ASSESSMENT: Assessment One – Re- sit
MODULE TITLE: Law of Obligations One (Foundations of Contract Law)
NOTES FOR STUDENTS
Assessment Rationale
This assessment allows you to demonstrate your ability in the following learning outcomes:
• to identify and explain the fundamental principles of the law of contract and apply them to realistic problem based scenarios;
• to organise and present written work in a logical coherent manner.
Marking Scheme / Assessment Criteria
Assessment Criteria:
In providing an answer to the problem you will be assessed according to the following criteria:
• Accurate explanation of relevant legal principles relating to the facts of the problem, identifying any grey areas (where relevant and appropriate);
• Support of explanation of legal principles with use of relevant authorities (judicial, legislative or other – as appropriate) which have been accurately cited and referenced;
• Provision of clear evidence of research and wider reading beyond lectures and workshop activities.
Instructions for completion and submission of assessment
Submission of your assessment must satisfy University regulations. In particular, you must submit your assessment in accordance with the following requirements:
• Cite case and other sources used using the OSCOLA referencing system http://denning.law.ox.ac.uk/published/oscola_2006.pdf;
• please do not put the assessment into any packaging – this will be removed
If you are not able to submit your assessment in person, you are responsible for ensuring that it is posted on or before the submission date. In these circumstances you should obtain proof of posting.
ASSESSMENT ONE QUESTION:
PLEASE READ THESE INSTRUCTIONS CAREFULLY.
You are a trainee solicitor working for Hatchetts Solicitors Leeds.
The Senior Partner, Mr Hulme, provides you with an attendance note and an advice prepared by another trainee. Mr Hulme is not happy with the advice as it has numerous errors which include spelling mistakes, incorrect citation of cases, concepts of law not fully explained or incorrectly defined.
Mr Hulme ask you to do the following:
1. Read through the attendance note and advice below.
2. Copy the advice onto a new word document and make all necessary corrections by using the track change facility on your computer.
ATTENDANCE NOTE
Attending Olivia 20 February 2015
As a surprise for her sister Amy’s wedding, Olivia wanted to organise a horse drawn carriage.
Olivia contacted Dream Rentals and contracted to hire a horse drawn carriage from them for the day of the wedding for £3,000.
A week before the wedding ‘Dream Rentals’ contacted Olivia and told her that due to an increase in the cost of animal feed they could only supply the horse drawn carriage at a cost of £3,500 and unless Olivia agreed to pay the extra they would be unable to provide the horse drawn carriage. Under pressure due to the impending wedding, Olivia agreed to pay this amount.
Amy loved the horse drawn carriage. However Olivia had spent a lot of money on her own outfit and wedding gifts. When presented with the bill for £3,500 from ‘Dream Rentals’ she paid £2,500 only saying this was all she could afford. ‘Dream Rentals’ reluctantly accepted.
Olivia also wanted to hire a magician for the wedding reception to entertain the guests at their tables. She did not have much spare money but remembered that a friend, Zane, was a magician and he owed her £300.
Olivia suggested to Zane that in return for the money she was owed by Zane she would be happy if he was the magician at her sister’s wedding reception. However after the reception Olivia was not happy with Zane’s choice of magic
tricks and discovered Zane would only have charged £150 for the evening. She threatened him with court proceedings if he did not pay the remaining £150 which Olivia felt she was still owed.
Dream Rentals have also now contacted Olivia to say she still owes them money as £2,500 was not full payment. Olivia is seeking advice as to whether Dream Rentals can recover the balance of the monies they believe she owes them and whether she can pursue her claim for the £150 against Zane.
ADVICE PROVIDED
In order to advice Olivia it is necessary to explain considiration in a contract, part payment of a debt and the doctrine of promisory estopel.
There are numerus definitions of consideration, one being the price for which the promise of the other is bought . Another is ‘A valuable consideration, in the sense of law, may consist either in some benefit, profit, interest or right accruing to the one party or some forebearance, detriment, responsibility or loss, given, suffered or undertaken by the other’
In relation to Dream Rentals’ contact with Olivia the terms of the contract are that in return for Dream Rentals providing a horse drawn carriage for the wedding Olivia will pay £3,500. This is a binding contract as all the essential requirements of a contract are present namely offer, acceptance, consideration and relations. The issue in this advice relates to consideration.
