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Case study 1
Samir
sees
a
set
of
golf
clubs
displayed
in
a
shop
window
for
?
500.
He
enters
the
shop
and states he will take the clubs. The shopkeeper
however says the clubs are no
longer
for
sale.
Samir
is
demanding
that
he
be
sold
the
clubs
and
at
the
price
displayed.
Identify the essential requirements of
a contract and discuss whether a contract exists
here.
A contract
is an agreement between parties having the
capacity to make it, in the form
demanded
by
the
law,
to
perform,
on
one
side
or
both,
acts
which
are
not
trifling,
indeterminate,
impossible or illegal, creating an obligation
enforceable in a court of
law.
A
valid
contract
has
three
essential
features:
there
must
be
a
agreement
on
all
material aspects; at
least two contracting parties and legal
obligations.
A contract consists of an
offer and an acceptance. If there is no offer in
the first place
then there can be no
contract. The basic elements of a contract include
an offer
and
an
acceptance.
In the case Samir sees a
set of golf clubs displayed in a shop window for
?
500. He
enters the shop and
states he will take the clubs. But shopkeeper says
the clubs are no
longer
for
sale.
Samir
is
demanding
that
he
be
sold
the
clubs
and
at
the
price
displayed.
According to this case we can say that
these is not exist a contract. In the case that a
set of golf clubs are exhibited in a
shop window, thus it is not an offer. Because the
goods displayed in a shop window as a
invitation
to treat, we can
know that goods
displayed
in
a
shop
window
(even
when
priced)
are
classed
as
a
willingness
to
negotiate on the shops part.
Invitations to treat also is considered to inquiry
the price
of goods, means a party to
invite the other person to make offers. Different
an offer, a
willingness to negotiate
only as prepared to make a contract of behavior on
the issue
who is not legally binding.
The customer will make the offer to buy the goods
which
the
shop
are
perfectly
within
their
rights
to
refuse.
The
invitations
to
treat
are
not
legally classed as
offers and therefore cannot be accepted.
Before
the
party
who
gave
off
the
invitations
to
treat
could
not
accept
the
other
people
’
s offers
they
can
revocation, and
then the contract
is
not
build. When Samir
asked to
buy the golf clubs the shopkeeper refused hin, and
there was no acceptance.
So when the
shopkeeper refused Samir which is a set of golf
clubs are not the good
for
sale,
it
just
be
used
as
ornament,
and
attracted
the
consumers
interested.
So
an
offer in
this case is not found, either nor acceptance.A
contract consists of an offer and
an
acceptance, we can know that there is on offer and
there is on contract.
Case
study 2
Tom
is
the
top
salesman
for
ABC
Motors.
He
has
been
offered
a
job
by
a
rival
company but is concerned because there
is a clause in his contract which prevents him
from working for any other car company
for five years.
Tom is the
top salesman because he regularly tells potential
customers what they like
to hear rather
than the facts. He has done this in relation to
ages of vehicles, odometer
readings and
vehicle service histories.
Tom
recently
completed
a
deal
to
buy
a
vintage
sports
car
for
ABC
Motors
from
now
discover that Barry (not his real name) had stolen
the vehicle.
Question 1
What
is
a
restrictive
covenant?
Advise
Tom
as
to
the
legality
of
the
clause
in
his
contract.
You can refer to Bluebell Apparel Ltd v
Dickinson (1980) on page 146
Question 2
How would you
classify Tom
’
s statements to
the customers and what are the possible
consequences for Tom and ABC motors in
relation to these statements?
You can refer to Smith v
Sim(1954) on page 161
Question 3
What
is the legal position with regard to the vehicle
which Tom has purchased from
Barry?
You can refer to Morrison v
Robertson(1908) on page 153
1
Restrictive
covenant
is
a
agreement
which
restrict
the
party
liberty
to
work
and
trade.
Such
contracts are VOID
unless the restriction can be shown to be
reasonable to both parties involved
and
to
the
general
public.
There
are
three
types
of
restrictive
covenants:
contracts
between
employer
and
employee,
contracts
between
sellers
and
purchaser
of
a
business
and
‘
solus
’
agreements. For all
three types, the party attempting to enforce the
agreement must prove that it is
reasonable to both parties concerned
and to the general public. If they are unable to
do this then
the
contract
will
be
considered
void
and
unenforceable.
(from
the
text
bookP142-142)
This
contract are legality, and the
restriction was fair in this contract. Because the
relationship of Tom
and ABC motor is
employer and employee, when enter employment and
employee may agree to
some restriction
being placed on his future employment or trade.
Later the employee may feel the
restriction
is
unfair
and
therefore
he
may
break
it.
In
such
circumstances
it
would
be
up
to
the
employer take him to court and seek an
‘
interdict
’
forbidding the employee to break the
agreement.
They
will
consider
the
factor
the
nature
of
the
job
the
employee
was
doing(from
the
text
book
P142).
If
Tom
worked
for
any
other
company
within
the
validity
period
of
the
contract
that
he
would be in a position to harm his ex
employers.
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