Contract Law Problem Questions and Essay Topic

Baz and Steve are brothers. On 1st June Baz meets his brother for a drink and tells him he is looking for a new speedboat. Steve replies that he wants to sell his Sea Ray 350 Sundancer speedboat as there is now a better model available and that he is happy to sell it to his brother “on a business basis”.  Steve says he wants “about £100,000” for it. That evening Baz sends an email to Steve saying, “I accept your offer to sell the speedboat for £100,000 and will transfer the money in a few days.” On 3rd June, Steve sends Baz an email that says: “Don’t be stupid I wouldn’t sell the boat for that; I want £125,000 for it. To avoid any further misunderstanding, do not email me again unless you do not want the boat at this price.” Baz was so annoyed on reading the first sentence of Steve’s email that he deleted it without reading further and did not reply. Three weeks later Steve rang Baz and demanded £125,000, offering to deliver the boat on the following weekend.

PART B: 

The absolute maximum word limit for a question from PART B is 1600 words and ideally you should aim for no more than 1550 words.

CHOOSE ONE QUESTION:

QUESTION B1:  

“The Supreme Court in Triple Point Technology v PTT Public Company Ltd [2021] UKSC 29 has provided much needed clarity on the law relating to liquidated damages.”

With reference to the case itself and academic commentary, explain the main legal issues raised by the decision and explain how the Supreme Court has chosen to settle the law in this area. 

QUESTION B2:

Bella wishes to buy a sports car and visits Sion, a car dealer.  Bella immediately falls in love with a vehicle branded by its manufacturer as Cool Cruiser, which Sion describes as ‘the most reliable car on the road’.  She asks Sion about the age of the vehicle.  Sion consults the Cool Cruiser’s documentation and sees that it is written in Italian. Sion’s Italian language skills are very basic but he has an attempt at deciphering the information and eventually informs Bella that the car is ‘brand new’.  Bella glances at the registration plate of the vehicle and notices that the registration would suggest that the vehicle is older than Sion has claimed.  Bella suspects, but is not certain, that Sion has given her incorrect information about the age of the car.

Bella decides to buy the car and pays £45,000 for it.  Over the course of a few weeks, various defects appear in the car which cost Bella £1,000 to repair.  Finally, one morning, the car will not start and Bella has to spend £300 in taxi fares to be able to commute to work.  One day she requires the taxi to take her to the airport where she has booked to travel to Paris with the intention of concluding a lucrative business deal and signing a multi-million-pound contract. However, the taxi driver loses his way and arrives late at the airport.  Consequently, Bella misses her flight and the opportunity of agreeing the deal.  On her way back home from the airport, she receives a telephone call from the garage where her car is being repaired.  The mechanic informs Bella that the Cool Cruiser sports car is not brand new but eight years old.

Advise Bella on whether she may be able to sue Sion for misrepresentation or for a possible breach of contract.  Where possible, answers should specify the amount of damages (if any) which could be awarded. 

QUESTION B3: 

The doctrine of frustration will apply in circumstances where the performance of a contract is contrary to some law after the contract is made and this is often referred to as ‘supervening illegality’. 

Critically evaluate the development of the common law to deal with cases of supervening illegality and where possible, with particular reference to issues surrounding Brexit and the Covid-19 pandemic. Conduct this evaluation with reference to a wide range of relevant legal authorities which may include for example: case law, statute, academic, judicial and practitioner commentary. 

QUESTION B4:

In the case of Pakistan International Airline Corporation v Times Travel (UK) Ltd [2021] UKSC 40, the Supreme Court confirmed the basic elements for establishing a finding of lawful act duress, and in doing so, highlighted how the doctrine applies in a limited set of circumstances, is therefore narrow in scope, and as such, is rare.

With reference to the historical development of economic duress and in particular to the recent judgment of Pakistan International Airline Corporation v Times Travel (UK) Ltd, critically evaluate the circumstances under which lawful acts or the threat of lawful acts may provide a sufficient basis for the doctrine. Conduct this evaluation through researching and referencing appropriate supporting case law, academic journal articles and practitioner commentary.

Law Assignment Answers: Expert Answers on Above Contract Law Task

Triple point technology v PTT public company limited

The issue is to identify if liquidated damages apply in a condition when the contract is terminated before completion. According to the court of appeal, the liquidated damages can apply only if the work is completed late and it is not applicable on termination. According to the Supreme Court, it can be applied up to termination for delay and after that, only the general damages apply.  This clarifies the application of LD as risk allocation and it is considered as commercially sensible.

Bella v Sion misrepresentation and breach of contract

The misrepresentation is the false claim by Sion that the car was brand new, and despite suspicion, Bella relied on it which claims it as valid. The remedy available is damages under Misrepresentation Act 1967.
The breach of contract is identified in the sense that the term clearly indicates that the car matched the description which is a breach. The damages are in the form of repair cost 1000 and taxi fees 300. The analysis leads to the conclusion that Bella can sue for misrepresentation and breach.

Frustration and supervening illegality

Doctrine states that the contract is discharged when performance becomes illegal. This is identified from the case like Fibrosa v Fairbairn. The changes in the regulation as a result of Brexit can frustrate EU-UK contracts and Covid 19 lockdowns also caused illegality. The conclusion is that the Doctrine remains narrow and it can be applied only in situations where the performance is genuinely unlawful.

Pakistan international airline v Times travel

The issue is whether the lawful threats can be duress. The court position indicates that the existence of lawful act duress is quite rare where conduct is unconscionable. The supreme court also has given narrow scope and emphasized on exceptional nature. It leads to the conclusion that the application of lawful act duress is quite rare and it preserves freedom of contract.

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