Question: CONTRACT LAW CASE STUDY 2, ASSIGNMENT 2, TASK ONE
Barry is a retired lorry driver who has just set up his own distribution service called
'Deliveries R Us'. Pencilbox PLC, his first customers, want to use Barry's service to
deliver stationery to some of their retail outlets. They reached an agreement and a
contract was signed whereby Barry would deliver 'a minimum of 3000 boxes of
stationery for Pencilbox over the next 12 months. ' The contract was to commence on the
1st April. No maximum figure was specified in the contracts and a delivery charge of
£1.00 per box was laid down by Barry.
Barry expected to deliver a higher amount than the minimum specified and so decided to
take out a bank loan in order to upgrade his existing fleet of lorries.
However six months later, Pencilbox pic wanted to renegotiate the delivery charge
threatening immediate withdrawal unless the charge was reduced to 50p per box. They
also told him that they wanted him to enter a three year contract with 'Gadgets Ltd' a
subsidiary of Pencilbox pic or they would terminate their business arrangement with his
distribution service.
Barry has found that his distribution service hasn't been as busy as he believed it would
be and so agreed to the new arrangements as he didn't want to lose their custom even
though he was aware he would be making a loss on the contract with Gadgets Ltd.
Barry has asked for your advice. You are a junior partner of Patel and Brown
Solicitors and have been asked by your senior to write a report on whether he
can claim the lost monies for every delivery he made on the grounds that the
modification made to the contract was due to improper pressure.
TASK TWO
You have been asked to write a letter to the following client, Julia.
Julia, a partially sighted invalid, jointly owns a home with her husband Charles. The
family home has been mortgaged to Braddale Building Society.
Over the last year, Charles has been experiencing great losses in his business and has
failed to meet a number of mortgage repayments. Due to this the building society has
started proceedings against the couple. As they don't want to lose possession of the
house, Charles and Julia have approached their bank, Rochford Bank Pic and hope to
refinance the mortgage. The loans manager, Mr Credit, arrived at their home with
important documents and papers regarding the loan.
Julia was not happy with this and told Mr. Credit that her husband's business wasn't
doing well and that she strongly believed it would carry on making a loss and in view of
this she was not going to sign any documentation that covered Charles' business
liability.
Mr. Credit assured her that the papers didn't cover any business liability and that if she
didn't sign there would be danger that she would lose her home. He was so persistent
that she signed.
Julia hesitantly asked for the documents to be fully explained to her again as she was
unable to read the documentation because of her disability. Having heard the
explanation she reluctantly signed the papers.
Julia has now discovered that the documents not only cover a mortgage relating to
the house but also cover Charles' business debts.
Julia is very worried as the bank is insisting on enforcing the agreement. Your letter of
advice should cover the following.
1. Discuss grounds on which Julia might avoid the contract and whether
any remedies are available.
2. Would the situation be different had Julia taken independent advice
and then entered the agreement.
TASK THREE
Catherine is employed as an accountant at 'Cash and Co.' and based in a firm in
Bradford. She has worked there as an employee for 6 years and her original contract of
employment prevents her from working as an accountant within 60 miles of Bradford if
and when she left the firm. After a successful interview, she has received a lucrative
offer from a firm of accountants in Leeds where she would be employed in a higher
position. She resigns and commences her new employment. 'Cash and Co.' have sent her
a letter stating that are going to take matters further as she has breached her contract of
employment.
You have been asked to write a memorandum to Catherine to outline her position
regards her previous employment contract.
Answer: TASK 1
Regarding: Duress
Introduction:
Below I have written a report concerning Barry on his current circumstances.
Findings:
Duress
For a contract to be binding the parties must voluntarily consent to it. Therefore if one
party is forced to make the contract by violence or the threat of violence then this is
common law duress and renders the contract voidable.
Traditionally the common law of duress confined the doctrine. Only duress to the
person was recognised, it would only make a contract voidable where one party
obtained the others consent by means of physical violence and treats of it, as it was
seen in the following cases Cumming v Ince1 and Barton v Armstrong2 where in
both cases the contract was set aside because of duress.
As a result of the nineteenth century limitation on duress, it could not be applied to
duress of property and goods. Therefore if a person unl...(short extract)
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- Subject: Law
- Course: Contract Law
- Level: Degree
- Year: 2nd/3rd
- Mark: 78%
- Words: 4749
- Date submitted: April 18, 2009
- Date written: March, 2007
- References: Yes
- Document type: Essay*
- Essay ID: 1448
