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- Contract Law Cases
Charlie v. Best Bargain
Will Charlie prevail against Best Bargain Stores after he was denied a General Electric Smart Front Load Washer for $1.00 that was advertised?
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Rule of Law
Advertisements made to the public normally do not amount to an offer but are considered as an invitation to create an offer. However, if the advertisement is specific and directly promises a reward when a person fulfils some terms, it constitutes an offer. An offer can be revoked any time before it is accepted as it was in Routledge v. Grant (1828). In unilateral contracts, there is no pressure put on the party performing the action.
The ruling in Gunthing v. Lynn (1831) reveals that a contract cannot exist when the offer is evidently unclear (Beale et al. 17). Best Bargain Stores clearly published an advertisement where they indicated that they would be rewarding customers with General Electric Smart Front Load Washer on first-come basis. The store’s advertisement presented an offer and promised a reward for anyone who fulfils the terms. Charlie will prevail in this case against Best Bargain Stores since he realized all the conditions inherent in the advertisement. The case of Charlie v. Best Bargain Stores is an instance of unilateral contract. The store promised a $1 price to the first customers that came that Saturday morning before 9am.
In a unilateral contract, the offeror promises a reward when the offeree fulfils an act and the right to communicate acceptance is surrendered. Best Bargain Stores’ advertisement was an offer to enter into a unilateral contract, and one of its terms was not to bring it along during the purchase. There was no need or space to negotiate since the offeror and the offeree were clear on what their contractual responsibilities were. Thus, if the offeree fulfills all the specific terms of the advertisement, he or she are legally entitled for the reward indicated. In Routledge v. Grant (1828), the offeror revoked his offer before the time he had set for the offeree elapsed (Beale et al. 23).
In unilateral contracts, there is no pressure put on the party performing the action. In the case in question, Best Bargain Stores revoked the offer when Charlie had already commenced the performance. He completed his part of the bargain of $1.00 bill, which signified acceptance. Furthermore, an intention to withdraw an advertisement does not constitute withdrawal in itself. For a revocation to take effect, the offeree has to receive it. The advertisement that Best Bargain Stores published was to the public, and a similar publicity has to be assigned to the revocation as to the advert. When the same publicity is provided to the revocation as to the offer, it is terminated irrespective of whether someone saw it or not. The major task is to determine when acceptance happened, so that the offeree knows when he or she is needed to complete the contract and due for the reward.
Best Bargain Stores is liable since they made an offer that was accepted by the offeree, which constituted a valid contract.
Nursing Home v. Paul
If the nursing home wants Paul to pay for the Bill of Max’s Care, will they succeed and will Paul be responsible?
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Rule of Law
In a contract law, a valuable consideration comprises of profit, right, interest or benefit added to the one party, or some restrain. Also, consideration can be traced by examining responsibility of low incurred, offered or undertaken by others. A recognizable agreement is when parties sign a document that contains agreed terms or either of them suggesting an offer by words or conduct, which the other party in the contract accepts.
In response to the case of Paul, his father Max, and nursing home, it can be established whether the engagement was a contract or otherwise. Consideration is one of the contract basics that could help in determining if the nursing home will be able to collect its bills for Max’s care from Paul. Consideration is defined as an exchange involving parties, which is advantageous to one party, but disadvantageous to the other (Beale et al. 15). With such a framework, the obligation of Paul for Max’s care can be put into perspective to know whether it is legally binding or not. Therefore, a legal contract only exists when consideration is established by way of an advantage received or loss incurred by each of the parties.
Another lens of examining the case is to determine an agreement when an offer is made and accepted. Normally, acceptance occurs at the time when the promise is made. An exception occurs when it is a unilateral contract where the contract is assumed when the receiver of it begins to act in manner that makes him or her deemed for the reward (Beale et al. 18). In the case of Paul and the nursing home, acceptance took place when Paul expressed that he would pay for the costs of his father’s nursing home if his father could not. There are cases where a person uses a language of offer but does not explicitly express a genuine readiness to be liable. Max signed an agreement that he would pay all the costs of his own care and in the presence of the nursing home administrator. In the same meeting, Paul also admitted that he would pay the costs if his father could not. In this circumstance, Paul’s words would be reasonably taken seriously and be deemed legally binding. In that way, the nursing home will be able to collect its bills for Max’s care from Paul.
