2 %Subject: Business Law Coursework 2
3 %Student Info: Carey Riley, ID# MO/10/7220/MS
9 Claude was selling his 2011 Honda CRV for $3m. The offer was open from June 1 to
10 June 8, to 3 parties: Sonia, Jen and Harris.
12 Between June 5 and 6, the car was sold to a new party who was not a part of the
15 The offer to one of the offerees was withdrawn on June 7 by phone call.
19 Mardi Gras hotel offers rooming. However, another term of agreement is added after
20 registering, by way of a notice over the bed in the room.
24 =Glossary of Principles and Rules=
27 Any communicated, unconditional act that makes the offerer aware of the offerees
28 intention of taking an offer.
31 A valid offer followed by a valid acceptance.
33 : Breach of a condition:
34 failure to perform an obligation according to an established condition in contract.
37 a term of a contract that played an important part in the formation of the contract and
38 which, when unfulfilled may result in the ending of the contract (repudiation) or the
39 fullest range of remedies.
42 "some right, interest, profit or benefit accruing to one party, or some forbearance,
43 detriment, loss or responsibility given, suffered or undertaken by the other" during
44 formation of the contract.
47 an agreement where a valid offer is followed by a valid acceptance.
50 a term or offer made by the offeree which gives the offerer a choice in accepting or
51 refusing (hence cancelling formation of the contract).
54 a term in a contract that seeks to limit or exclude liability of the contract breach.
56 : Fraudulent misrepresentation:
57 when a party knowingly falsifies a representation made at or before the time of the contract.
60 an event beyond the control of either party that prevents the performance of a contract.
62 : Invitation to Treat:
63 an invitation to other parties to make an offer, usually to buy. The contract is formed by
64 the agreement to sell, which is taken as acceptance.
66 : Mere representations:
67 a factual representation by one party intended to induce the other party enter the contract,
68 but said representation is not meant to form part of the contract, and hence has no further
69 contractual significance.
72 communicated, specific terms set to be accepter by other party and ends on acceptance, proper
73 withrawal, lapse of time, or/and death of one of the parties.
76 acceptance of an offer by way of posting a letter of acceptance. The offer is agreed to on post
77 -- not receipt -- of the letter.
79 : Pre-contractual statement:
80 any statement made at or during formation of a contract.
83 Statements made before or athe time of contracting.
85 : Self-induced frustration:
86 frustration occuring within the control of one party.
88 : Speculative damages:
89 awarding damages according to a recreation of what would have been but for the breach of contract.
92 a contract with factors present at formation -- possibly unknown to one or either party -- that lack
93 the essential characteristics of voluntary agreement, is based on misinformation or runs contrary of
103 Sheryl bought the car from Marty. There was no evidence of prior knowledge of Claude’s offer or of her
106 ===Rules/Principles applied===
108 Claude did not communicate the offer to Sheryl. The rules of offer state:
110 - the offer must be communicated to the offeree
111 - the offeree must have knowlede of the offer for it to be valid and enforceable
116 On June 5, Marty responded to the advertisement from Claude. While pretending to be Mr. Markland, “he
117 gave Claude a cheque for $2.6m and drove away the car.” The cheque was dishonoured; Claude also
118 discovered that Marty was not Mr. Markland. Claude had not asked for identification. Marty sold the
119 car to Sheryl and “absconded with the money”.
121 ===Rules/Principles applied===
123 This was not a contract. It was an Invitation to Treat. Hence, making Marty the offerer and Claude
126 Marty is guilty of 2 instances of fraudulent misrepresentation:
127 + pretending to be Mr. Markland
128 + ending the contract with a fake cheque.
130 Even though this has happened, the discovery of the fact after the offer had passed on to another
131 party in a separate contract leaves no option but to sue Marty for damages, or to get the car back
132 plus suing for damages.
137 Jen received the letter on June 1. He immediately phoned Claude, but got his answering machine.
138 Jen left a message “stating that he would pay $2.5 for the vehicle”. Jen then waited for a response
139 from Claude, but, “not wanting to lose the car, left another message saying he would pay $3m.
140 Claude retrieved both messages on June 3.”
142 ===Rules/Principles applied===
143 Jen cancelled entering a contract when he made a counter-offer of $2.5.
147 On June 1, Claude received a letter stating her interest in buying the car, that “she wanted an
148 expert to give his opinion on the vehicle,” and with a cheque for $1m, showing her commitment in
149 buying the car. In the letter, she also requested that Claude not show the car to anyone until
150 June 8. On receiving the cheque, Claude immediately lodged it in his bank account.
152 ===Rules/Principles applied===
153 + Sonia used postal acceptance.
154 + Sonia used the rule of consideration by paying $1m as a commitment.
155 + Sonia entered the contract with the conditions that the car not be shown to anyone (no
156 Invitation to Treat) until June 8 and that she would bring a third party to give his expert opinion
157 on the car. Claude agreed to both when he deposited the checque.
162 Harris saw Claude’s letter on June 7. Claude called Harris 5 minutes later and personally withdrew
163 his offer to sell him the car. “Harris still proceeded to post his letter of acceptance on June 8
166 ===Rules/Principles applied===
167 Claude personally ended the contract with Harris by withdrawing the offer. The letter was not posted
168 as yet. Therefore, the contract does not extend to Harris.
170 ==Claude vs Mardi Gras Hotel==
172 Claude checked in and registered at the Mardi Gras Hotel. He went to his room where he saw a very
173 large notice over the bed, stating “The hotel is not liable for any losses and/or damage suffered by
174 any guests while on the property.”
176 “He left his gold watch and bracelet in the room and went to dinner. He gave the key to the receptionist
177 for safekeeping”. Upon his return to his room, “he discovered that the jewellery and other important
178 documents were missing.” The hotel denies liability for the loss of his items.
180 ===Rules/Principles applied===
181 Mardi Gras Hotel had a representation (an exclusion clause) that had no bearing on the contract, since
182 the contract agreed to at check in made no mention of the liability clause. There was not enough notice
183 of the clause. The clause also was not clearly addressed to any party.
189 With regards to Sonia: the contract is voidable by Sonia. Sonia can also sue for damages. Claude breached
190 the conditions set forth by Sonia in order for her to accept the contract: he advertised the car and
191 frustrated the terms by losing the vehicle.
193 The car is now legally Sheryl's. His only remediation would come from Marty. Otherwise, he has no right
196 Harris and Jen are out of the contract. Jen due to his counter-offer and Harris due to a withdrawal of
199 With regards to Mardi Gras Hotel he may sue for Remedy of Speculative Damages. He may be able to use this
200 case to his advantage in clearing the case with Sonia.