However Dream Rentals then approach Olivia and seek to change the contract by increasing the cost of the horse drawn carriage to £3,500 to which Olivia willingly agrees.
It must be considered whether this is a new binding agrement and whether the variety of the price is supported by consideration. ‘Sufficient does mean that consideration needs to be adequate…’ Here the issue is whether the consideration is sufficient. If one party merely performs an existing contractual duty in return for a promise then consideration is sufficient.
Here it would appear that Dream Rentals are not merely performing an existing contractual duty to provide a horse drawn carriage and that Olivia is paying extra for this. Olivia does receive a benefit for the extra payment that she has agreed to make. Her promise to pay extra is binding as it is supported by sufficient consideration by Dream Rentals.
If however it can be shown that the promise was freely made and that Olivia was receiving a defective benefit, or obviously a disbenefit, for the extra payment she agreed to make, the agreement will not be supported by consideration and will be binding. This principle will not apply here as the promise of extra payment was freely given. It was suggested by Dream Rentals rather than offered by Olivia, so Olivia only owes Dream Rentals £3,000 as originally agreed.
If Dream Rentals had agreed to exceed their public duty in return for extra payment then the agreement would be binding as it would be supported by consideration.
After the party Olivia tells Dream Rentals that she will only pay £2,500. Dream Rentals agree to accept this figure in settlement of the debt of £3,000. Olivia only pays all of the debt. ‘Payment of a lesser sum on the day in satisfraction of a greater sum can be any satisfaction for the whole. The rule in Pinnels case states that debts are not payable in full unless consideration is given, i.e. payment in a different fine, at an earlier time, at a different plate if at the debtor’s request. Here Olivia has paid a greater amount in satisfaction of a lesser amount and Dream Rentals do not appear to have received any benefit. Under the rule in Pinel’s Case the balance of the debt remains due i.e. £500 as Dream Rentals’ promise to accept less in satisfaction of the debt was supported by consideration.
Dreamy Rentals should not try to claim the balance of the monies from Olivia but she may seek to use the defence of pramissory estoppel. Promissory esoppel can only be used as a defence to a cause of action. It can only be used as a shield not a spade.
Promissory estoppel can be used as a defense, “If one party, by his words, leads another to agree that the strict rights arising under the contract will be insisted upon, intending that the other should follow on that belief, and he does act on it, then the first party will afterwards not be allowed to insist on the strict legal rights when it would be equitable for him to do so”
On the basis of the criteria as set out above, Dream Rentals has agreed to enforce its strict legal rights, it has agreed to accept more. However, the promise was given freely by Dream Rentals, it was given reluctantly, believing that it had better accept this as it would be likely to receive any more, therefore it would not be equitable for Dream Rentals to go back on its promise.
Olivia would therefore be able to successfully plead promissory estoppel as duress to a claim for the balance of the monies which Dream Rentals say are due.
The advice to Olivia therefore is that Dream Rentals will not be able to claim the balance of the monies due, i.e. £1,000.
In relation to Zane, he owes Olivia £300. Zane agreed to perform in return for not having to pay the £300. Olivia should be advised whether this is not a building contract supported by consideration
Zane owes a debt to Olivia and under the rule in Pinnel’s Case, as described above, if a debt is being paid later, at a differing time or sum at the request of the debtor this can be sufficient consideration. Here Olivia is requesting Zane to repay his debt in a differing place i.e. by performing for the evening.
Adequately of consideration means that what is offered is a change for a promise must have an economic value but that the value of the promise does not have to be equal. “A contracting party cannot stipulate for what consideration he chooses. A peppercan does not cease to be good consideration if it is established that the promisor does like pepper and will throw away the can.”
Therefore it does matter that Zane would only have charged £150, whereas he owes Olivia £300, as consideration must be sufficient but does also need to be adequate.
FEEDBACK
Date generic feedback will be available:
30th April 2015
How generic feedback will be returned to you: Posted on MyBeckett/Blackboard
Date provisional mark will be available
30th April 2015
How provisional marks will be returned to you: Posted on MyBeckett/Blackboard
Date individual feedback will available
30th April 2015
How individual feedback will be returned to you: Written and appointment with workshop tutor if requested
