DETERMINE WHETHER TONY HAS MADE A CONTRACT WITH SUPERSAVE SUPEMARKETS

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1 A] DETERMINE WHETHER TONY HAS MADE A CONTRACT WITH SUPERSAVE SUPEMARKETS.

Firstly to determine if Tony made a contract with supersave would be defining a contract. According to Beatson a contract is a “A legal binding agreement made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the others.”1 We have to look at the contexts of offer and acceptance, withdrawal of an offer, intention to create legal relations and also determine if there was sufficient consideration to amount to a valid contract.

We therefore look at the formation of a contract to determine how Tony came up to having a contract with supersave. The first aspect look at is ‘offer’ which is defined as “an indication by one person that he or she is prepared to contract with one or more others, on certain terms which are capable of being fixed at the time the offer is made.2 Therefore the offer that was made to Tony was collecting vouchers received through purchasing from supersave which would earn him ‘air miles’ that would qualify him to receive to a pair of air return tickets to France.

To determine how this came to being an offer we need to look at the case of Carlil v Carbolic Smoke Ball Co3, where the defendants advertised that they would pay £100 to any person who contracted influenza after using the smoke ball in the prescribed manner. This means that an offer may be made to one person or the whole world at large, this was the same with superasve who made the offer to everyone who might have read the advertisement in the national newspaper or seen it on television. The defendants argued that it was not commercial possible to make an offer to the whole world as this would enable the whole world to accept. This was dismissed by the court of Appeal when Bowen LJ stated that:

“ It is not a contract made with the whole world…It is an offer made to all the world .. which is to ripen into a contract with anybody who comes forward and performs the condition”4 Although this offer was open to anyone, it only made contracts with only those who actually performed the required act.

1 Beatson , Ansons’s Law of Contract 28th edn ( oxford university press London 2002) at p

2 Stone R, The modern Law of contract 6th edn (Cavendish publishing, London 2002) at p 25

3 [1893] 1 QB 256

4 Richards P, Law of Contract 6th edn ( Pearson, Longman London 2004) at p 15

This proves that Tony made a contract with supersave when he started making purchases and collecting vouchers as was specified in the offer. The issue of offer is affirmed by the decision held in Bigg v Boyd Gibbins Ltd.5 It was held that it was clear from the terms of the correspondence that the plaintiffs 1st letter constituted an offer of acceptance which constituted a binding agreement, and therefore a specific performance was granted.6 The terms offered by supersave became a binding contract when Tony started performing the required act by collecting vouchers in order to receive air return tickets.

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We also look at the means of communication used by supersave which led to Tony’s awareness of the offer. The offer was for the public at large and was placed in the national newspaper and television and amounted to a unilateral contract when accepted. There is a conditional promise in the form of air return tickets, which means that the advertisements by supersave was an offer which could develop into a contract if performance of an act is accepted. This is supported by the case of Johnson v Stoddart,7on which the plaintiff complied with conditions set on the offer by naming prize winners and posting his letter in Belfast before the deadline, decision held was that since he had complied accordingly a valid contract had been made. This was the same with Tony who accepted the offer by collecting the vouchers. It was supersave’s fault that they did not give a deadline on the presentation of vouchers, instead they deny Tony the tickets when they run out.

Acceptance of an offer is also very important in helping us to determine how a contract developed between Tony and Supersave. According to Treitel in Richards acceptance is

“final unqualified expression of assent to all the terms of an offer”8

Since this was a unilateral contract there was no requirement to communicate acceptance but performance of the specified act may be enough to amount to acceptance. This is illustrated in Carlill9where the point of law was to offer £100 to anybody who will perform these conditions, and the performance of the conditions is the acceptance of the offer.10

5 [1971] 2A11 ER183

6 Cracknell D, Cracknell’s Contract Companion 7th edn (Butterworths London 1989) at p 18

7 (1898) 33ILT 17APP IR

8 Op. cit no 4 at p 24

9 Op. cit no 3

10 The Digest,Annointed British, Commonwealth &European cases 12(1) 2001 3rd reissue ( Butterwothrs& co London) at p 172

This is what happened with Tony whom when he saw the advert / offer on the television, accepted it by purchasing from Supesave in order to get vouchers for air-tickets. There was no need for him to go and tell supersave that he was collecting the vouchers but just by shopping and collecting vouchers was a performance of an act which was valid acceptance of an offer.

On the other hand, supersave could have argued that they had a right not to accept Tony’s performance of act since this was a unilateral contract. This is because unilateral contracts do not really involve an agreement, but rather simple a promise which becomes enforceable once a certain condition is fulfilled, and the offeror is generally free to withdraw an offer at any point before it has been accepted.11 Therefore supersave would say they withdrew the offer before Tony accepted it by presenting vouchers to any of their branches. This is supported by the case of Petterson v Patterberg 12 , where the appeals court upheld that the defendant had a right to withdraw an offer to allow a reduction on a mortgage if it was paid before a particular date at any time before the tender of the payment was made.

