Following the facts as presented in the case scenario, it is quite clear that the engagement between Robert and Julie is an attempt to enter into a contractual relationship. However, there are laid down elements of a valid contract that must be shown to exist for their contract to be enforceable in law. If both Robert and Julie can contract as required by law, their contract will be valid and enforceable only if the following elements are shown to exist: offer, acceptance, and consideration (Galaty, et al.,2001). Other relevant elements of a valid contract are the intention to be bound by the contract and the meeting of the minds (consensus ad idem) between the contracting parties (Koffman and Macdonald,2010).
In the present case, Julie makes an initial offer to Robert. This is deduced from the following passage. ‘Robert, one of the company’s property managers, was approached by his cousin Julie, who said she was selling her van and Robert could buy it for £3,000.’’ Consequently, Robert is required to accept the offer and communicate acceptance at a specific day and time as seen in the following passage. ‘‘Julie said Robert had to ring and speak to her on her home telephone in person before 10 a.m. on Saturday if he wanted it.’’ It is however noted that Robert never accepts the offer with the terms provided by Julie but instead makes a new offer expecting Julie to accept it. This fact is disclosed in the following passage. ‘‘After thinking it over Robert sent a text message to Julie’s mobile phone on Saturday morning saying he would pay £2,500 for the van and added: ‘If I don’t hear from you I will assume that my offer is acceptable to you and will collect the van on Sunday.
It follows that Julie never responds to the offer and proceeds to sell the van to a friend. She claims she never saw the message sent by Robert. Aggrieved by Julie’s actions, Robert claims that Julie is in breach of contract and demands that she recover the van so that he can buy it.
Having established that an offer is first made by Julie to Robert, we are bound to assess if there is any acceptance. As it has already been established, Robert never accepted the offer but instead made another offer setting new terms. This is in law referred to as a counteroffer. As per the rule in Hyde v Wrench (1840) 49 ER 132, the effect of a counteroffer is that it destroys the original offer(Marks, et al., n.d,1985). It, therefore, becomes unavailable for acceptance and Robert cannot later seek to accept it.
When Robert makes a counteroffer directed to Julie, this means the offer made to him by Julie is not accepted. With regards to the counteroffer made by Robert to Julie, it is disclosed that Julie did not respond to it. Additionally, it is immaterial that Robert included the following text in his offer, ‘‘If I don’t hear from you I will assume that my offer is acceptable to you and will collect the van on Sunday.’’ The general rule in so far as the acceptance of the offer is concerned, is that silence doesn’t amount to acceptance. This rule is underpinned in Felthouse v Bindley [1862] EWHC CP J35. The offer made by Robert to Julie cannot, therefore, be construed as accepted. As is the position in Entorres v Miles Far East [1955] 2 QB 327, acceptance must be communicated to the offeror by the offeree. Even though the courts seem to disregard strict adherence to the above rule by positing that acceptance can be communicated through conduct, such conduct must be able to reflect an acceptance by the offeree. The position that communication of acceptance can be implied by conduct was set in Brogden v. Metropolitan Railway Co. (1877) 2 App. Cas. 666. A similar position was set in Butler Machine Tool v Ex-cell-o Corporation [1979] 1 WLR 401. In the present case, nothing in the conduct of both Robert and Julie can be said to imply acceptance of their respective offers.
Owing to the above, there is no valid contract between them. A valid contract must possess all the elements as discussed above. Where an offer is made, acceptance must take place, and communication made by the offeree to the offeror. In the absence of this, the purported contractual arrangement will be void and therefore unenforceable in law. This is exactly the case in the present case scenario.
Thus, Robert has no course of action as no right or obligation accrues from his arrangements with Julie. It is therefore impracticable to demand that Julie recover the van
so that he can buy it. As far as it is concerned, Julie is not in breach of a contract because it does not exist in the first place. In any case, Robert is just a third party who is not privy to the contract between Julie and her friend to whom the van was sold. Under the law of contract, if you are not privy to the contract you have no right,t to sue and are not liable to be sued as no right or obligation accrues (Davies, 2016).
Question (B)
When Sandra purchases a laser measuring tool from Bob’s builders' shop, a contract of sale of goods comes into existence. By dint of section 2(1) of the Sales of Goods Act, a contract for the sale of goods arises when the seller transfers or agrees to transfer the property in goods to the buyer for a monetary consideration known as the price (Sale of Goods Act 1979). From the facts given, Bob’s builders agree to sell a laser measuring tool to Sandra for £150 ,whose amount is paid. Consequently, a contract for the sale of goods is formed as contemplated in section 2(1) above.
