THE LAW SCHOOL Postgraduate Coursework Assignment MARK/GRADE FOR UNIVERSITY USE ONLY Rcvd: Student No.
1712247 Name: Muhammad Farhan Address: P.OBOX 285145 Riyadh,Saudi Arabia-11323 DATE DUE: 1PMon 8th January 2018 (UK Time) COURSE: LLM/MSCConstruction Law and Arbitration MODULE: BSM743:Law of Obligation and Evidence TUTOR : Mr. Olayinka Lewis Mode of Attendance FT PT Yr1 PT Yr2 DL X I Confirm (a) That the work undertaken for this assignment is entirely my own and that I have not made use of any unauthorised assistance.
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Academic Regulations can be viewed athttp://www.rgu.ac.uk/academicaffairs/quality/ FOR UNIVERSITY USE ONLY Question:Sean,the Sales Director at BIMSoft, is approached by Will, the project manager ofNewDay Construction Limited (ND) who explained that ND has submitted a numberof bids for projects which require the company to be fully compliant with theBuilding Information Modelling (BIM) Level 2 and ask Sean to quote a price forthe installation of BIMSoft’s ‘state-of- the- art’ BIM Generation andManagement software. Sean, eager to reach his monthly sale’s quota, replies: ‘Iam sure that for a business of your size and the likely prospects of futurebusiness we can guarantee a price of £10,500 covering installation cost andappropriate staff training.
I can only hold that price for a week’. Laterthat day, Will receives an advert by email from AutoBIM Ltd which states: ‘Wecan offer our “cutting edge” BIM software for contractors seeking to be BIMLevel 2 compliant at a price guaranteed not to exceed £9000’. Will immediatelytelephones AutoBIM and places an order. However, after discussing the matterfurther with one of the technical staff of AutoBIM, it becomes apparent thatthe actual cost of installation will exceed £12000. Will thereupon withdrawshis order. Nextday, Will telephones BIMSoft. He leaves a message on the answering machineaccepting the offer of £10,500 made by Sean, at the same time asking whetherthe cost could also include on-site training for any new staff ND will recruitwithin six months of the commencement of the contract.
Subsequently, Will isunsure if he is making the right decision and telephones BIMSoft to cancel hisorder. The secretary on duty informs Will that she has passed on all therecordings on the answering machine to Sean, who will be listening to themshortly, but that she will make a note of his withdrawal wish. Inthe meantime, BIMSoft has a system which triggers automatic messages to theirengineering team when an order is placed.
The team will usually then visit thepremises of the customer for a preliminary check on the suitability of thepremises for installation of the software. This routine is followed soon afterWill’s order is placed. Whilst waiting in an adjacent car park, Vishnu, one ofthe engineers of BIMSoft, left a toolbox close to the entrance of a pedestrianwalkway. Sarah, a twenty year old University student on holidays who livesnearby tripped on the toolbox, fell awkwardly and injured her right ankle,shoulders and neck. Whilst being transported to the Hospital, Sarah sufferedadditional injuries to her ribs due to the hard padding on the stretcher andthe ‘bumpy ride’. Initial assessment of medical experts taking care of Sarah isthat she will need at least three months recovery time. Sarah is a member of aprofessional football team.
She will neither be able to complete her secondsemester school work at the University nor play in her football team for thenext few months. (a)Advise Will whether he has concluded a contract with BIMSoft and or AutoBIMand, if so on what terms? (Weighting: 55%) (b)Identify and address the various tort-related issues in the above scenario andadvise Sarah as to her potential legal claims. (Weighting: 45%) (NB: Pleasefocus only on the legal issues. Also remember to consider counterarguments,where necessary, before drawing conclusions). Answer (a): 1,941wordsTheadvice to New Day Construction (hereafter will be referred as ND) consideringthe facts of current scenario should essentially answer a similar question ofconcluding a legal binding contract but with two different parties. Issue ofterms upon which the contract/s has been concluded is important but issecondary as it will be superfluous to discuss them in absence of a legalbinding contract.
Facts are pointing the area of law and governing rules to beanalysed regarding formation of contract which is elementarily based on an offer,acceptance, consideration, legal capacity and intention to create legalrelations. Differing events and happenings with BIMSoft and AutoBIM Ltd. (hereafterwill be referred as AutoBIM) clearly demands somewhat similar but separate analysisof legal issues and possible counterarguments to reach conclusion.
Anadditional liability may exist by virtue of timing if in case ND forms contract/seither as mutually exclusive events or non-mutually exclusive events. Asapplicable legal jurisdiction is not clearly mentioned, any advice should coverboth the law of England and Wales (hereafter will be referred as E) andScotland. Generally this area of law is not much different in bothjurisdictions hence advice will explicitly cover only varying aspects. Thefirst stage in contract formulation is to answer few basic questions like whetherthere exists an offer? If ‘yes’ then probing the character whether it is a unilateraloffer or mere an invitation to treat? Whether offer has been communicated andhow it was communicated? Is there an attempt for revocation of that offer? If’yes’ was it successful? In Law an offer is an expression of interestfrom one party to another with terms either fixed or capable of being fixed atthe time offer was made and hence it just requires an acceptance to create alegal binding contract.
