Assessment instructions Evidence for this Learning Outcome

| October 14, 2019


Assessment instructions Evidence for this Learning Outcome is generated in Case Study 1, worth a total of 30 marks. All five questions should be attempted.  
You are required to support your answer where necessary with relevant case and/or Statute law.  
Case Study 1  
Read the following case study and answer all five questions that follow.   
Shona is a business student at University and she is approaching her final year exams. Shona is trying to catch up on some essential last minute studying and is seeking to buy books to help her prepare. She sees an advert pinned to the business school noticeboard of the faculty where she studies.  The advert reads:  
Business studies — text books — unused — happy to discuss what you need. Anyone who is interested please contact Raymond on 000111222.  Shona is very excited by this and immediately telephones Raymond. Shona tells Raymond that she wants to meet him and Raymond agrees to meet her at the refectory. When they meet Shona discovers that Raymond has three new text books but they are not for the subjects she is studying. Shona tells Raymond she does not want them. Raymond is very angry and says that she has wasted his time and train fare getting there and demands that Shona buys the books. Shona refuses and says that she wants business text books like the ones Raymond mentioned in his advert. Raymond says that he had some Business text books but that he had sold them by the time Shona called and that these are the only books he has left and that Shona must take and pay for them. Raymond states that he has studied business and that he and Shona have a contract between them and she must buy his books otherwise he will take a legal action for the value of the books, his train fare and for wasting his time. Shona states that she will take a counter action against Raymond for his failure to provide what he had offered.  
Shafiq owns a property business and he is seeking some advertising materials. He is searching online and discovers ADS-FOR-YOU who are a provider of advertising materials at a very reasonable cost. Shafiq sends an e-mail to the company making clear all of his requirements. The company responds quickly with an e-mail stating that they can meet all of his requirements but Shafiq is disappointed to read that the price is far more than what they appeared to advertise on their website. Shafiq decides not to buy anything from them and deletes the e-mail without replying to it. A few days later Shafiq is checking his e-mail and he sees that ADS-FOR-YOU sent Shafiq another e-mail that stated, ‘We are sure that you will be impressed by our products and prices,’ and, ‘If we do not hear anything from you within 24 hours we will take this as your acceptance and we will send the materials and charge you for the amount stated.’ Shafiq realises that this was three days ago and is now concerned about paying for something that he doesn’t want.  
Veronika has bought a large house that requires renovations. Once the repairs have been completed, Veronika intended selling the property at a significant profit.
 3 Final unit assessment Law of contract  
Veronika has, however, discovered that she does not have the finance available to carry out the renovations. A friend of Veronika’s family, Johnathon Harker, is a builder and he speaks to Veronika about her situation. Johnathon agrees to complete all the necessary work for Veronika.  
On completion of the work Veronika completes a document stating, ‘In consideration of you, Johnathon Harker, carrying out the renovations required, I agree to pay you £8,000 from the proceeds of sale of the house.’ Veronika sells the house at a considerable profit. Three weeks later Johnathon has not been paid for his work.  
Chung Lee is a property developer and he has been discussing the purchase of a very desirable piece of land near the city. Chung Lee has been meeting a representative of the developer, Katie Owen, to agree the terms of the potential sale. Katie is a new member of staff and is very keen to agree her first sale. Chung Lee and Katie have a final meeting where Chung Lee makes an offer of £1.5 million for the land. Katie enthusiastically agrees and proceeds to take note of all of Chung Lee’s requirements and details. Katie provides him with a bank account to transfer the money too. Chung Lee instructs his bank to transfer the funds and leaves the meeting very happy. Later that day Chung Lee is contacted by his bank to say that the money has been returned without explanation. Chung Lee calls Katie and angrily demands to know what is happening with his newly purchased property. Katie tells Chung Lee that the property is not his and that he has no entitlement to anything. Chung Lee is furious and tells Katie that he has already made plans for developing it and they have a binding contract between them. Katie again repeats that the property is not his and refuses to comment further.  
Ralpinda, Daphne and Ted are friends who share a flat together. They are redecorating and looking for new furniture. Ralpinda sees a television for sale on the website SELLYOUR-STUFF.COM and arranges to meet the seller at their home to view the TV. Daphne and Ted visit their local HOMEBUYS store where they see some furniture on sale. Ted sees a new large sofa on display that is reduced and appears to be a bargain. The sign on the sofa clearly states ‘Mahogany hardwood family sofa — end of season sale — £100.’ Ted and Daphne tell the sales staff that they want the sofa and they wait at the cash desk.   
At the cash desk Daphne sees a large sign that states ‘No refunds on any goods under any circumstances’. She points this out to Ted but Ted says to ignore it because HOMEBUYS are a reputable brand. Meanwhile, Ralpinda buys the TV and takes it back to the flat. Daphne and Ted arrive home with the sofa and with Ralpinda they all sit on their new sofa together to watch the TV. When they turn on the TV they find that the picture is very poor and that there is a very noticeable interference in the sound. As they sit there, they hear a loud cracking sound and realise that the sofa has broken in half. On closer inspection Ted finds a sticker on the leg of the sofa that states ‘100% plywood’ and not mahogany hardwood as advertised.  
Ted and Daphne return to the store where the manager points out the ‘No refunds on any goods under any circumstances’ sign and denies any responsibility for the sofa breaking stating that the sofa was for ‘decorative purposes only’ and wasn’t meant for sitting on. Daphne points out the label that was on the sofa that states ‘family sofa’ and ‘Mahogany hardwood’ but the manager ignores her and walks away. Meanwhile, Ralpinda has telephoned the man who sold her the TV and complained about it not working. Ralpinda says that she demands her rights as a consumer and to receive her money back. The man replied that it was second hand and what did she expect? The man adds that it was a private sale so she can’t do anything about it anyway.   
Question 1 a) With reference to the above scenario explain what would be required to create a legally binding contract between Shona and Raymond AND advise whether, in the scenario above, there is a contract between them. (5 marks)
 4 Final unit assessment Law of contract    
b) With reference to the above scenario explain the legal position of Raymond’s advert — is Shona correct in her assertion that Raymond must deliver what he has offered? (5 marks)  
Question 2 With reference to the above scenario advise Shafiq as to whether he must pay for the advertising materials. (5 Marks)  
Question 3 With reference to the above scenario and with reference to Statute where applicable, explain the rules of contract as it applies to Johnathon AND whether he is entitled to his £8,000.
Question 4 With reference to the above scenario advise Chung Lee as to whether he has a binding agreement with Katie meaning that the property is indeed his. (5 Marks)  
Question 5 With reference to the above scenario explain the legal effect of the ‘No refunds on any goods under any circumstances’ sign at the cash desk with regards to the sofa AND explain to Ralpinda what her rights are regarding the TV.

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