Business Law
International Study Centre
University of Lincoln
LAW FOR BUSINESS
Summer Term 1 2013
ASSESSMENT ONE: CONTRACTS
Answer the following questions.
Q1. What is a contract?
Discuss the essential elements of a valid contract, the binding and enforceable nature of contracts, the factors that may make a contract void or voidable, and the contractual remedies available to the parties. Use relevant decisions of the court as examples to support your discussions.
The answer should be written in report format, with in-text referencing, Harvard style.
Q2. At 5:04pm on August 1, 2012, while negotiating the terms of lease of a small restaurant from Tom, Lee and Tom had the following discussions:
Lee: “I plan to open the restaurant very early in the morning and close it very late at night. Will there be any problems with me sleeping overnight in the restaurant?”
Tom: “No, there won’t be a problem.”
Lee: “Are you sure? It is very important to me that I am able to sleep overnight in the property. My house is very far away from the restaurant and if I can’t sleep there I will have a very long drive late every night and very early every morning. In fact, it is that important to me that, if I cannot sleep in the restaurant I will not sign the lease.”
Tom: “I’ve been the owner of the restaurant for the last ten years and I can assure you that there is no problem with you sleeping overnight in the property. I’ve slept there many times myself and there are no laws or rules saying that you cannot sleep there. You’ll be fine.”
Lee reviewed the lease before signing it and noticed that the lease contained the following statement: “The document titled ‘Additional Contract Terms for this Lease’, dated July 15, 2012, is hereby incorporated into and made a part of this lease contract.” Lee asked Tom for a copy of the document, but Tom said “I don’t have a copy now.” At 5:23pm on August 1, 2012, Lee signed the lease without having seen the document referred to.
One week later, on August 8, 2012, the City of Lincoln’s Health and Safety Inspector visited Lee’s restaurant and said: “I heard that you have been sleeping in the restaurant. The City of Lincoln’s Health and Safety Rules say that a restaurant can only be used for ‘food and beverage services,’ and specifically say that no one can sleep in the restaurant overnight. If I catch you sleeping in the property again, you will have to pay a £1,000 fine.”
The next day, August 9, 2012, Tom called Lee and asked him “Why have you not washed my car yet?” Lee said “What are you talking about?” Tom said “The document titled ‘Additional Contract Terms for this Lease’ says ‘Lee agrees that, in addition to paying Tom rent for the restaurant, Lee will wash Tom’s car one time per week for the next two years.’” Lee said “What? I didn’t see that document before I signed the lease and I never agreed to that! I am not washing your car!”
Lee has hired you as his lawyer. When you reviewed the lease, you noticed that the only thing the lease said about sleeping in the restaurant was: “The storage room of the restaurant has enough space to fit a small bed and the tenant can use it as such.”
Lee wants to know if he can successfully sue Tom for breach of contract. He also wants to know if he is contractually bound to wash Tom’s car.
Please advise Lee, making sure you fully explain your answer. Use relevant decisions of the court to support your answer.
To answer this question, identify the relevant issues, clearly state the rules of law applicable, apply the rules to the facts of the problem, and have clear conclusions.
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