1 Aninvitation to treat is a pre offer or pre contract communication which fallsshort of an offer and is meant to open the negotiations instead of making anoffer.2 Advertisementsare usually considered as invitation to treat but occasionally they tantamountto a unilateral offer.3 Firstlyan advertisement amounting to a unilateral offer is actually an offer to thewhole world and secondly depending on how it has been written or published itsometime waives the requirement of acceptance and acceptance is being donethrough the performance, further such an offer cannot be withdrawn whileperformance is underway.4 Whereconstruction is required by the court to distinguish between an invitation totreat and an offer courts apply principle of party freedom (where advertiserhas right to reject a party responding) or principle of promisor objectivity (determinationof context and intention of advertisement with practical and commercialconsequences of deciding it as an invitation to treat or an offer).5 Whileapplying above ND approaching to BIMSoft was clearly an invitation to treat andBIMSoft reply was an offer with defined terms of price, covering installationand appropriate training. On the other hand AutoBIM advert while consideringits wordings ‘we can offer’ makes it crystal clear that it was an invitation totreat leaving no room for a counter argument by AutoBIM to consider it as a unilateraloffer.
AutoBIM counter argument if put forwarded will be requesting court toconsider promisor objectivity (party freedom is out of question as naturallyAutoBIM will be wishful to have business with ND) to construe their act asunilateral offer. It will definitely fail when court will determine the intentas wording “we can offer” is clearly showing intention of mere invitation. ConsequentlyND reply through telephone to AutoBIM placing order will be regarded as ND’soffer and under the light of available facts it is based on same terms asproposed by AutoBIM in their invitation to treat. Communicationof an offer (which is not a legal issue here) is important and as per law therewill be no contract if it has not been done properly.6 Communicationis of significant importance in case of revocation of an offer. Legal principleis that any offer is open for revocation before its acceptance provided thatrevocation has been communicated properly and receipt is mandatory to make iteffective7.
Revocationcan be done either by the offeror, a reliable third party or by implication(Counter offer or Second offer from original offeree).8Timing has great influence on outcome. While applying above to the scenario, Will’scommunication with AutoBIM staff making him realized that actual work cannot becompleted within the amount offered to AutoBIM and Will’s subsequent withdrawalof order is actually revocation of his offer. This revocation will besuccessful if there is no counter argument and this will infer that no legalbinding contract has been established between ND and AutoBIM. As explainedearlier that discussing the terms is superfluous in absence of a legal bindingcontract. Thoughremote, but AutoBIM can counter argue the receipt of revocation and in thatcase ND has to produce evidence to successfully rebut this counter argument. IfND fails to rebut this counter argument this will indicate that ND’s offer isstill open for AutoBIM to accept and upon acceptance there will be a legallybinding contract upon same terms as indicated by Will in his offer (which infact are same as per invitation to treat by AutoBIM).
Under the light ofcurrently available facts ND is advised in their best interest to ensure thatrevocation has been completed successfully, if not yet they should immediatelyaccomplish the same by using the fastest mode of communication considering thatpostal rule (communication is considered as delivered/effective upon posting) isnot applicable for revocation of an offer. TheSecond stage in contract formulation is to verify acceptance. General questionswhich require answers here are; is offer valid or lapsed at the time acceptancereached to its effectiveness? If ‘yes’ is acceptance in line with the terms of subjectoffer? If “No” then can it be treated as a counter offer or just an inquiry? Howacceptance has been communicated and when it gets effective? Is there anattempt to retract the acceptance before it gets effective? Thecharacter of Acceptance should be such that it should reflect or mirror anoffer in its entirety in general but its terms in particular. It can acquireany desired form unless explicitly stipulated in the offer otherwise.9 Atime bound offer will lapse and will not remain open for acceptance after itsexpiry.10 Ifan offeree accepts an offer in principle but inserts a new term or replace anexisting term then this act in law will be treated as counter offer.11 Acounter offer must be distinguished from an inquiry or request for informationwhere the offeree’s intention is only to clarify a term or to negotiate for abetter available option for a term while maintaining the essence of the term.
12 Methodof communication for acceptance usually raises issues where it essentiallyrequires determining that at what point in time acceptance has reached itseffectiveness, at what place (sender country or receivers country) it getseffective and whether it gets effective on physical receipt disregarding to thefact that is has not been read, listened or understood by the receiver13. In EntoresLtd v Miles Far East Corporation receipt rule has been adopted by the courtfor telex being analogues to the simplest model of communication between twopersons, but in Entores the question was ‘place’ not the time which isthe subject matter here14. InThe Brimnes though the communication was not acceptance rather it was anotice of withdrawal but it was held that it was effective when received atrecipient telex during office hours disregarding the fact that it was read the nextday.
