Contract and Tort Brief
Contract and Tort Brief
LO4 EVALUATE THE ELEMENTS OF TORT OF NEGLIGENCE AND REMEDIES AVAILABLE LO4
M4 COMPARE AND CONTRAST TORT OF D2 CRITICALLY EVALUATE PRINCIPLES OF THE
P5 ASSESS THE ELEMENTS OF TORT OF TORT OF NEGLIGENCE, WITH REFERENCE TO
NEGLIGENCE WITH BREACH OF CONTRACT,
NEGLIGENCE, USING SPECIFIC EXAMPLES. PROFESSIONAL ADVICE.
USING SPECIFIC EXAMPLES.
SUBMISSION FORMAT
THE SUBMISSION IS IN THE FORM OF One ESSAYS AND A WRITTEN REPORT
BOTH SHOULD BE WRITTEN IN A CONCISE, FORMAL BUSINESS STYLE USING SINGLE SPACING AND FONT STYLE TIMES NEW ROMAN AND SIZE 11. YOU ARE
REQUIRED TO MAKE USE OF HEADINGS, PARAGRAPHS AND SUBSECTIONS AS APPROPRIATE, AND ALL WORK MUST BE SUPPORTED WITH RESEARCH AND
REFERENCED USING THE OSCOLA REFERENCING SYSTEM. PLEASE ALSO PROVIDE A BIBLIOGRAPHY USING THE OSCOLA REFERENCING SYSTEM. THE
RECOMMENDED WORD LIMIT IS SPECIFIED
PART 1
On the second of April, an announcement appears in the newspapers to the effect that shares in digger, a gold exploration
company, may be subscribed for €5 each. Later that day goldbug sees the announcement and fills in the application form in the
newspaper requesting 1,000 shares. His application is received by digger the following day and the company secretary promptly
sends the share certificates to goldbug by that morning's post. However, goldbug changes his mind and on the same afternoon
(the 3) he posts a letter, withdrawing his application to digger. During the day a rich seam of gold is discovered by digger in
Cumbria and the company secretary telephones goldbug informing him that they do not wish to accept his application and
would like him to return the certificates when they arrive. By the time he receives the secretary's request, goldbug has heard of
the gold discovery and wishes to buy the shares after all. Advise goldbug by critically evaluating the process of formation of a
contract and by supporting your arguments with case laws. (LO1)
PART 2
Florence owns five adjoining houses, numbers 1-5 high street magic town, which she intends to rent to local people and
students. On 1 September she advertises the properties as available in the local newspaper but does not state a price. Advise
Florence as to the legal implications of the following events. Critically evaluate how the element of consideration is present in
each given scenario. (LO1)
A. Zebedee, a handsome student, contacts Florence who agrees to rent no 1 high street to him for £50 per month.
Zebedee is amazed at the low rent and agrees immediately.
B. Dillon is worried that he will not be able to find accommodation before the university term begins. When he contacts
Florence, he agrees to rent no 2 high street for £1,000 per month even though he knows this is twice the normal rate
C. Ermintrude works as Florence’s gardener and was Florence’s father's nurse when he was elderly and ill. Florence says
that Ermintrude can live in no3 high street without paying any rent because Ermintrude was so kind to Florence’s
father before he died.
D. Florence admires the police force. She agrees to let no 4 high street to Brian, a police sergeant. Brian tells her what a
tough year he has had as the police force are understaffed. She tells him she does not expect any rent as he will be
doing such a wonderful job working in these conditions.
E. Florence agrees to rent no 5 high street to Brian for £500 per month but asks Brian to pay the money to her niece
Rosalie.
PART 3
Simone has a dairy farm business and attends a meeting with Rita; the manager at Freshco, a large national supermarket to
whom Simone wishes to sell her milk. Rita is impressed by Simone and wants to do business with her. Rita agrees to contract
with Simone for a period of six months. She hands
Simone the standard Freshco order form which details the quantity of milk. Simone is required to supply each week and the
dates on which it is to be delivered to the supermarket. Simone is thrilled to have this business opportunity and signs the order
form immediately. Unbeknown to her, on the back of the order form, in very small print, it reads:
CLAUSE 1.1
‘Freshco reserves the right to cancel the order at any time.'
CAUSE 1.2
‘Freshco limits its liability for any damage whatsoever and howsoever caused in the performance of its contractual
obligations to £100.’