Intention to make a legally binding contract is also a factor to decide whether a contract is binding or not. A genuine offer which is recognized may not automatically constitute a legally enforceable contract (Beale et al. 27). The agreement must be verified that it was intended to form legal accountability which is enforceable in the courts and not just moral duty. Thus, considering the aspect of intention, Paul made this explicitly clear that he will be obligated to settle the costs if the father defaulted. With the intention that Paul expressed, the nursing home could hold him responsible for the costs of services that the father received after the second month. The intention of the offer is of significance when determining a contract that is binding and holding the other party in the contract responsible.
Paul is liable and had intended to pay bills for Max’s care. Therefore, he is accountable and the nursing home could retrieve the costs incurred on Max after the second month.
Reliabuild v. Bill
If Reliabuild claims the $350,000 from Bill as damages for breach of contract, Will Bill succeed in his defense?
Rule of Law
Mistakes in contract law occur when there is an inaccurate understanding by one or more parties to a contract and could be significant as a basis to cancel an agreement.
A mistake at common law, sometimes called a common initial mistake, occurs when both parties make a similar errormistake that influences the grounds of the agreement and a core aspect of the contract. The common initial mistake takes three forms: mistake as to the existence of subject matter (res extincta), mistake as to title and mistake as to the quality of the subject matter of the contract. The most relatable of the three types of the common initial mistake to the case in discussion is the onemistake as to the quality of subject matter (Beale et al. 33). Such a form of common mistakes implies that the contract can be considered null if the subject matter of the contract in real sense does not give quality as anticipated by those involved in the contract.
A mistake as to the quality of the subject matter is strongly related to Reliabuild and Bill scenario. During the period of the contract, Bill proposed his cost of $550,000 mistakenly, which became the agreed price. However, when he realized that he just made an error and going ahead with the contract would cause a loss of $250,000 to his business, he terminated it. Bill can have a defense to the extent that he was not deceptive in his bid as he noted his error. As much as the contract could be held as not void, and only a mistake as to quality was committed, the contract could still be validated and binds Bill. The case of Bill and Reliabuild resembles Oscar Chess Ltd v. Williams’ one where the contract was not considered void (Beale et al. 33). The case was void even if it was established that because of the age of the vehicle more cash could have been received from the contracting party.
The compensation Reliabuild could claim as a result of Bill breaching the contract could also be considered by calculating of loss on the basis of reliance. Reliance loss occurs if the claimant is restored to the state he would have been had the contract not made (Beale et al. 33). It could be by giving the claimant the compensation of the loss due to him or her because of the breach. Reliabuild relied on the services of Bill to accomplish the project they wanted to do. Reliabuild ended up contracting other bidders and he was obliged to pay $350,000 more than it was originally expected because of the withdrawal of Bill. Reliabuild had calculated its own bid based on the figure that Bill gave them.
The case is also similar to Anglia Television Ltd v. Reed where one person joined a contract with the plaintiff, and he later left the entire project (Beale et al. 40). The plaintiffs had no option but to find another service provider, which led to extra costs. The plaintiffs made a claim on what was lost when the actor left the project, instead of suing on expectation loses. Reliabuild could also place its claim under loss of bargain. In this claim, the injured party should prove the value that has probably been lost, which Reliabuild can evidently do. Compensation for the losses is determined by the position of the parties in causing the damages that were experienced in the contractual relationship.
Reliabuild should be compensated by Bill for the loss of $250,000, because Bill withdrew from the project after he was contracted.
Beale, Hugh, et al. “Cases, Materials and Text on Contract Law.” Bloomsbury Publishing, 2019.