15 Retractionof acceptance is possible before acceptance gets effective. While applyingabove to the scenario, Firstly there is no question of offer expiry as Seanoffer was valid for a week and all what happened was just next day. Secondly, Will’smessage on answering machine accepting Sean’s offer can be viewed both waysi.e.
an acceptance with inquiry of a term already existed in the offer(Appropriate Training) or a counter offer where the offeree is enhancing a termof an offer. There is a problem with latter argument due to the wording ‘at thesame time asking whether’ giving rise to an inquiry/clarification rather than aproposal. It will remain a matter of construction for courts during litigationto decide between a counter offer and inquiry. If it’s decided to be an inquiry/clarificationthen Will’s message on answering machine will not be regarded as acceptance asheld in Stevenson v Mc Lean. It will amount to rejection of an offer evenupon effective physical delivery on answer machine system (disregarding whetherit has been listened or not). Thus a legal binding contract will not beestablished between ND and BIMSoft while the offer will still remain openfor Will to accept. On the contrary if its decided as counter offer then againthere will be no legal binding contract between ND and BIMSoft unless Sean provides an acceptance to Will’scounter offer which is still open for BIMSoft to establish a legal bindingcontract on Will’s terms. Alternatively Will can also send a revocation of hisoffer before Sean’s acceptance.
If Stevensionv Mc Lean is not applied by court during litigation and Willsattempt on answering machine is regarded as acceptance by the court then therestill remains analysis of issues related to time at which delivery ofacceptance was made and Will’s attempt of retraction of his acceptance. In thelight of legal principles explained above it does not matter that whether Seanhas listened to Will’s note on answering machine, what matter is whether Will’snote has been delivered to Sean’s answering machine to make acceptance aseffective. By the time Will has established the call with Sean’s secretary toretract his offer, it appears that messages on answering machine have beenreceived at BIMSoft and have been provided to Sean for listening indicatingthat a legal binding contract has already been established between ND andBIMSoft on terms of original offer given by BIMSoft. There is a remotepossibility if somehow message sent by Will has not been received in BIMSoftanswering machine system at the time when Will has established call with theSecretary and has communicated his retraction of earlier acceptance.
In thiscase retraction will be successful as secretary being the qualified 3rdparty and this will not result in a legal binding contract between ND andBIMSoft. An expert witness may be required by the court during litigationto evidence answers to the questions like when Will’s message was exactlyreceived in BIMSoft answering machine system? When exactly Sean has listened to Will’s message? At what point of timeWill has established call with secretary to retract acceptance? Etc. Theremay arise in an issue of enforceability of a contract after successful formulationif it can be evidenced that intention to create legal relations does not exists16. Thiscan be a counter argument raised by any party who wish to oppose the contractif it has been legally formulated.
Legally commercial agreements are those inwhich any one party acts in its commercial capacity and to such an agreementlaw applies a very strong presumption in favour of intention to create legalrelations, unless contrary is proven17. Thispresumption will successfully apply on the scenario as all parties acted intheir commercial capacity. Any argument opposing the presumption will fail ascontrary cannot be proved.18 Answer (b):1350 wordsTheadvice to Sarah for her potential legal claims requires a succinct analysis ofrelevant tortious principles and potential counterarguments. BibliographyTheadvice to 1Gibson v Manchester City Council 1979 1 WLR 294; GardGjensidig v International Oil Pollution Compensation Fund2014 EWHC 3369 (Comm); J Poole Textbook on Contract Law (12th edn,Oxford 2014) 36; R Stone The Modern Law of Contract(11th edn, Routledge 2015) 37.
2 Fisher v Bell 1961 1 QB394; Partridge v Crittenden 1968 1 WLR 1204; R Stone The Modern Law of Contract (11th edn, Routledge 2015) 38.3 Carlill v The Carbolic Smoke Ball Co. Ltd 1893 1 QB 256.
4 Errington v Errington & Woods 1952 1 KB 290; Chris Turner, Key Cases Contract Law (2nd edn, HodderEducation 2011) 15 Partridge v Crittenden 1968 1 WLR 1204; Harris v Nickerson(1873) LR 8 QB 286; R Stone The Modern Law of Contract (11th edn, Routledge2015) 44.6 Taylor v Laird (1856) 25 LJ Ex 3297 Routledge v Grant (1828) 4 Bing 653; Byrne v Tienhoven (1880) 5CPD 344. 8 Dickinson v Dodds (1876) 2 ChD 463; Henthorn v Fraser 1892 2 Ch 279 Manchester Diocesan Council of Education v Commercial& General Investments Ltd. 1970 1WLR 241.10 RamsgateVictoria Hotel Co. Ltd v Montefiore (1866) LR 1 Ex 10911 1984 SLT 100; Hyde v Wrench 1840 49 ER 13212 Stevenson vMcLean (1880) 5 QBD34613 R Stone The Modern Law of Contract (11th edn,Routledge 2015) 66.14 Entores Ltdv Miles Far East Corporation 1955 2 QB 32715 The Brimnes 1975 QB 92916 R Stone The Modern Law of Contract (11th edn,Routledge 2015) 141.
17 Parker v Clarke 1960 1 WLR 286; Merritt v Merritt 1970 1 WLR 1211 (Non CommercialAgreements)18 Rose and Frank Co. v J R Crompton & Bros 1923 2 KB 261; 1925 AC 445