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Contract Law Problem Question
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Contract Law Problem Question
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Word Count: 1500Part (a)
Advise Izel of any legal remedy against Earth Ltd. [15 marks]
Whether the contract is binding on Izel depends on whether there is valid agreement.
Ambiguity derives from Lorena’s knowledge of Izel’s mistaken terms which are known to
wrongly represent Izel’s intentions to enter legal relations. For there to be a valid contract,
there must be consensus ad idem of the contractual terms.
Following Blue v Ashley1, this case is an exception to the objective test because the offeree
knows the offer does not represent the offeror’s real intentions. Instead, a subjective
approach is adopted likewise to Hartog v Colin and Shields2. In correspondence to Hartog,
Izel mistakenly offers the terms of sale - to be per trunk rather than the industry standard of
per tree - meaning the offer was absurdly low. As Earth Ltd have from inception purchased
trees from Izel per branch, Lorena has subsequently recognised that Izel’s mistake
incorrectly represents her subjective intention, due to past consideration in previous
contracts and shared knowledge of the common practice. However, Lorena fails to disclose
knowledge of the error so Earth Ltd could take advantage of the low offer. Therefore, the
two parties have agreed to different terms of consideration, meaning there is not an
objective meeting of the mind, as required by Raffles v Wichelhaus3.
1
[2017] EWHC 1298 (Comm)
2
[1939] 2 All ER 566
3
[1864] 2 H & C 906
1
, Word Count: 1500
Thus, the contract between Izel and Earth Ltd is void due to a lack of consensus ad idem of
the contractual terms stemming from known mistaken terms of the offeror which are
recognised to wrongly represent Izel’s legal intentions.
Part (b)
Advise Pudlowski’s Pharmacy on liability to Oana and whether it can contest the
complaint. [25 marks]
Part 1: Pudlowski’s Pharmacy’s liability to Oana
The legal issue regarding Pudlowski’s Pharmacy’s liability to Oanau is whether there is a
legally binding offer for sale resulting from the advertisement of an auction. Offers must be
distinguished from an invitation to treat, which advertisements are generally considered to
be following Partridge v Crittenden4. However, as established in Harris v Nickerson5, auctions
are only considered to be declarations to inform the public that the sale is to occur.
Following this precedent, Pudlowksi’s Pharmacy’s advertisement was an invitation to treat
not an offer to contract with any potential customers attending the auction, nor was it a
guarantee that the goods would be put for sale.
Therefore, the advertisement did not legally bind the Pharmacy to auction the items in
question on the day specified because it was not an offer and therefore there could not be
acceptance by Oana. Thus, they are not obliged to compensate Oana for any damages.
Part 2: Contesting the complaint by Blaise
4
[1968] 2 ALL ER 421
5
[1873] LR 8 QB 286
2
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