Business Law

ID: 2170078

Question 1:
Who is the pursuer?
A pursuer “is a person who is seeking a legal remedy due to harm allegedly done by the
defender” (Black, 2014:329). Therefore, the pursuer in this case is Mathieson Gee
(Ayrshire) Limited because the matter of this case was brought to the court by Mathieson
Gee (Ayreshire) Limited demanding the defender (James F. Quigley) to pay £1229 as it’s
the sum due as agreed upon in the contract.

Who is the defender?

A defender “is the person who is allegedly responsible for the harm or damage done to
the pursuer” (Black, 2014:329). In this case, the defender is James F. Quigley since the
action has been brought by Mathieson Gee (Ayreshire) Limited (the pursuer).

Which court heard the case?

The court that heard this case was the House of Lords, Scotland. However, due to the
Constitutional Reform Act 2015 ss. 23 and 40, the House of Lords has been replaced by
the Supreme Court of United Kingdom (Black, 2014).

What was the dispute between the parties?

The dispute between the parties was in the “consensus of idem” in the contract formed.
According to the pursuer, the contract was formed on the bases to supply the defender
with the mechanical plant for the excavation and the removal of the mould. However,
according to the defender, the contract was formed on the bases that the pursuer would
remove the silt and deposit from the pond by providing workers and the mechanical plant
to complete the job. Therefore, the dispute between the parties was whether the contract
was to provide the equipment only, or to carry out the job of removing the silt.
Additionally, the defender also thought that the price charged is overpriced as he is also
due to pay 1229£ in addition to the 300£ he paid previously.

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Discuss the reasoning of Lord Normand.

Lord Normand allowed the appeal and dismissed the action. Lord Normand
reasoned his decision based on a question that was required to be answered in the Court
of Session. The question was “whether there was a contract between the parties or
whether there was no consensus in idem”. He said if there was a contract between the two
parties, a consensus in idem had to arise in order for the contract to form. Lord Normand
raised the point that the letter sent on the 2rd of March from the pursuer did not have any
ambiguity as it stated all the necessary points that need to be clarified before entering into
a contract, however, the letter sent on the 3rd of March from the defender, supposedly an
“acceptance to the offer”, accepted a different contract than what was stated in the letter
sent on the 2nd of March by the pursuer.

Moreover, Lord Normand pointed out that the letter sent on the 2nd of March
stated to provide all the necessary mechanical plant with accordance to the S. R. & O.
rules and conditions, and charges for the hire of equipment and that these charges do not
cover the charges for the drivers or operators, which concluded that this offer offers the
hire of equipment to be used by the defender. However, the defender responded on the 3rd
of March with an acceptance of the offer to remove the silt, which is a different to the
offer offered by the pursuer. With the defender accepting a different contract than what
was offered, Lord Normand stated that no contract was formed. Additionally, according
to Black (2014), an acceptance to an offer, which accepts a different offer, is not an
acceptance to an offer, but is a counter offer (unqualified acceptance).

In my opinion, I found that the reasoning of Lord Normand was inconclusive

because of the following reason. The reason is; even if it appears that there was no
consensus in idem in the letters that were sent, I believe that since the mechanical plant
was delivered, and accepted, the contract was established by act of performance on terms
and conditions of last counter offer, which belongs to the defender. This is based on the

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ruling of the case Continental Tyres and Rubber Co Ltd v Trunk Trailer Co Ltd[0].
Therefore, it can fairly be assumed that the pursuer agreed to the terms of the counter
offer made by the defender. If the pursuer did not agree, he would not have delivered the
mechanical plant.
Question 2:
Advise Jane:
An offer to sell a good is legally binding, in other words a “contact”, when: (i) a
consensus in idem arises to the key terms of the offer [1], and (ii) the offeree is aware of
the offer [2], and finally, (iii) an “acceptance” is clearly communicated between the parties
involved in the offer [3] (McBryde, 2007)[4]. These are the key elements in a contract; if
any of the points are not applied in a contract, then a legally binding contract isn’t formed
(Black, 2014)[5]. This essay will advise “Jennifer” by stating the issues in Jennifer’s case,
discern the law relevant to the issues (Contract Law) stated and apply them, and finally
draw a conclusion that selling the car to Ben was legal.