After two weeks, Simone receives a telephone call from Polly telling her that Freshco wishes to cancel all future orders with
immediate effect. Simone is extremely upset and slams the phone down. Rita decides to drive over to Simone's farm to check
that she is alright. As she arrives, however, her car slips in the mud and crashes into Simone’s barn, causing 5000 pounds worth
of damage. Advise Simone.
Evaluate the terms of the contract established between Rita and Simone while analyzing the type of breach affected and the
remedies available to the aggrieved party. (LO2 and LO3)
SCENARIO B
You are preparing for your tort law exam. During your preparation, you are required to prepare the chapter named “tort of
negligence.” In the chapter, there is an activity section, which is compulsory for you to solve in order to pass the exam. In the
activity section you come across different questions which you are required to attempt; following are the questions given in the
activity section:
The police should never owe a duty of care in negligence to individuals who suffer harm if they fail to perform their
public functions of investigating and preventing crime. Critically analyze the elements of tort of negligence in this
regard and offer professional legal advice on situations when the police do owe a duty of care to citizens. (LO4)
Write a short note on comparison between the similarities and differences between tort of negligence and breach of contract
substantiating your answers with concrete examples. (LO4)
SCENARIO A - GUIDANCE
PART 1
Question is concerned with formation of contract, in particular the effects of various communications between goldbug and
digger company. Candidates need to ascertain the requirements necessary for an offer applying the criteria established in cases
such as Storer V Manchester City Council (1974), Gibson V Manchester City Council (1979) And Centrovincial Estates V
Merchant Investors Assurance Company (1983). If an offer was made, at what point was its completion of the form and
payment is likely an offer. An offer, to be effective, must be actually communicated to the offeree (see, for example, R V Clarke.
It is said that a contract requires an acceptance of a particular offer and the next issue that arises, is whether or not goldbug's
offer is accepted. In other words, when the company secretary posts the share certificates to goldbug in the morning post, is
this an acceptance of goldbug's offer? An acceptance takes effect upon communication but there are exceptions to this rule.
One of these exceptions is the postal acceptance rules and candidates needed to consider whether or not the company
secretary's posting of the share certificates is within this exception. (P1) the rules surrounding postal acceptance need to be
analysed and applied to this situation to resolve this issue. A detailed consideration of the decision in Household Fire Insurance
V Grant (1879) repaid the effort expended given the factual similarities between that case and the facts provided. Candidates
should refer to the later decision in Howell Securities V Hughes (1974) in order to develop a critical decision of the utility of the
postal acceptance rules in an area of instantaneous, and near instantaneous, communications.
The next issue presented by these facts is goldbug's next action when he then purports to revoke his offer. Is this valid? If so,
why is it valid? If the postal acceptance rules apply on the basis set out above, a valid contract is formed when the company
secretary posts the share certificates with the result that goldbug cannot now purport to revoke his offer because it has been
accepted and a contract formed (see, for example, Bye V Van Tienhoven (1880) for such reasoning). This is not a case in which
goldbug attempts to use a quicker method of revoking his posted offer (and thus the reasoning in Dunmore v Alexander
probably does not assist greatly in the resolution of first point). In addition, digger has attempted to withdraw its acceptance
after it was posted but before it is reached by goldbug - is this attempt effective? In this instance the offeree's change of mind is
communicated to the offeror using a faster method of communication. There is an absence of English authority on this point
although the decisions in Dunmore V Alexander (1830) (Scotland) And Wenkheim V Arndt (1873) (New Zealand) are of
persuasive effect in England. These are not, however, binding decisions and candidates are best advised to consider this as a
matter of principle. In this question, it is particularly relevant that when the company secretary has telephoned goldbug,
goldbug has already posted his own revocation. It seems unlikely, as a matter of policy that a court would wish to allow him to
revoke the revocation in light of the gold discovery. (d1)
PART 2
A clearly structured approach is needed in this question, which concerns the sole issue of consideration (m1) so the student
should not waste his/her time on discussing the issue of offer and acceptance in depth. Law cases, reports and other references
the examiner expects the candidates to use are:
A. Adequacy of consideration is not relevant - refer to Chappelv Nestlé, Esso Case And Bainbridge V Firmstone
B. Same issue as above - overvalue rather than undervalue – still enforceable
C. (c) an example of past consideration - which is not good consideration Lampleigh V Brathwaite, Re Mcardle, Re
Casey's Patents. Credit also for reference to non-pecuniary forms of consideration, e.g. White v Bluett.
