TASK 1: CLIENT LETTER
[Hernon Usk & Partners LLP]
[Insert Date]
Mike Collins
Managing Director
Brightlight Designs Ltd
The Priory, Stormer Drive
CV6 7GV
Re: Legal Advice Regarding Contractual Position – Case MC/4013
Dear Mr. Collins,
I believe you are doing fine. After analyzing the documents you have generously shared with me, including the witness statement, the napkin photo, and the witness statement of Mr Alex Carter, I am offering legal advice in the prospect of the probable contractual disagreement with Mr Peter Stevens. This claim and counterclaim concern an event of the offer placed on a napkin when players were playing poker on 10 March 2024. To date, no specific legal action has been taken against you, and I write this letter as a procedure and evidence of your situation and the chances of prosecuting you.
Summary of Facts
From your stated facts and the description by Mr Carter, the circumstances under which the episode occurred were fairly innocuous; it involved a friendly party poker game at Westbrook University. You and a few other classmates were having fun when this new man, Mr. Ryan Moore, came into the game. At that time, you used a piece of napkin and said that you would provide your company and your car to the winner of the particular hand, but with the provision that the individual has to kiss your shoe. This statement, which I remember you crumpling up and throwing in the trash before leaving, is the point of dispute.
Although you cancelled the offer on the napkin by tearing it and saying that it did not exist, Mr Stevens accosted you after the game and asked for the transfer of your company and car. He grabbed the keys to your vehicle when you two got into a fight, and while you tried to fix things by suggesting a new ruling concerning ads for Steven’s business, he says that the napkin agreement is all that rules. The question that arises now is whether the above informal offer could lead to the formation of a legal relation, which is a contract.
Legal Analysis: Was a Contract Formed?
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Offer and Acceptance
A contract starts with an offer that must be specific, unambiguous, unilateral, or bilateral, according to the intention that it will have legal consequences when accepted. Here, a large brown napkin has the words translated as there is an offer on how to transfer your firm and car to the poker hand winner. There is only one condition: The offer should be informal and made in a joking manner. The invitation was given in the course of a game, and it can be assumed that the rather provocative expressions may have been used by the sender precisely because of the game nature of the communication. Referring to the rule in Balfour v Balfour, this essential means that agreements made in the domestic context are not ordinarily assumed to give rise to legally binding relations unless it is clear that they do.[1]
Also, the action that followed soon after the offer, namely, tearing the napkin and calling the deal null and void, is indicative of the fact that the offer could not have been made in earnest. In R v Clarke [1927] 40 CLR 227, it was opined that withdrawal or revocation of the offer may suggest that the offer had no intention of entering into legal relations. Mr Stevens’ continued playing of the game and not insisting on having the company and car immediately also points with the same conviction that he may have been relieved that his offer was not binding.
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Consideration
Another aspect of proposal formation is consideration, whereby each party is expected to contribute something in exchange for another’s promise. It is also not clear what exactly you offer: it may be a mere poker game, and its nature as consideration under the legal rules on contracts is unclear. According to the case of Thomas v Thomas [1842] 2 QB 851, a consideration does not necessarily have to be adequate, but it must be sufficient. Here, the poker game might be analyzed as an example of an exchange, although it is not quite clear whether the game is capable of holding adequate value to enforce a contract based on the subject matter.
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Intention to Create Legal Relations
To make it legal, every contract must be entered into for the purpose of establishing legal relationships. As seen before in the case of Balfour v Balfour, it was decided that where the contract made is at home; in other words, the contract is the family contract they are not intended to be legally enforceable[2] Promises made during a friendly poker game to give your company and car are an excellent example of this principle. Based on the circumstances of the game and your subsequent apology, it would appear that you never had the desire to form a legally binding contract.
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Subsequent Agreement
After the evening of poker, you tried to settle the issue on this occasion over free advertising for Mr. Stevens’ business in exchange for dropping any claim pursuant to the napkin agreement. This is a crucial step in the case, for it states that you did not entertain the napkin statement as a contract, let alone a binding one. A new agreement may be better seen as the main governing contract in this situation, as both parties have signed it. This is even more so the case since both parties agreed and signed the new agreement, thereby negating any validity of the napkin offer.
