Legal Issues

Question 1
I submit that there is a contract between Kath and Andrew because of the following reasons. First, there is an element of offer. Usually, for a contract to be considered legal, there must be an offer that should be accepted by both parties- Brogden v Metropolitan Railway co (1877) 2 APP Case 666. This is considered the root of any form of bargain. Since the offer is the basement of any form of transaction, it needs to be in reasonable detail. In other words, it should be clear and explicitly outline the terms and conditions related to the same. Notably, the contract between Andrew and Kath has a clear offer. Andrew offered Kath 3000 for the supply of food and drinks at his party. However, I suggest that there is no contract between the vendor and Andrew there is lack of a clear offer.

Secondly, the principle of acceptance is apparent in the contract between Kath and Andrew. Essentially, this is achieved when the person making the offer is assured that the terms are agreed to. This is often done orally, implied from the conduct of the accepting party, such as acting according to the requirements of the offer and in writing. The acceptance needs to be communicated to the person giving the offer and it can not be entirely inferred from silence- Felt house v Bindley (1862) 142 E.R. 1037. In this respect, Kath agreed to deliver the foods and drinks for the cost of 3000 and delivered the same as agreed. As such, she accepted to enter the contract.

Thirdly, the principle of consideration is also apparent in the contract between Kath and Andrew. In this regard, it is certain that there is a mutual benefit from this contract in the sense that while Andrew would receive the foods and drinks for his party, Kath would in return get the money. Legal studies ascertain that mutual benefit is exemplified through some right, profit, interest or benefit to both parties- Currie v Misa (1875) LR 10 Exch 153. Basically, a party is expected to enter the contract only if it pays a certain price. In this context, Andrew promised to pay Kath 3000 and Kath in return delivered the foods and drinks accordingly.

Fourth, the contract between Andrew and Kath exhibits an acceptable degree of the intention of creating a legal relationship that is enforceable. Regardless of the fact that Andrew and Kath are good friends and did not have a written legal contract, it is clear that the terms of their contract that are represented through the offer and acceptance  are clear and therefore according to the Trade Practices Act (1975), an intention of entering in a legal enforceable relationship is apparent. In addition, it is presumed that the contract has possible implications on both parties- Parker v Clarke (1960) All ER 93.

Question 2
I submit that there is a contract between John and Bill for the following reasons. First, the principle of offer is also well presented in the contract between Bill and John. Initially, Bill agrees to sell the car to his fried John at a cost of 90,000. Notably, this offer is well defined and both parties agree to this. Further, by agreeing to give John the first right to buy the car, it shows that both parties had agreed to the terms. The later contract between Bill and Andrew indicates that offers made in advertisements are not contractual- Partridge v Crittenden 1968 2 All ER 421. This is ascertained when Andrew offers 90,000 for the car.

Second, the principle of acceptance is also presented by the contract between John and Bill. John agrees to pay the 90,000 for the car although he requests to be given the fist right. Seemingly Bill is comfortable with the terms and accords John the right. However, Bill latter advertises the car for a higher prices. Bound by the previous agreement between him and John, he seeks his advice before selling the car. This shows that both parties understood clearly the terms and conditions of their contract. In addition, acceptance is also exemplified in the contractual relationship between Andrew and Bill. In this regard Andrew accepts the fact that there is a third party who has the first right to buying the car, irrespective of the price. He agrees to these conditions and goes a head to propose a higher price for the car. This shows that he had accepted the terms and conditions of the offer- Gibson v Manchester City Council (1879).  From the legal standpoint, Bill is working in line with the terms and conditions that bind both contracts.

Third, the principle of consideration is also manifested in the contracts between John and Bill and between Bill and Andrew. In the first contract, both Bill and John provide consideration if they wish to sue on the contract at any time. John promises to pay 90,000 and Bill presents the Ferrari car. Notably, there is a price of the promise of the other- Dunlop v Selfridge Ltd (1915) AC847. This consideration is also apparent in the second contract when Andrew commits 100, 000 in exchange for the car.

All parties presented in this context exhibit an intention to create a legal contractual relationship. This is exhibited by their clear offers and agreement to enter in to a contract. In the first case, the agreement between Bill and John has a clear offer that is acceptable to both parties. Further, Bill agrees to give John the first right to buy there car. Notably, the implications of the first agreement prevent Bill from selling the car to another party. In the second scenario, both parties also have a clear offer. Andrew agrees to pay the 100,000 that Bill advertised the car for. He agrees to the fact that there is a third party who has the first right to buy the car. Although he is disappointed when Bill fails to sell the car to him after consulting John, The Contract Review Act 1980 clarifies that he had agreed to all terms and conditions and therefore has no choice. Notably, the agreements have clear implications on all parties that are involved in a contract- Tanner v Tanner (1975) WLR 1346.

Consent is another principle that is manifested in the contract between Bill and Andrew. According to the Industrial Arbitration Act 1940, such a situation occurs when the arties in a contract have already reached a decision but the influence of an external factor destroys the basis upon which the decision was arrived at. In this respect, Andrew had agreed to pay the 100000 that Bill offered in the advertisement but he was not given the car because of the fact that John had first right to buy the car. Fair Trading Act 1987 and Sales of Goods Act s 9 describe such a situation as a mistake that has the capacity to nullify consent. In most cases, this occurs when an agreement is made on false assumptions. In this case therefore, it can be argued that the agreement between Bill and Andrew was made on a false assumption that John would not interfere with the agreement, regardless of the fact that the had been guaranteed the right of being the first buyer of the car.
Further, conformity with description is a principle that is manifest in this case. Usually, the seller is expected to provide a full description of the goods to the buyer before the buyer can purchase the same. This principle was based on the recognition that in some instances, the description of the seller did not fit the identity andor quality of the product. Considering the fact that Bill advertised the car to the public conformity of the product to the description was expected. The Trade Practices Act 1923, s 64 (5) ascertains that the principle is applied in cases where the identity rather than the quality of the goods does not match the description. In addition, Fair Trading Act 1987 indicates that the goods need to fit the purpose for which they are bought.

The buyer in this case relies upon the information provided by the seller to determine this fact. Therefore the seller is charged with the responsibility of providing factual information about the product to the buyer.
In order to attain this, Industrial Arbitration Act 1940 argues that the sellers need to ensure that their products are of merchantable quality. Again, this is determined by the description provided by the seller and the price accorded by the same. In such cases, the buyer also needs to be very keen to identify any defects during purchasing. This explains why Andrew had to inspect the car advertised by Bill before making a decision to buy the same.