In a contract for the sale of goods, both the seller and the buyer have obligations that abide by all terms of sale including those that are implied by the law (Kelly et al., n.d.). These implied terms are found in various laws am,ong them the Sales of Goods Act, General Product Safety Regulations, and the Consumer Protection Act. These laws safeguard consumers from faulty and dangerous goods sold to them by sellers. Bob’s Builders has inserted an exclusion clause excluding from liability of liability for any injury, loss, or damage whatsoever, howsoever caused by any of its products. This is, however,r, immaterial and cannot exclude them from their duty to sell only those products that are of satisfactory quality, safe, and fit for purpose. The inclusion of the exclusion clause cannot in any way override the requirement of Section 14(2) of the Sale of Goods Act. The Act stipulates that there is an implied term that goods sold to consumers are of satisfactory quality.
Even in light of the above, it is important to note that only parties in a contractual relationship are protected by consumer laws (Yuthayotin, 2015). When a party claims that his/her contractual rights have been aggrieved, a valid contract must first be seen to exist. One must have a basis for rights that the law comes to protect. For Sandra to claim protection under the law of contract, therefore, it must be ascertained that a valid contract for the sale of goods exists between her and Bob’s builders. All the requirements of a valid contract must be present in a contract for the sale of goods. This means that the essential elements of a valid contract namely offer, acceptance, consideration, legality, and capacity must be present.
From the what has been established, a contract for the sale of goods exists between Sandra and Bob’s builders. Thus, as a consumer, she is protected by the law.
When Bob’s builders sell a faulty laser measuring tool to Sandra, there is an infringement of an implied condition. There is an implied condition that goods are of a merchantable quality in every sale of goods contract. This was settled in Bartlett v Sydney Marcus [1965] 1 WLR 1013. A product that is of a merchantable quality is undamaged and of acceptable quality to meet its purpose (White,2011). The consumer protection Act goes a notch high to offer more protection to the consumers. As opposed to the requirement that goods be of merchantable quality, the Act sets the standards for the quality of goods to that of satisfactory goods. It eliminates the burden of consumers to prove fault or negligence when damages are suffered as a result of the bad quality or dangerous goods.
Seeing that Sandra has suffered loss and damages because of poor quality laser’s batteries which explodes while charging in her office, section 14 of the Sale of Goods Act comes into play. This section presents buyers who suffer loss and damages caused by defective goods with a remedy. Section 14(2) stipulates that there is an implied term that goods sold to consumers are of satisfactory quality. In the onset, Bob’s Builders is in breach of the above term provided in law.
Jointly, the Sale of Goods Act, the General Product Safety Regulations and the Consumer Protection Act 1987 plays a major role in protecting UK consumers from businesspersons who faulty and dangerous goods. All these laws do this in a variety of ways and with diverse approaches.
Having stated as above, Sandra is protected by these laws. This is mainly because she is party to a contract. Thus, she has a course breach of an implied term has been committed and is therefore entitled to remedies. The contract between her and Bob’s builders is a contract of sale of goods that satisfy the requirements of section 2(1) of the Sale of Goods Act. The above section describes what a contract for the sale of goods is.
Since there is a breach of an implied term stipulated under section 14(2) of the Sales of Goods Act, Sandra is entitled to remedies.
Since she had already accepted the tool, she can seek for damages. She is entitled to claim damages equivalent to the amount of losses suffered as a result of the explosion of the laser’s battery. Repair or replacement is another remedy available to her. She has the right to ask for repair or replacement from Bob’s builders. Bob’s builders will be expected to repair or replace the tool business within a reasonable time and without causing substantial inconvenience to the Sandra. Finally, Sandra is entitled to a Refund (either partial or full refund). However, the best remedy in the circumstances would be seeking damages for all losses suffered as a result of the defects in the tool.
Question (C)
There are clear rules on the execution of documents during the selling and buying of property. These rules are inscribed in Law of Property (Miscellaneous Provisions) Act 1989. The Law of Property Act 1925 also governs the transfer of interests in land. When Ahmed enters into a contract for buying a rental property in London, he is he is supposed to take due diligence to ensure that the whole transaction is in tandem with the provisions of the relevant laws. When he states that he will not be available to sign the contract manually, his solicitor’s suggestion that he could use an e-signature should be checked against the provisions of the relevant laws. This should apply to both the contract for sale and the transfer deed.