Conclusion and Recommendations
After analyzing the roles and requirements of common law and facts, it can be said that a legally binding contract was not created from a napkin offer. Moreover, the newly written agreement, which deals with free advertising, seems to be the dominant contract in this kind of scenario. In my opinion, it is not necessary to proceed to any further steps, including asset transfer, until we get additional evidence that is anticipated. With further proof, I shall brief you and then make appropriate recommendations after going through it physically.
Yours sincerely,
Alex Wright
Trainee Solicitor
Hernon Usk & Partners LLP
TASK 2: SKELETON ARGUMENT
In The High Court of Justice
(King’s Bench Division)
Claim No: [Insert Number]
Between: Peter Stevens (Claimant) and Mike Collins (Defendant)
Skeleton Argument for the High Court: Case MC/4013
Introduction
This skeleton argument is submitted on behalf of the defendant, Mike Collins, to the claimant’s application for rescission of the Advertising Contract signed on 10 March 2024. Peter Stevens, as the claimant, states that the defendant made fraudulent misrepresentations about his company, Brightlight Designs Ltd, and his car, Bentley Bentayga. The claimant further claims that he relied on these representations when agreeing to enter into the Advertising Contract. The defendant has replied to these allegations, and he has stated that he did not make any actionable statements but opinions.
Issue 1: Were The Representations Fraudulent Or Negligent?
The main allegation of the claimant is that the defendant was negligent in representing aspects of his company and a car. In that case, the claimant argues that the defendant falsely stated that his company was “little” and his vehicle was “cheap”. However, the defendant has denied that these were actual misrepresentations of the fact. The representations, such as “little” company and “cheap” car, are regarded as rhetorical and should be considered mere puffing. In the case of Smith v. Land and House Property Corporation (1884), the court held that a bare statement of intention or sales talk for parts is not recoverable as a rule.[3] Therefore, the statements made by the defendant cannot amount to either fraudulent or negligent misrepresentation.
Issue 2: Did The Claimant Rely On These Representations?
For the claim to work, the claimant has to prove that he relied upon the representations at the time of signing the Advertising Contract. The claimant has not established this in these proceedings. The defendant’s argument, therefore, is that the claimant fully understood the financial position of the defendant’s business as well as the value of the car at the time he entered into the Advertising Contract. Moreover, the claimant had information about the company turnover of £2 million and the value of Bentley. Thus, the claimant never invoked any misrepresentation at all but entered into the Advertising Contract on the basis of such facts. The defendant notes that incorporation of the Advertising Contract occurred after the claimant had interaction with the defendant’s business and car, factors which go a long way in weakening the case.
Issue 3: Is The Advertising Contract Voidable?
In this case, the claimant has instituted an action of seeking an Order of the Court to declare that the Advertising contract be rescinded based on the grounds of fraudulent or negligent misrepresentation. However, in order to be granted the rescission, the claimant has to prove that the misrepresentation made to him was material and that he had lost something due to the misrepresentation. The defendant argues that this Advertising Contract is both lawful and legal. Based on the Contract, both parties made voluntary negotiations, whereby the claimant abandoned upon claims in the “Napkin Contract” and the use of advertising services from the Respondents. The holder of the note made no material misrepresentation to cause the claimant to get involved in the contract. Most of the provisions of the Advertising Contract, including advertising services, were spelt out and offered adequate consideration to the claimant for entering into the contract.
Issue 4: Damages and Other Reliefs
The claimant seeks damages, which include the £120,000 dividends plus interest thereon. The defendant disputes the above allegations in these claims. The claimant has been unable to prosecute his allegations of misrepresentation against the defendant by substantiating the fact that he had lost £120 000 as a consequence of the same. Furthermore, one must say the claimant cannot include interest under section 35A of the Senior Courts Act 1981.[4] The defendant also claims that the claimant should not be awarded any costs or any other relief.
