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Natashah K Mapingere
23900329

LS110 Law of contract

Term C 2023
Term Project 2
30 January 2024

INTRODUCTION
In this scenario, we have several parties involved: Steve, Mary, Julie, and Dave. To
effectively analyse their rights and liabilities, It should be established that the sale of
the car was not an offer but an advertisement for a bilateral contract which is
invitation to treat and not an offer. Advertisements for bilateral contracts are when
both parties give and take, therefore are not legally binding and are termed invitation
to treat as it is a phase where parties discuss and negotiate terms (offers) that if
accepted to will amount to a contract (Charman, 2007). Below is the analysis of the
parties' rights and liabilities in the law of contract:

STEVE:
- Steve made a unilateral mistake by advertising the car for sale at $5,000 when its
actual price was $25,000. According to Charman,(2007), a unilateral mistake is when
one party is mistaken on the terms of the contract and the other party knows or must
know of this mistake.

Rights
Steve has a right to reject Mary's offer . Mary offered to buy the car at $5,000, which
Steve rejected . Steve went on further to inform her of the mistake and corrected the
price. Mary does not have a legal claim to force Steve to sell her the car at the lower
price because this is an invitation to treat and not an offer. In Pharmaceutical
Society of Great Britain v Booth Cash Chemists (Southern ) Ltd (1953), it was held
that goods for sale displayed, or goods with a price are treated as an invitation to
treat and not an offer. Hence, Mary's offer to pay £5000 was a negotiating phase that
required acceptance for a contract to be made. Therefore, Steve has a right to reject
an offer by a consumer (Elliot, & Quinn, 2007). Steve has the right and freedom to
contract with whomever and on terms he wants.

Secondly , Julie did indicate that she wanted to buy the car, but would have to
arrange for the money. This does not constitute a contract but merely a premilinary
stage of a contract were negotiations are still being made (Charman, 2009).
Therefore, Steve does not owe Julie anything and can sell to another customer up
unless she comes with the money and he accepts it.
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Steve has a right to sell the car to Dave. After Mary left, Steve corrected the price on
the car to $25,000 and subsequently sold it to Dave for that price. This action
effectively made it clear that he rejected the offer made by Mary. Steve did not
breach any contract with Mary by selling the car to Dave for the correct price.

Liabilities

In contrast to the above, Steve might be found to have committed an offence under
the Trade Descriptions Act (1968) as the offense might be found to be unfair
advertising or misleading marketing so as to draw customers and in this case it
misled Mary (Elliot, & Quinn, 2007) .

MARY:

Rights
ln reference to Centrovincial Estates plc v Merchant Investors Assurance co Ltd
(1983), Mary has a right to claim for Steve to sell her the car for £5000. In this case,
a landlord made a mistake in writing the price an annual rent price of £ 65 000 in a
lease instead of £126 000. It was held that a contract was formed when the plaintiffs
signed and the mistake was unknown to them therefore, did not affect the contract.
Hence, Despite Steve having made a mistake in terms of the price, he might have
to sell the car to Mary at that price because, the mistake did not affect the contract
as Mary did not know the price was a mistake.

JULIE

Rights
Julie expressed interest in buying the car at the corrected price of $25,000 and
indicated that she would arrange finance. However, no contract was formed between
Julie and Steve until she arranged finance and made an offer to purchase the car at
the correct price. In Gibson v Manchester City Council (1979), a man was interested
in purchasing a house from the City Council and several letters we exachanged in
aim it get to an agreement. When the plaintiff claimed a contract was made, It was
held that the letter which said the council may be prepared prepared to sell at a
certain price was merely an invitation to treat and open for negotiations but not an
offer (Gibson v Manchester City Council 1979). In reference to this case, Julie
cannot claim a contract was made and Steve was free to sell the car to another party

DAVE:
Rights
Dave offered to buy the car for the full $25,000 in cash and Steve accepted his offer.
A valid contract was formed between Dave and Steve. Under the common law, a
contract normally comes into effect where there is an offer that is accepted: Estate
Breet v Peri-Urban Areas Health Board (1955). An offer occurs when someone puts
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forward a proposal with the intention that if it is accepted, a contract will come into
existence. Therefore, Dave has a legal right to purchase the car at the agreed-upon
price.

Conclusion
In conclusion, Steve corrected his mistake by selling the car to Dave for the correct
price after informing Mary of the error. Mary does not have a legal claim against
Steve, and Julie's interest in purchasing the car was not legally binding until she
arranged finance and made an offer. Dave has a valid contract with Steve to
purchase the car at the agreed-upon price.

Reference List
C Elliot, &, F. Quinn.(2009). Contract Law (7th ed). Pearson Longman:London.

M. Charman. (2007) . Contract Law (4th ed). London: Wilan Publishing

Centrovincial Estates plc v Merchant Investors Assurance co Ltd (1983)

Estate Breet v Peri-Urban Areas Health Board 1955 3 SA 523 (A)

Gibson v Manchester City Council (1979),1 WLR 294 14, 15, 42, 378

Pharmaceutical Society of Great Britain v Booth Cash Chemists (Southern ) Ltd

(1953) IQB 401