to satisfy basic needs such as food, medicines, cloths and house. Due
to non permanence for band for seven days in a week, band dismissed him. He brought a claim
for this wrongful dismissal. As his claim for this dismissal was unsuccessful because medical
condition made it impossible to perform that contract. Doctrine of frustration is created in this
situation as it become impossible to perform this contract. And when a contract become
frustrated then both the parties are released from terms and conditions of that contract. Action
taken by band to dismiss him is justifiable according to law(Stoneand Devenney, 2017).
In this given case of Samson and Tara, Samson took more time to perform contract
because of heart attack and meanwhile petrol prices goes high. This puts Samson in a situation
which makes it difficult and less profitable to perform that contract. This whole situation is
created because Samson was not able to perform contract on time. Situation of frustration is not
created as it was possible to perform the contract by Samson. Demand of Samson to increase
consideration and reduce quantity of supply is quite unreasonable. Tara agreed to this variation
in contract as she finds no way out at this stage.
Instead of accepting variation that are made orally by Samson to the contract Tara should
be aware about contract act and rules and regulations regarding variation in contract. As Samson
said that it is not possible to perform contract on agreed terms which was not right. Tara must
confront him as doctrine of frustration is not created on Samson as performing contract has
become less profitable (Hughes, Champion and Murdoch, 2015). This is because delay in
performance of contract is done by Samson only and now he cannot plead on increased prices of
petrol due to this international events. Statement of Samson ' what we agreed can't be done ' is
not acceptable as situation of creating frustration is not created by this.
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As per law a contract which involves variations that are communicated orally are not
binding on both the parties as variations are accepted when provided in written and signed.
Contract between Samson and Tara was an oral contract and to make variation in this contract by
any party variations must be present in written form. Samson communicated variations to Tara
orally which is not acceptable as law to make variations is not followed by Samson.
CONCLUSION
On the basis of above report it has been concluded that both parties shows their
willingness to agree on terms between parties. As the above case scenario depicts the needs of
both the parties and the report clarifies the issues as well as the laws which regulates and settles
these kinds of matters in context of the formation and completion of the contract. An offer can be
accepted or counter offer can be made instead of acceptance. In this project report detail above
discussion regarding contract and modification in contract terms made in effective manner.
Besides this all, the laws and regulatory section of laws which settles and regulates the contract
are also described accordance with the relevant cases. laws related to contractual agreements
supports the statements given above as the prominent solutions for the issues.
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REFERENCES
Books and journals
Peel, E., 2015. Treitel on the Law of Contract (Vol. 414). London: Sweet & maxwell.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Knapp, C.L., Crystal, N.M. and Prince, H.G., 2016. Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
Bridge, M.G., 2017. The international sale of goods. Oxford University Press.
Poole, J., 2016. Textbook on contract law. Oxford University Press.
Adriaanse, M.J., 2016. Construction contract law. Macmillan International Higher Education.
Hunter, H., 2017. Modern Law of Contracts.
Maine, H.S. and Scala, D.J., 2017. Ancient law. Routledge.
Lan, T., Pickles, J. and Zhu, S., 2015. State regulation, economic reform and worker rights: The
contingent effects of China’s labour contract law. Journal of Contemporary Asia, 45(2),
pp.266-293.
Gutman, K., 2014. The Constitutional Foundations of European Contract Law: A Comparative
Analysis. Oxford University Press.
Stone, R. and Devenney, J., 2017. The modern law of contract. Routledge.
Hughes, W., Champion, R. and Murdoch, J., 2015. Construction contracts: law and management.
Routledge.
Posner, R.A., 2014. Economic analysis of law. Wolters Kluwer Law & Business.
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