Conclusion
The defendant denies that he made any misrepresentation at all and contends that a valid Advertising Contract was entered into. All the claimant’s claims have, therefore, all come undone because the defendant did not make fraudulent or negligent misrepresentation; these representations were not relied upon by the claimant; the contract should not be rescinded. According to the defendant, the claimant has no reasonable right to succeed in its claim and, therefore, the claim should be dismissed, and the defendant be awarded the costs of the defendant.
Signed
Alex Wright
Trainee Solicitor
Hernon Usk & Partners LLP
Date: [Insert Date]
TASK 3: CASE ANALYSIS
Case Analysis: Exemption Clauses in the Addendum to the Advertising Contract
Introduction
For the current case analysis, the legal issue to be discussed is whether the exemption clauses included in the Addendum to the Advertising Contract between Mike Collins, representing Brightlight Designs Ltd, and Peter Stevens, representing Stevens Property Maintenance Ltd, were valid. In that light, the incorporation, construction and statutory controls surrounding these clauses will be principally addressed. If any clauses exclude or seek to limit liability, then they must meet the legal requirements of these principles. This analysis will then determine whether the terms in the Addendum satisfy these goals based on the case law and statute contained in the document.
Incorporation of the Exemption Clauses
The first issue that arises for consideration is whether or not the exemption clauses in the Addendum have been incorporated into the contract validly. An exemption clause should be properly inserted into the contract formally, either by notice or consent of the other party. From L’Estrange v F Graucob Ltd [1934] 2 KB 394, it is precedent on the proposition that one is entitled to terms they have signed to where the party has been given a chance to read the terms apart from where the terms are held to be unconscionable. This, however, implies that it was signed by both parties and, therefore, the exemption clauses probably agreed as well. The court may also analyze if the said clauses were properly called to the attention of Peter Stevens at the moment by signing, as in the case in Parker v South Eastern Railway Co (1877) 2 CPD 416 on this argument.
Construction of the Exemption Clauses
The second issue is whether the exemption clauses are well drafted. For instance, the clauses must be specific and businesslike so as to make it quite clear that the limitation or exclusion of liability is intended. According to clause 2 of the Addendum, Brightlight Designs Ltd or Mike Collins shall not be responsible for any loss of profits, revenue, or anticipated savings, whether resulting from the effectiveness of advertisement, its reach, and outcomes of the service. This clause may look general and can be understood as excluding liability for almost any type of loss. Contracting parties must observe the contra proferentem rule, where any doubt as to the content of an exemption clause must be resolved against the party that incorporated the clause, as was the case with Photo Production Ltd v Securicor Transport Ltd [1980] AC 827. Thus, while a clause may be acceptable in an attempt to disclaim liability for specific types of loss, the construction of the clause may be difficult if the provision is regarded as falling outside of the statute or as ambiguous.
Statutory Controls and Unfair Terms (UCTA)
The exemption clauses are also governed by statutory laws, especially under the Unfair Contract Terms Act of 1977[5]. UCTA regulates the exclusion of liability for the supply of services and restricts the capacity of the party to relieve the other with reference to negligence. This means that in order for exclusion clauses to be enforceable under this statute, they must meet the test of reasonableness. For instance, in George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803, the House of Lords made certain observations which touch on these specifics of the reasonableness test; they opined that in determining the reasonableness of a clause the court needs to take into account the nature of the contract. In the present case, some of the exemption clauses in the Addendum may fall foul of UCTA since they exclude liability for ineffective advertising services. One might expect a court to consider whether Peter Stevens had an opportunity to discuss these terms because they may be standard forms of contract and perhaps not the conditions especially selected for individual agreements. When the court finds that the terms are unfair and or unreasonable, they might not be legal to enforce.
Conclusion
The potential for claims under exemption clauses in Pillar 3 Addendum to the Advertising Contract between Mike Collins and Peter Stevens is rather challenging. Even though these clauses seem to have been adopted by entering the Addendum, their structure, especially the structure of the exclusion of liability, raises concerns. Additionally, any of those clauses could be unfair under the UCTA 1977, depending on the reasonableness of the clauses in each specific business. Given the potential for confusion and statutory provisions which are applicable to such terms, it is probable that the court would look carefully at the terms before deciding whether they do or do not stop Peter Stevens from claiming compensation because of the poor performance of the advertising services.