The Court of Appeal in Golden Ocean Group v Salgaocar Mining Industries [2012] EWCA Civ 265 (09 March 2012) confirmed that is not mandatory that a contract is signed for it to be enforceable. Lack of signature cannot be used to defeat enforceability of a contract. It is also not fatal to use e-signatures during the execution of documents, but it should be noted that the law is very particular on the contracts that must be signed, and how they must be signed.
Considering the above, the law makes it mandatory for a contract involving the transfer of interests in land be in writing and fully executed. Only in short-term leases where this requirement does not apply. Section 54(2) of the Law of Property Act 1925 excludes short-term leases from the requirement that contract involving the transfer of interests in land must be in writing. Short-term leases are less than three years. Bearing in mind that Ahmed is not getting into a short-term lease, it is therefore mandatory that the contract be in writing and manually signed. Any document used in the transfer of real property and that which undergoes the process of registration in the Land Registry must be manually signed. The signature should be handwritten. Deed of transfer of title is also one of the documents that must be manually signed. As pertains to the signing of a deed of transfer, section 1 of the Law of Property (Miscellaneous Provisions) Act 1989) expressly provides that for a deed to be valid, it must be signed by the person making it. Signing is by way of making a mark on the document. Section 1(4) of the Law of Property (Miscellaneous Provisions) Act 1989) treats any mark inscribed in the document as a signature. The signature is to be inscribed in the space provided on the deed itself. The signatory should clearly be named, or it is made clear who has inserted the signature in the document.
What should be noted is that the signature should be in ink or some other indelible medium. The idea of Ahmed using an e-signature on the deed of transfer is therefore prohibited and out of the question. The transfer deed must be signed manually. The only exception is when the registrar accepts a discharge by way of forms DS1 or DS3 signed in facsimile. However, the execution of such a discharge must be like that of a deed or be authenticated in a manner recommended and approved by the registrar. The above is provided for under rule 114(3) of the Land Registration Rules 2003.
Having identified, that both the contract and the deed of transfer must be properly executed by way of inscribing a signature in ink, Ahmed must, therefore, drop the option of inserting an e-signature. As long as both documents are presented to the land registry for registration, an e-signature is not acceptable.
In conclusion, section 2 of the contract the Law of Property (Miscellaneous Provisions) Act 1989, sets out the formalities of a contract involving the transfer of interests in land as follows:
The contract must be in writing will all the terms that all the parties are supposed to expressly agreed to. The terms must be contained in a single document. The contract must also be signed by all the parties. As relates to the transfer deed, it must also be in writing and needs to have some evidence in it that shows it is a deed. Thus, a deed must be in writing and should be on the face of it to show clearly that it is purposeful. Thus, the person making it must specifically document it as a deed. It must also be signed by the parties. As stated earlier, signing should be manually done in ink or some indelible medium. The signing must also be attested to. Section 3(1) of the of the Law of Property (Miscellaneous Provisions) Act 1989 requires that each signature is attested to by a witness. Witnesses should record their names and physical address in the process. Finally, the deed must be delivered personally by the executing party. This act is required by section 1(3)(b) of the Act. (The Law of Property (Miscellaneous Provisions) Act 1989). It is significant as the delivering person must in the process expressly or impliedly by way of conduct express their intention to be bound by the deed. Therefore, the requirements that apply to the agreement apply to the deed but the deed has extra requirements that does not apply to the contract.
Seeing the strict requirements of the law, Ahmed must be involved in the process and cannot, therefore, execute the documents electronically.
Question (D)
In every contract, parties are required to give all adequate and truthful representations of the subject matter of the contract. This is in view of ensuring that no misrepresentation that might induce one party into entering a contract that he/she would not have entered should misrepresentation of the information not have been done.
In the present case scenario, Posh properties enters into a contract of purchase of the flats based on the information and the assurances given to them that the occupying tenants are all very good and prompt payers and not in arrears. This information induces them into purchasing the flats only to find out that that two of the tenants are six months in arrears and have a history of not paying their rent on time. The two tenants also disclose Posh Properties that the seller is aware of the rent arrears and their history of late payment.
