Central London Property Trust & Supply of Good And Service Act 1982 - Law Assignment Help

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This question concerns invitation to treat, offer, acceptance, consideration, and promissory estoppel. The three parties in this case; Ciara, Tom and Los Property Repairs will be given advice depending on whether performing a pre-existing obligation constitutes valid consideration and whether promises made have been fulfilled. This will be achieved by analysing statements made in this question. Ciara advertised to sell her house in the newspaper for £400,000. Generally, advertisements are not offers but invitations to treat, where parties invite other parties to negotiate or make a proposal, which can be freely accepted or denied. The Partridge v Crittenden1 case raised an issue regarding an advertisement in a magazine as an invitation to treat or a contractual offer. It was held the advertisement was an invitation to treat. Similar, in Fisher v Bell2, it was declared, in a shop window, displaying knives was also only an invitation to treat. Likewise, in Pharmaceutical Society of Great Britain v Boots Cash Chemists3, the court stated, in a shop, the exhibition of medicines was an invitation to treat as shoppers made offers to acquire goods at the till.

Following Partridge v Crittenden, Ciara’s advertisement is an invitation to treat as she was welcoming offers which she could choose to accept or deny. Tom made an inquiry as to whether the leaking roof will be repaired before the purchase is completed. An inquiry is asking for information to clarify uncertainty. In this situation, Tom’s inquiry was to gain information, alongside attempting to bargain with Ciara due to the issue of the leaking roof. Sometimes, an inquiry or a response to it, can be confused with an offer. In Harvey v Facey4, Facey’s reply to an inquiry was mistaken for an offer. The court concluded no legal actions can be taken as there was no offer for Harvey to accept. It appears Ciara took the leaking roof into account and lowered the asking price as she sent a letter to Tom, offering the house for £380,000. An offer is where the offeror sets defined and clear terms to the offeree with the intention to be legally binding once accepted. An offer can be of a unilateral or bilateral agreement.

A unilateral agreement is a promise made to the public, typically requires specific performance. The performance of the requested act implies acceptance, thus, a contract is formed. In Carlill v Carbolic Smoke Ball Co5 , Carlill used the smoke ball as set by the term. This provided the essential conduct to accept the agreement. By comparison, a bilateral agreement is where both parties exchange a responsibility by promising the other something. In MN Guha Majumder v RE Donough6 , the offeror offered to purchase the property from the offeree for RM70,000 which was accepted.

This constitutes a bilateral contract. Implying, Ciara’s offer proposal required Ciara and Tom to make a promise to each other to exchange the house for £380,000. Therefore, this would be a bilateral offer. On Friday morning, Tom accepted the offer by sending an email to Ciara before it lapsed. Acceptance is when the offeree voluntarily agrees to all terms of the offer. It must be clearly stated, simply remaining silent does not form acceptance.

There can be confusion to where acceptance becomes effective as it was in Entores v Miles Far East Corporation7. It was held acceptance became effective when the offeror received the instantaneous telex and not where it was sent. Evidently, the principle is that the offeror must receive the communicated acceptance for it to be effective, which applies to instantaneous methods of communications such as telex and email. Exceptions to this principle are a unilateral offer and postal rule, which was founded in Adams v Lindsell8 .

It states acceptance becomes effective when the letter is mailed, considering it is properly addressed and stamped. Ciara did not establish a communication method, implying Tom’s instantaneous email agreeing to all terms was acceptable and binding. Following Entores v Miles, acceptance became effective when it was received by Ciara on Friday. Tom made a partial payment of £200,000 on agreement with Ciara and £180,000 to be paid after the repairs finished. Consideration is an exchange of promise or an act amongst both contracting parties,

it creates a “detriment” to the promisee or/and a “benefit” to the promisor. Consideration must have a real value which is acknowledged by law to be sufficient. For example, a promise to stop complaining in White v Bluett9 was insufficient consideration. But in Thomas v Thomas10, £1 rent was acceptable consideration as consideration does not need to have market value. Suggesting the consideration between Ciara and Tom is sufficient as Tom incurred a legal detriment of £380,000 to give to Ciara and Ciara is induced by Tom’s detriment to give the house to Tom.

Ciara hires Los Property Repairs (LPR) to repair the roof in a month for £5,000. Later, Ciara unwilling promised an extra £5,000 for equipment needed to support the discovered weak structure and so the work is not delayed. Ciara’s promise to pay extra was not obtained by duress. However, upon completion, she refused to pay extra. The issue relates to whether the performance of LPR's pre-existing obligation can represent valid consideration. In Stilk v Myrick11, sailors performing present contractual duties were not recognized as consideration since they made no new exchange. An exception to this principle can be studied in Hartley v Ponsonby12.

In this case, good consideration was made because the sailors went beyond their obliged duties by navigating home regardless of being dangerously shorthanded. If these cases are applied, it would be difficult to claim that LPR provided good consideration or that they went above their duty by performing under the same role, thus Ciara’s promise cannot be enforced. However, it could be argued that performing an existing pledged responsibility is good consideration for a promise. This was argued in Williams v Roffey Bros & Nicholls (Contractors) Ltd13. It was concluded in such circumstances, if “practical benefit’’ is given from one to another party, then that will constitute valid consideration and the promise can be enforced. Ciara’s promise allowed LPR to complete repairs in the set timescale, due to which Ciara was able to complete the sale of her house. This is considered as a ‘practical benefit’ under Williams v Roffey.

Also, as Ciara’s promise was exchanged with good consideration so can be enforced. Where a promise is not backed up by consideration, that promise may have some effect under the doctrine of promissory estoppel. Promissory estoppel stops a promisor going back on the agreement where it would be unfair to do so because the promise was given willingly and the promisee has depended on it. In Central London Property Trust v High Trees House Ltd14, the court concluded both parties knew the promise made to accept reduce rent was going to be acted upon regardless of absence consideration. The plaintiff was stopped from claiming back the arrears under the rule of promissory estoppel. Clearly, it would be inequitable for Ciara to go back on her promise as LPR relied upon it and despite being reluctant, Ciara did not imply she will implement legal rights. Therefore, Ciara has to pay the additional payment. On completion of repairs, Tom refused to purchase the house as he believed the repair quality was unsatisfactory.

Renovating the roof in one month was a condition agreed upon amongst Tom and Ciara. Upon breach of a condition, the innocent party can dismiss the contract. Here, the issue relates to whether Ciara fulfilled her promise. In Lamare v Dixon15, Lamare was unable to keep his promise hence he could not claim specific performance when Dixon refused to complete the contract. Implying, if the repairs weren’t done to a satisfactory standard, then Tom is not bound to the contract. However, it could be debated the work was done to a satisfactory quality.

Ciara lacks construction knowledge to repair the roof herself hence she hired Los Property Repairs. It is an implied term that the contractors will perform the service with reasonable care and skill under the Supply of Good and Services Act16. So, it can be argued the quality of the work is at an acceptable standard and the condition was met as repairs were completed in the set timescale by professional builders. Thus, Ciara may be able to claim specific performance which would ensure Tom to complete the purchase or claim damages as Hooper did in Hooper v Oates17.

In this case, by failing to complete a house purchase, Oates faced penalties and was accountable for losses incurred by Hooper as a result of the breach. In conclusion, in Ciara’s and Los Property Repair’s situation, under the doctrine of promissory estoppel Ciara is bound to the contract with Los Property Repairs and has to pay the additional payment. Similarly, in Ciara’s and Tom’s situation, because Ciara performed all the necessary steps to repair the roof, Tom is bound to the contract and should complete the purchase as agreed.

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