However Tony would prove the validity of his acceptance by looking at the view taken by Lord Denning in Errington v Errington.13He upheld that although this was a unilateral contract, it could not be revoked once the couple entered on performance of the act, which they did by paying the instalments. This would mean that supersave had a contract with Tony, and had an obligation to fulfil which came into effect when he started collecting vouchers until he reached the required target of 1000. It seems that supersave rejected Tony’s acceptance of the offer by telling him that they had put an advert on the paper to say that the offer had been terminated due to great demand that exceeded their expectations.

We therefore need to look at the mode of withdrawal which was used by supersave so we can ascertain if it was done in accordance with rules of a contract, so we can prove that Tony has a made contract with them. The general rules concerning withdrawal of an offer according to Adams & Brownsword are “ an offeror cannot withdraw his offer once it has been accepted and that withdrawal of an offer is not effective until communicated to the offeree”.14

11 op. cit no 2 at p.56

12 (1928) 248 NY 86

13 [1952] 1 A11 ER 149

14 Adams and Brownword, Understanding Contract Law 4th edn ( sweet& Maxwell 2004) at p

Supersave actually breached this law by revoking the offer after it had accepted by Tony, when he started collecting vouchers. Also they did not withdraw the offer using all the same means of communication they used when advertising the offer. This is because Tony saw the advert on the television, but they only used the newspaper to withdraw the offer, which was not sufficient means to Tony since he could not read.

Decision held in Errington v Errington15 gives a good illustration on the withdrawal of an offer in a unilateral contract the same which Tony entered with Supersave. The widow had tried to posses the house after her husband died but the court ruled that there was already a performance of an act which had to be honoured and the offer could not be withdrawn at this stage. This was the same with Tony who had been collecting vouchers from January up to September which shows that all during that period he was performing an act. It could not have been evoked at the presentation of vouchers since it was already a contract. This was affirmed in Morrison steamship Co Ltd vThe Crown16 ,when Viscount Cave LC suggested that:

“When work is done and expense is incurred on the faith of a conditional promise the promisor comes under an obligation not to revoke his promise and if he does so he may be sued for damages”

The other important aspect to help us prove that Tony had made a contract with supersave is the issue of intention to create legal relations. Although advertisements are commonly not viewed as offers, however the conditions specified by supersave shows that they were willing to enter into contracts with only those who perform the condition of act. Tony did actually perform the condition by collecting the vouchers but only lost out when the tickets ran out.

The last aspect to look at to determine if Tony had made a contract with supersave is consideration, which in Thomas v Benjamin Thomas18 was defined as being something of value maybe of some detriment to the plaintiff or some benefit to the defendant. In Carlill for example, the plaintiff faced the detriment of having to pay for the smoke ball as well as catching the influenza.

15 op. cit no 13

16 (1924)20 L1 LR 283

17 op. cit no 1 at p.53

18 (1842) 2QB 851

The beneficiary was carbolic who are likely to have increased their sales when they promised £100 to those who purchase the smoke ball and catch flu. We find consideration here as Tony faced detriment through taking his money to buy from supersave and all the time and effort he took to collect the vouchers. Supersave was the benefactor because they are likely to have increased their sales during the period they ran this offer.

All the above discussed issues prove that Tony had made a contract with supersave supermarkets, although it will be entirely up to the courts on how they apply the law to have a final determination.

B] ASSUMING THERE IS A CONTRACT BETWEEN TONY AND SUPERSAVE SUPERMARKETS , WHAT REMEDY/ REMEDIES WOULD BE AVAILABLE FOR BREACH.

As we have taken into consideration that Tony had made a contract with supersave, we therefore consider what remedies were available for breaching this type of a contract. Remedies are generally damages or compensation for the breach of contract. Tony could enforce compliance of specific performance but this remedy will only be available at the discretion of the court. In common law, damages are available as of right and are not limited to circumstances where a party to the contract suffers loss because of the breach.1 For Tony to recover damages he suffered will entirely depend upon circumstances which led to his loss which we are going to look into now.

First remedy for Tony would be to place him in the same position as if the contract had been carried out. However, his claim could not entirely succeed if he goes ahead with this type of a claim since he did not experience any loss of bargain or loss of profits. He could use reliance which is based upon claiming for expenses incurred during the performance of the contract. Tony had to use his money for nine to make purchases from supersave until he reached the target of 1000 vouchers. He has a right to claim damages because supersave breached the contract at the last minute. This is affirmed by the case of Anglia Television Ltd v Reed2 ,when at the last moment the defendant withdrew from the contract forcing the plaintiffs to abode the whole project. The court allowed the claim for expenditure incurred during the preparation of the project. Therefore supersave had to

1 Richards P, Law of Contract 6th edn( Pearson, Longman London 2004) at p. 333

2 [1972] 1QB 60

compensate Tony, taking into consideration of all the money he had spent on purchase only to miss out at the last minute.

Tony could also had a remedy for distress and disappointment which is supported by the case of Jarvis v Swann tours3 , where a plaintiff upon seeing a brochure booked a holiday only to find out that advertised facilities were not available. It was held that the plaintiff was entitled to compensation for loss of entertainment and enjoyment, since he had booked the holiday upon good faith when he saw the brochure. This was the same with Tony who had seen the advert which prompted him to perform the act for 9 months but only to be denied air tickets at the completion of the contract which was a breach.

However on the nature and circumstances of his case there were not many remedies available for breach on which he could claim compensation.