TASK 4: CASE NOTE
Case Note: Reforming the Doctrine of Frustration in Patricia vs Joe Limited (2024)
Introduction
The doctrine of frustration has been a cornerstone of contract law, allowing parties to discharge their obligations when an unforeseen event renders performance impossible or radically different from what was originally agreed.[6] In Patricia vs Joe Limited, the Court of Appeal contemplated a major shift in the doctrine of frustration. The case related to whether the doctrine should apply to situations where the law is changed by legislation in a way that has the effect of making the performance of the contract impossible. Patricia, the Claimant, said the new law that sought to ban the manufacturing of certain products rendered her contract with Joe Limited unperformable. At the same time, Joe Limited stated that frustration does not apply in this case.
Facts of the Case
Patricia signed a contract with Joe Limited to supply goods for a particular event. After signing the agreement, a new law was adopted, according to which the production of the goods specified in the contract is prohibited. This change made the performance of the contract impossible. Patricia wished to use the frustration clause, which was that the new law interfered with the main basis of the agreement. This claim was dismissed by Joe Limited, saying that the change of legislation was a risk and should have been included in the contract.
Court’s Decision
In this case, the Court of Appeal decided in favor of Patricia by invoking the doctrine of frustration. To this, the court gave its approval to classify frustration as not only an impossibility resulting in physical barriers but legal ones as well in the form of unforesighted changes impacting the contract. The court underlined that contractual risks should be defined, bearing in mind that modern business differs from the old-fashioned economy owing to the fact that changes in legislation/regulation may produce new intolerable consequences regarding the performance of the contract. This decision raises the possibility that the doctrine of frustration may be brought in for the purpose of handling situations where the law or regulations make for actual contractual unfairness or impossibility.
Legal Significance
The case is an example of further reform of the doctrine of frustration of the contract, extending it beyond classic uses of the rules. This gives place to a wider approach where either a legislative or regulatory amendment that alters the substratum of a contract could lead to frustration. The decision is of profound interest in the business and the legal profession, as it suggests the contract law moving to a more evolutionary, dynamic model.
Conclusion
Patricia vs Joe Limited can be used to support a progressive approach to construing frustration, including that it should develop a new meaning to fair legal or regulatory changes. This case is useful for further litigation of cases related to the concept of frustration, especially in contemporary commercial law contracts modified by occurrences not provided for in the legislation.
Bibliography
Case Laws
- Balfour v Balfour[1919] 2 KB 571 (CA)
- George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803
- L’Estrange v F Graucob Ltd [1934] 2 KB 394
- Parker v South Eastern Railway Co (1877) 2 CPD 416
- Photo Production Ltd v Securicor Transport Ltd [1980] AC 827
- R v Clark (1927) 40 C.L.R. 227
- Smith v Land House Property Corporation (1884) 28 Ch D 7
Statutes
- Section 35A of the Senior Courts Act 1981
- Unfair Contract Terms Act 1977
Websites
- gov.uk. “Unfair Contract Terms Act 1977.” Legislation.gov.uk, 2013, www.legislation.gov.uk/ukpga/1977/50.
- Practical Law, Thomson Reutershttps://uk.practicallaw.thomsonreuters.com/7-508-4680?transitionType=Default&contextData=(sc.Default)&firstPage=true accessed 29 November 2024.
Books
- Witzleb N (ed), Contract Law in Changing Times: Asian Perspectives on Pacta Sunt Servanda(Taylor & Francis 2022).
[1] [1919] 2 KB 571 (CA).
[2] Ibid
[3] (1884) 28 Ch D 7
[4] Practical Law, Thomson Reuters.
[5] Legislation.gov.uk. “Unfair Contract Terms Act 1977.” Legislation.gov.uk, 2013.
[6] Witzleb N (ed), Contract Law in Changing Times: Asian Perspectives on Pacta Sunt Servanda (Taylor & Francis 2022).
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