Question 1
Josie makes a living painting watercolour pictures and selling them from her studio located in her house.
On Sunday 19 February, Sam visits her studio and admires a painting of sunflowers. The price tag indicates it is for sale for $900. Sam offers Josie $700 for it, but Josie says that she cannot accept less than $800.
Sam indicates that would be a good price but asks Josie to hold the painting so his wife could also look at it and approve his decision. However, Sam points out that the earliest his wife could do so would be the following Tuesday, 21 February. Josie said that would be fine and gives Sam a form that reads:
I, Josie, offer to sell Sam one framed picture of sunflowers for $800. This offer shall expire at midnight on Tuesday 21 February.
Signed: Josie
The following day, Monday 20 February, Wendy, an art enthusiast, visits Josie's studio and is very impressed by the same painting. Without haggling over the price, she buys the painting for $ 900 cash and takes it away with her.
The same day, Josie phones Sam and leaves a message on his answering machine saying that the painting has been sold for $900. Sam does not return the call, apparently unable to retrieve any messages due to the machine being faulty for the past few days.
On Tuesday 21 February, Sam told his wife about the painting and she is very enthusiastic about it. She tells Sam to go ahead and buy it for $800. At 10 am that day Sam telephones Josie and after only managing to greet her, he is cut off as Josie's telephone goes dead due to a flat battery. Sam is unable to continue the conversation and Josie does not attempt to call him back. Instead, an hour later, Sam decides to post a letter to Josie formally accepting Josie's offer. The letter arrives in the mail at Josie's house on Thursday, 23 February.
Required
(i) Advise Josie whether there is a binding contract with Sam.
(ii) For the purpose of this part only, assume a contract had been formed between the parties. Explain briefly whether a breach of contract has occurred and identify the remedies that might be available.
( In answering this question, address all the events that have occurred, describing their legal status or significance. Use IRAC format. Maximum 1,000 words)
Question 2
The rule in Pinnel's case expresses the requirement for consideration in simple contracts. Generally, the rule works sensibly and fairly, but there are some situations when it does not.
Discuss this statement, and explain the circumstances in which courts see it as unfair to apply this rule.
( Answer in essay format: maximum 1,500 words)