Firstly, according to Lord Russell of Killowen[6], advertisements are not regarded as

offers but are regarded as an “Invitation to treat” because if regarded as an offer, it would
put the seller in a position where the seller has many contracts in which he or she might
not be able to fulfill. Therefore, Jennifer’s advertisement to sell her car isn’t an “Offer”
but is an “Invitation to treat”. Hence, in order for a buyer to purchase Jennifer’s car, the
buyer has to present Jennifer with an “Offer” specifying the price, and the terms of the
offer. However, this offer is not a “legally binding contract” until the seller (Jennifer) and
the buyer communicate an unqualified acceptance on the offer presented as it has been
stated in the ruling of the case Felthouse v Bindley[7], which states that “silence” is not a
form of acceptance. This is because the “acceptance as form of silence” does not
communicate an acceptance between both parties but rather one party only (Black, 2014).
1

[0] [1985] S.C. 163

[1] Muirhead and Turnball v Dickson [1905] 7 F. 606
[2]
Lord President McNeill in Thomson v James (1855) 18 D. 1 at 10
[3]
Lord Denning in Entores Ltd v Miles Far East Corporation [1955] 2 Q.B. 327 at 332 to 333.
[4]
McBryde, W. 2007. The Contract law in Scotland 3rd edition. Edinburgh: Scotland. W. Green &Sons Ltd.

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Subsequently, in this case, if Martin were to raise legal actions against Jennifer
due to “breach of contract” he would be unsuccessful because, firstly, since the
advertisement was an invitation to treat, Martin’s statement “He will buy the car for
£750…unless he hears otherwise from her” is merely an offer to buy the car, and not an
acceptance. This is established due to the appeal ruling of the case Partridge v
Crittenden[8]. Secondly, if Jennifer’s advertisement were to be an offer, according to the
ruling of the case Felthouse v Bindley[7], Martin’s use of “silence” as a form of
acceptance for an offer is not valid. As Lord Denning[3] stated “an acceptance has to be
clearly communicated between the parties that are involved in the offer”. However,
According to the ruling of the case Shaw v James Scott Builders[9], silence may be valid
as a form of acceptance if the parties had previous contracts. In conclusion, whether,
Jennifer’s advertisement was to be an offer or an invitation to treat, in both cases Martin’s
acceptance is not valid, and therefore no contract was formed.

Secondly, a response to conclude an offer can either be an “Acceptance” or

“Rejection” (Unqualified acceptance), but not a “counter offer” because, according to the
ruling in the case Wolf and Wolf v Forfar Potato Co Ltd[10],a “counter offer” is a
qualified acceptance. This is because a counter offer (response to the original offer)
creates a new offer with new conditions. Subsequently, rejecting the original offer that
was offered by the offeror (Black, 2015)[5]. In conclusion, “a conditional acceptance is no
acceptance, this does not mean that parties cannot agree that the contract will be subject
to conditions” as stated in the ruling of the case Roofcare Ltd v Gllies[11].

In the case if Lucy were to raise legal action against Jennifer due to “breach of
contract”, she would be unsuccessful because Jennifer’s reply to Lucy stating that “she
accepts the offer of £600 BUT would have to collect the car herself” is regarded as a
“Counter offer” (qualified acceptance) and not a unqualified acceptance, and since Lucy
did not reply to Jennifer’s counter offer, no contract was formed because, one, an

[5]
Black, G. 2014. Business Law in Scotland 2nd edition. Edinburgh: Scotland. Thomson Reuters (professionals) UK limited.
[6]
Esso Petroleum Co Ltd v Customs and Excise Comrs [1976] 1 All E.R.
[7]
(1872) 11 CB (NS) 869

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unqualified acceptance was not communicated and two, as it was ruled in the case of
Wolf and Wolf v Potato Co Ltd[10], Lucy’s “silence” to Jennifer’s “counter offer” cannot
be accepted as a form of an acceptance. Therefore, no contract has been formed between
Jennifer and Lucy. However, if Lucy did reply with an acceptance to Jennifer’s “counter
offer”, therefore, it would have made the selling of the car to Ben a “breach of contract”
between Lucy and Jennifer, but this is not the case (MacQueen et al, 2012)[12].2

In conclusion, my advice to Jennifer is to go ahead with the sale of her car to Ben as she
clearly communicated her acceptance to Ben’s offer, and therefore, forming a legally
binding contract between her and Ben; obligating her to sell her car to Ben. Moreover,
Jennifer does not have to worry about Lucy and Martin in case they raise legal actions
against her due to “Breach of Contract”, because it is concluded that both Martin and
Lucy did not perform the key elements that are needed in a contract, therefore, legal
actions against her would not stand in court of law.

[8]
[1968] 1 WLR 1204
[9]
[2010] CSOH 68
[10]
[1984 S.L.T. 100]
[11]
1984 SLT (Sh Ct) 8.
[12]
MacQueen, H. and Thomson, J. 2012. Contract Law in Scotland 3rd edition. Edinburgh:Scotland. Bloomsbury Professional.