Owing to the above, there is a misrepresentation of facts by the seller. A misrepresentation has been defined as a false statement of fact or law. A misrepresentation has the effect of inducing the representee to enter into a contract (Chandler,2015). It is usually made during negotiations. A misrepresentation can be innocent, negligent or fraudulent (Latimer,2011). Based on the fact that at the time of entering into a contract the seller had knowledge of the two tenants being in 6 months in arrears and having a bad history of untimely payment of their rent, the only logical conclusion can only be that he made a fraudulent misrepresentation. Lord Herschell in Derry v Peek (1889) 5 T.L.R. 625 defined a fraudulent misrepresentation as a statement made by someone knowing it to be false, without belief in its truth, or made recklessly and carelessly without caring whether it be true or false (E-lawresources.co.uk, 2017).
When it is ascertained that a misrepresentation has been done, the aggrieved party can rescind the contract. A misrepresentation does not invalidate a contract, but a party can seek to set it aside (Jones,2017). Therefore, such a contract is voidable. There are remedies available for a party who suffers damages because of a misrepresentation. The remedies available depend on the type of misrepresentation. Generally, Rescission and damages are the available damages for misrepresentation (Monaghan and Monaghan, 2013). Common law and the Misrepresentation Act 1967 are the regimes governing misrepresentation during contract making.
Seeing that the seller of flats made a fraudulent misrepresentation, the rule in Doyle v Olby [1969] 2 QB 158 will apply. In Doyle above, it was settled that where there has been a fraudulent misrepresentation, the misrepresentee has the right to rescind the contract and claim damages. The damages sought are not so sought on basis contractual principles but rather on the basis of the damages awarded in the tort of deceit. It is not required that damages be foreseeable. The position is also reflected in the decision of the court in Smith New Court Securities v Scrimgeour Vickers [1996] 3 WLR 1051
It is a settled position that a misrepresentation must be a false statement of law or fact. This was the position in Bisset v Wilkinson [1927] AC 177 and Esso Petroleum v Mardon [1976] QB 801.
It would not be enough to claim that a misrepresentation has occurred. The representee must show reliance on the misrepresentation. Only then will there be an inducement to enter a contract.?This was the position of the Court in Horsfall v Thomas [1862] 1 H&C 90. Thus, considering all that is discussed above, Posh properties are entitled to rescind the contract and seek damages for fraudulent misrepresentation by the seller of flats.
Bibliography
Acts of parliament
Law of Property Act 1925
Law of Property (Miscellaneous Provisions) Act 1989
Land Registration Rules 2003
Misrepresentation Act 1967
Case law
Hyde v Wrench (1840) 49 ER 132
Felthouse v Bindley [1862] EWHC CP J35
Entries v Miles Far East [1955] 2 QB 327
Brogden v. Metropolitan Railway Co. (1877) 2 App. Cas. 666
Butler Machine Tool v Ex-cell-o Corporation [1979] 1 WLR 401
Bartlett v Sydney Marcus [1965] 1 WLR 1013
Golden Ocean Group v Salgaocar Mining Industries [2012] EWCA Civ 265 (09 March 2012)
Derry v Peek (1889) 5 T.L.R. 625
Doyle v Olby [1969] 2 QB 158.
Smith New Court Securities v Scrimgeour Vickers [1996] 3 WLR 1051.
Bisset v Wilkinson [1927] AC 177.
Esso Petroleum v Mardon [1976] QB 801.
Horsfall v Thomas [1862] 1 H&C 90.
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Chandler, A. (2015). Law of contract.
Kurer, M. (2002). Warranties and disclaimers: limitation of liability in consumer-related transactions ; [Seminar on Warranties and Disclaimers held within the framework of the 2000 annual conference of the International Bar Association in Amsterdam]. London [u.a.], Kluwer Law International.
Latimer, P. S. (2011). Australian business law 2012. North Ryde, N.S.W., CCH Australia.
Jones, L. (2017). Introduction to business law. Oxford University Press.
Beale, H. G., Bishop, W. D., & Furmston, M. P. (2008). Contract: cases and materials. Oxford, Oxford University Press.
Marks, R. J., Marks, R. J. E., & Jackson, R. (1985). Aspects of civil engineering contract procedure. Oxford, Pergamon.
Monaghan, C. and Monaghan, N. (2013). Beginning contract law. London [u.a.]: Routledge.