D. Pre-existing legal duty is not good consideration- discuss Glasbrook V Glamorgan and the various football' policing
cases.
E. (e) consideration can move to a third party, Bolton V Madden.
PART 3
This question deals with the incorporation of terms into a contract, whether the terms are applicable to the circumstances that
have arisen and the statutory regulation of the terms. To begin, you could identify the issues facing Simone: the cancellation of
the contract and the damage to her bam.
You should first discuss whether terms have been incorporated into the contract. Most relevant here is whether the document
(order form) is one, which could be, expected to have contained contractual terms. As the form has been signed it may be
difficult to deny incorporation but reference can be made to the onerous nature of the terms and if this requires further steps
to be taken by Rita, on behalf of Freschco, to bring this to Simone's notice. ( P2 & P3). It could be useful to point out that as they
are both business people this will be difficult for Simone to argue if incorporation can be established you would need to discuss
whether the terms cover the breaches that arose particularly relevant here is whether Rita was acting in the performance of
contractual duties' when she damaged the barn, as clause 1.2 specifically refers to liability arising in those circumstances. (P 4)
statutory control over terms must then be examined. Since Simone is not a consumer only Ucta is relevant and candidates
should be able to examine the applicability of s.3 (2) (b)(i) and associated case law as well as s.2(2) and s.11 (in the event that
circumstances of accident might be held to fall within exclusion clause). One key issue was that Ucta only covers attempts to
exclude or limit liability for a breach and therefore does not directly cover clause 1.1. (M3)
Law cases, reports and other references the examiners would expect you to use:
Unfair contract terms act 1977: L'estrange V F Graucob: Thornton V Shoe Lane Parking (1971] 2 Qb 163: Parker V Ser (1877)
Spurling V Bradshaw [1956] ; Chapleton V Barry Udc [1940] , Andrews V Singer Co [1934] ; Ailsa Craig V Malvern Fishing Co;
Canada Steamship V R (1952] ; R&B Customs V Udt [1988] George Mitchell V Finney Lock Seeds [1983] ; Smith V Eric Bush
[1990]
SCENARIO B - GUIDANCE
The central issues in this question are the policy considerations for the reluctance of the courts to impose a duty of care on the
police when performing their public functions of investigating and preventing crime and the general rule against liability for
omissions. The answer required an analysis and evaluation of the law in this area to illustrate the current approach of the courts
to police liability for failure to act to prevent third parties causing harm to others. Students should mention Hill V Chief
Constable of West Yorkshire to explain the policy reasons underlying the reluctance of the courts to impose a duty of care on
the police to an individual member of the public when performing their function of investigating and preventing- the better
answers used the following cases to illustrate that the police can be under a duty of care for operational mistakes (P5). Kirkham
V Chief Constable of Greater Manchester, Reeves V Commissioner of Police of The Metropolis And Swinney V Chief Constable
Of Northumbria. This approach was recently confirmed by the supreme court in Robinson V Chief Constable of West Yorkshire
where a passer-by was injured in a negligently conducted arrest of a criminal (in this case, the decision to arrest the suspect at
the time and place in question involved a foreseeable risk that the claimant would be injured). Good answers would apply
Brooks V Commissioner of Police for The Metropolis where the house of lords rejected a claim in negligence against the police
and reaffirmed the approach in Hill and Smith Chief Constable of Sussex where a claim against the police also failed on the
ground of policy. Very good answers might offer professional advice and refer to Michael V The Chief Constable Of South
Wales Police and Lord Toulson's doubt upon the usefulness of the Caparo three-part test in such situations and discuss
Robinson where the supreme court said the proposition that hill established a principle that public policy justifications for
holding that liability in negligence should not be imposed on the police was a misunderstanding and misinterpretation of the
law (D2). The police, in common with everyone else, owe a duty of care to avoid causing foreseeable personal harm to another
person.
Students are required to clearly substantiate the differences between tort of negligence and breach of contract. This involves
them to discuss how tort is a civil wrong, whereas the breach of a contract is a failure of preforming legal obligation owed to the
other contractual party. Moreover, damages in tort are unliquidated whereas damages in contract can be both. In tort motive is
relevant. Whereas, in contract motive seems to be irrelevant. (M4)