SUGGESTED SOLUTIONS TO ASSIGNMENT 2

A Note to the Solutions

I expected you to go straight to the major issues raised in the questions. Unfortunately, most of
you were spending so much time on issues that were not relevant. Learn to be precise and to the
point.

I expected you responses to be straightforward and to revolve around the following

QUESTION 1

The question requires candidates to show understanding of the rules relating to formation of
contract.

a. The precise nature of Aine’s Advertisement. (4 Marks)

Offers must be distinguished from invitations to treat. Fisher v Bell 1961, Pharmaceutical
Society of Great Britain v Boots Cash Chemists 1953 and Carlill v Carbolic Smoke Ball 1893.
Aine’s advert at first appears to be an invitation to treat. However, the clear wording in
the advert makes it likely that it will fall under the exception in Carlill Case and Aine will
be liable to anyone accepting it.

b. Whether Thembisile has entered into a binding contract with Aine. (4 Marks)

To bring an agreement into the status of a contract the offer must be accepted either
expressly or impliedly. A contract will start when the acceptance is communicated to the
offeror except under the postal rule. Thembisile posting his letter would start the contract
and Aine would be bound if the postal rule is applied. However, the advert makes no
reference to the use of the post and seems to imply acceptance must be by receipt of
communication.

c. Whether Chimwemwe has any right of action against Aine (4 Marks)

Acceptance is complete if the terms of the offer are accepted unconditionally. Any new
terms introduced will be construed to be counter-offers, which are not acceptance but offers
in their own right. Chimwemwe’s attempt to pay by cheques would be a counter-offer as
Aine has asked for cash. Therefore, Chimwemwe would have no remedy.

d. Whether Davido has any right of action against Aine. (4 Marks)

An offer remains open until it is withdrawn or accepted. The offeror is not bound to keep
the offer open unless if there is a separate contract to do so. Davido cannot make Aine
keep the offer open unless he furnishes some consideration to make Aine keep the offer
open. This may be found in the fact that Davido wants to get a loan. If he is getting the
loan on the basis that Aine promised to keep the offer open, then Davido could have a
right of action against Aine.

e. Whether Aine has any right of action against Nigger T. (4 Marks)

 Nigger T has made an offer to buy Aine’s zebu for MK90,000 which Aine has accepted.
This would constitute a binding contract. Aine could sue Nigger T for breach of contract.
Aine can mitigate his loss by, for example, selling his zebu to Davido for MK75,000 and
suing Nigger T for the balance of MK15,000.
(Total: 20 Marks)

QUESTION 2

Advise Theresa. How, if at all, would your advice differ if Robert had changed his mind before
Theresa had started paying the mortgage?

Here you first need to consider the question of intention to create legal relations, bearing in mind
that this is a domestic agreement.
• Point out the presumption established in Balfour, and its rebuttal in Merritt, which seems
to apply here. Assuming that there is intent to create legal relations, has there been an offer
and an acceptance?
• It would seem that Robert made a unilateral offer, to be accepted by performance, in the
form of Theresa repaying the mortgage, so the question arises of whether such an offer can
be revoked once performance has started.
• As you know, the traditional assumption was that acceptance did not take effect until
performance was complete, but the opposite conclusion was reached in Errington v
Errington. This case seems to have clear application to the facts here and suggests that
Robert cannot revoke his offer unless Theresa stops paying the mortgage.
• However, if this is a unilateral offer, your advice might differ should Robert attempt to
revoke before the payments start, since an offer can be revoked at any time before it is
accepted, in this case by performance. If, on the other hand, the agreement was bilateral,
and Theresa made a promise to pay the mortgage in return for Robert’s promise to convey
the house to her, that agreement would become binding when the promises were
exchanged, and Robert’s offer could not be revoked afterwards.