Chapter 7Introduction to the law of contractfor the party approaches, she finds that she has
taken on too much work for one person, so she
rings her customers on the afternoon of the
party to say that she will not be able to do the
catering after all.
Discuss the legal effects of these transactions.11 Arthur, the manager of Lookout Cars Ltd, asks his
young assistant, Terry, to look after the business
while he is away on holiday. It is an eventful week
for Terry.
(a)Early Monday morning Terry sells a second-
hand Escort to Doris. The car had been
advertised in the local press as follows:
93 (N) Ford Escort 45,000 miles. Blue
£1,500
Doris returns on Wednesday to tell Terry that
the Escort’s clock has been turned back and
that it has actually done 90,000 miles.
(b)On Tuesday, Terry finalises a part-exchange
deal with Mr Walker. Unknown to either of
them, Mrs Walker was involved, earlier in the
day, in a serious car crash while driving the old
car. The car is a ‘write-off’.
(c)On Wednesday, a man calls into the
showrooms introducing himself, falsely, as
James Dean MP. He agrees to buy a new
Orion car, but when he pulls out a cheque
book, Terry says that he is reluctant to accept
a cheque. The man then produces a pass to
the House of Commons as proof of his identity.
Terry accepts the cheque and the man drives
off in the car. Terry has just learned from the
bank that the cheque has been dishonoured.
The man sold the car to Pete, a university
student.
(d)On Thursday, Daisy, Lookout Ltd’s secretary,
puts a number of letters in front of Terry for his
signature. Terry is busy talking to the workshop
manager at the time and signs his name without
reading each one. He has now discovered that
one of the letters was an undertaking to act as a
guarantor for a £5,000 loan to Daisy by the
Midshires Bank plc.
Explain to Terry the legal position in each situation.
12 George is the owner of a confectioner’s shop in
Chorley, which is world famous for its unique
Chorley Chocolate Bar. The secret recipe for the
chocolate bar has been handed down by four
generations of George’s family. George himself is
a bachelor and, with no one to carry on the
business, he decides to retire and sell the shop.
After much careful vetting, George agrees to sell
the shop, including the goodwill and the secret
recipe, to Maria. As part of the contract George
agrees that:
(a)he will not engage in any form of sweet-making
in the whole of the United Kingdom for the next
20 years; and
(b)he will not reveal the secret formula for the
chocolate bar to anyone else.
Maria bought the business with the aid of a
20-year mortgage from Castletown Cocoa Co Ltd.
Maria has further agreed to obtain all her supplies
of cocoa from this company for the next 20 years.
After three very successful years in Chorley, Maria
hears that George is supplying Chorley Chocolate
Bars to shops near to his retirement home in
Bournemouth. About the same time, Maria is
approached by Cocoa Suppliers Ltd which offers
to supply all her cocoa needs at cheaper prices
than she is currently paying Castletown Cocoa
Co Ltd.
Advise Maria.13 Kevin is the owner of a small Hull-based firm,
which specialises in office removals. He operates
with two vans and three employees. He contracts
to remove two partners in a firm of accountants,
who are moving from their main office in Hull to
establish a branch office in Scunthorpe. To
minimise the disruption to office routine, the move
is to take place on a Sunday. What is the legal
position in the following situations?
(a)The Humber bridge is closed because of high
winds (the only alternative route is a much
longer and more expensive journey via Goole).
(b)As a conservation measure, the government
imposes regulations banning business traffic
from the roads on Sundays.
(c)Kevin takes on a house removal for the same
day. One of the vans fails its MOT on the Friday
and Kevin decides to use the only one available
for the house removal.
(d)Kevin and his three employees are taken ill with
influenza and are not well enough to carry out
the move.
(e)Kevin completes the removal except for one
filing cabinet which he did not have room for.
He refuses to make a special journey for it
because ‘it would cost too much in petrol’.263