Need some help with Business Law assignment!

Hello

I am doing Business Studies, and as a part of my course I am doing Business Law. I am a little bit confused, because the subject is completely new to me. Could you please help me with the following:

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Marks Furniture Ltd. manufacture office furniture, which they, sell to a small number of retail outlets. The company has recently decided to end production of one particular type of desk, the 'Nme 106 4-drawer' - and to 'clear out' the 12 desks which remain in stock in the warehouse.
Consequently, on 1 February, the Sales Manager sent a copy of the following letter to the company's four major retail customers:

1 February
Dear Sirs,
RE: 'Nme 106 4-drawer'
Please be advised that we are ending production of the above model. We have twelve desks remaining in stock and in order to clear this line we are prepared to offer them at the reduced price of £270 (plus VAT) per desk.
This special offer will close at the end of the month. I hope to hear from you shortly.
Yours faithfully,

This was a particularly attractive offer as the usual trade price for each desk was £450 (plus VAT) and the recommended retail price was £595. Barr Office Equipment received a copy of this letter on 3 February and replied the next day as follows:

4 February
Dear Sirs,
RE: Nme 106 4-drawer
Thank you for your letter of the 1st February. We would be pleased to take all 12 desks at the price mentioned by you, on the assumption that you will be responsible for delivery as per our usual arrangement.
Please deliver by no later than next Friday and invoice us accordingly.
Yours faithfully,
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-Is the letter sent by Marks Furniture Ltd. an offer or an invitation to treat?

-Is there a contract for sale been established between Barr Office Equipment and Marks Furniture Ltd?

I have read so many cases, but still can't really tell the difference.

Thank you.

Greetings!

First let me preface my answer by saying that I only have experience with U.S. law. However, basic principles should remain fairly much the same when it comes to the essentials of contract law. The best way to answer questions like this is to remember the elements involved. What constitutes an offer? The offeror must express willingness to contract on certain terms, made with the intention that it become binding as soon as it is accepted by the offeree. If it the offeror simply indicated a willingness to accept bids, it is not an offer. Here, you have the words "we are prepared to offer them at the reduced price of £270" which is probably more of a notification of willingness to sell at a certain price. Even if it were an offer, one could argue that a contract was not made because, the "acceptance" was not a mirror image of the "offer." Additional terms, "on the assumption that you will be responsible for delivery" and "Please deliver by no later than next Friday" were added, which were not part of the original offer. (Although the fact that delivery was a "usual" part of their contracts adds another issue; if it is always part of the deal, an argument could be made that it is therefore not an "additional" term.)

When answering legal questions, the main thing is to be able to support your position with a logical argument. I think you could make a good case for the first letter being an ITT because of the language "we are prepared to offer" and that therefore there was no contract; I'd then solidify your position by mentioning the non-mirroring terms of the purported "acceptance."

Good luck!

Thanks,

Sarah, EssayForum.com

Thank you very much Sarah! I reposted again to the forum, sorry my mistake, I thought my first post was deleted or something like that. Thank you again for you help :))

You're very welcome!

Sarah

I would like to ask you one more thing.
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Barr Office Equipment, were the first to reply on the "offer" by mail the very next day, which creates a contract between them, and the Marks Furniture Ltd. before receiving that letter, have sold the desks to another retail shop. When they received a letter, stating that the desks have been sold, were annoyed because they were confident that they were going to sell the desks to their customers and have already paid 200 pounds for an advertisment to a local newspaper. Resulting in Barr Office Equipment demanding some compensation from Marks Furniture Ltd. which denies that this is in any way liable.

1 - If a contract does exist, what remedies are available to Barr Office Equipment?

2 - If a successful claim were made, what damages could be recovered by Barr Office Equipment?
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I have understand so far that that Barr Office Equipment can: 1) Repudiate the contract for breach of a condition by the seller, which entitles Barr Office Equipment to damages or 2) Waive the breach and elect to treat it as a breach of warranty in which they can sue for damages. After that point I got really confused... Any help on these two questions Sarah? :)
I have looked through a few cases on damages, but could not find any case with similarities to this one.

Thank you for your time...

Greetings!

(With the usual caveat that I am only familiar with American law :-))
If I understand all the facts correctly, I think you may be a little confused about your #1, "Repudiate the contract for breach of a condition by the seller, which entitles Barr Office Equipment to damages." Perhaps "condition" is not the term you mean?

In the law, there are two types of conditions with regard to contracts: conditions precedent and conditions subsequent. A condition precedent is a provision of contract that keeps the contract from coming into effect unless or until a certain event takes place. For example, in a real estate contract, the buyer must be approved for financing before the sale can go through.

A contract may be frustrated on the occurrence of a condition subsequent. For example, a farmer contracts to sell his cow, but the cow dies before the sale can go through.

Your #2 is also inapplicable. A breach of warranty is an entirely different thing which I won't go into here.

Let's look instead at "remedies." What are the remedies available for breach of contract? Barr can sue for the damages it suffered due to Marks's breach. Remedies available for breach of contract include money damages and specific performance. However, specific performance is only available if money damages will not adequately compensate for the loss; it is limited to particular circumstances such as sales of unique items and real estate. Barr's best remedy is money for the damages it suffered. Barr may also be able to get its attorneys fees and costs paid if it is the prevailing party (depending on the law in that jurisdiction).

So, what did it suffer? Barr lost the money it paid for the advertisement; this is a direct loss. Barr also lost the profit it would have made on the sale of the furniture. It could sue for this loss of profit as "consequential damages." These are awarded when the loss is foreseeable. Since Marks knew Barr wanted the furniture for the purpose of re-selling it, this loss is foreseeable.

Generally speaking, law teachers like it when you discuss not only the correct answer, but the incorrect one and tell why it is incorrect. You may get extra points for doing this. (Can you tell I used to teach Business Law? :-))

Good luck!

Thanks,

Sarah, EssayForum.com

The only thing I can tell is that YOU ARE TOO QUICK! :)) I have taken into consideration everything you said, especially the last thing about mentioning not only the correct answer but also the incorrect one and justify why it is incorrect. I cant really express how thankful I am. I really appreciate your time and effort to answer my questions, you have been really helpful. If you ever come to Greece, I am buying dinner definately! (This is an offer, not an invitation to treat! :pP)

Thanks.

LOL!!! You made my day!! So glad I could help!

Sarah