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The question poses whether or not there was a perfected contract of sale following an option contract given to Lisa by Harold by virtue of the substantial negotiations. The offer contract was made to Lisa on a telephone call on 2nd April. This satisfies the offer requirement of the element of contract and what awaits the relations is the acceptance of the other party. My stand is that there is a perfected and binding contract between Harold and Lisa and thus the latter can hold Harold for specific performance and damages.
There are two contracts to talk about on the case at bar. There is the option contract, given to Lisa by Harold to confirm in seven (7) days on an outstanding offer to supply 100 dresses. An option contract according to the Restatement (Second of Contract) section 25 is “a promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer” (Holwell Securities Ltd., v. Hudges  1 ALL ER 161).. This is made by Harold on a telephone call and he even gave a time frame (seven days) for Lisa to accept. When Lisa mailed the acceptance, there was perfected contract regardless of the “actual and physical” acceptance of Harold (Entores Ltd. v. Miles Far East Corpn.  2 ALL ER 493). The determination of perfection of the contract has something to do with the “mailbox rule” which states that a party's acceptance take effect as soon as he puts his acceptance on the mail regardless if the other party receives it or not (Henthorn v Fraser  2 Ch 27).
With the first contract being established and Lisa having exercised her option to accept the 1200 dresses through the mailing, there arises the second contract which is the perfected contract for Harold to supply the dresses to Lisa. This intention is clearly inferred from the facts of the case when there were serious and substantial negotiations between the parties to come up with an agreement for Harold to supply (with consideration of the purchase price) 100 dresses to Lisa. Section 2 of the Sale of Goods Act 1979 provides for the legal concept of a contract of sale. When the intention was established and offer and acceptance were communicated, the relations between the parties were established and this binds them to the responsibilities of the parties in contractual terms (Rose & Frank Co v. JR Crompton Bros  ALL ER Rep 245.
Sections 50 to 53 of the Sale of Goods Act 1979 provides for the remedy and basis for the action of Lisa against Harold. This includes specific performance and damages for breach.
Section 52 of the Sale of Goods Act 1979 provides:
- In any action for breach of contract to deliver specific or ascertained goods the court may, if it thinks fit, on the plaintiff's application, by its judgment or decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages.
- The plaintiff's application may be made at any time before judgment or decree.
- The judgment or decree may be unconditional, or on such terms and conditions as to damages, payment of the price and otherwise as seem just to the court.xxx
The above section should be read in connection with Section 28 of the Sale of Goods Act 1979 where it provides that “Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange for the price and the buyer must be ready and willing to pay the price in exchange for possession of the goods”. When there was perfected contract binding the parties, the non-performance of another may give rise to an action of specific performance (Total Oil Ltd. v Thomson Garages Ltd.  1 QB 318), (Taylor v Webb  2 KB 283).
Section 53 expressly provides the liability of the seller if there is breach or non-compliance with the contractual relations:
(1)Where there is a breach of warranty by the seller, or where the buyer elects (or is compelled) to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may-
- set up against the seller the breach of warranty in diminution or extinction of the price, or
- maintain an action against the seller for damages for the breach of warranty.
(2)The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.xxx
No. Generally, an agreement need not be in writing to be enforceable with the exception of express provisions of law requiring formal requirements and in compliance with the Statute of Frauds.
Section 4 of the Sales of Goods Act 1979 provides how a contract of sale is made:
- Subject to this and any other Act, a contract of sale may be made in writing (either with or without seal), or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties.
Thus it becomes a general rule on common contract law that contracts, whether they be oral or written, binds the parties to the relation and creates a obligatory responsibility and attach damage for liability in establishing the same. An oral contract is as binding and mandatory as a written one because it shows the meeting of the minds of the parties and their intention to be bound by the terms and conditions of the relations they have established (Actionstrength Ltd. v International Glass Engineering  UKHL 17).
However, there are exceptional instances when the formal requirement of the contract is needed in order for the party to claim (a) validity and (b) enforceability of the contract terms and conditions. The following laws provide that the documents or agreements must be in writing in order to be fully “enforceable” and be considered “properly executed”:
- The Law of Property Act 1989 section 2
- Consumer Credit Act 1974
- Bill of Exchange Act 1882 sections 1, 17
- Bills of Sale Act 1878
- Statutes of Fraud 1677
The Statute of Fraud in particular provides for the following contracts or agreements to be in writing:
- Contracts in consideration of marriage.
- Contracts which cannot be performed within one year.
- Contracts for the sale of goods above a certain value.
- Contracts in which one party becomes a surety (acts as guarantor) for another party's debt or other obligation.
- Contracts for the transfer of an interest in land (Parsons & Vail Kellen, 2009).
- Contracts by the executor of a will to pay a debt of the estate with his own money (The actual text of the original law states that “Noe Action shall be brought . . . whereby to charge the Defendant upon any speciall promise to answere for the debt default or miscarriages of another person . . . unlesse the Agreement upon which such Action shall be brought or some Memorandum or Note thereof shall be in Writeing and signed by the partie to be charged therewith or some other person thereunto by him lawfully authorized” (Statute of Frauds 1677).
The nature of General Tortuous Liability is a way of having “individual” responsibility to answer for a wrong committed against a person whether intentional or through negligence. In common law, tort is a classification for the liability of special circumstance (culpa aquiliana) to differentiate it from the liability arising from a felony (culpa criminal) or from contractual relations (culpa contractual).
The underlying theory of general tortuous liability is that each person is required to exercise due diligence in dealing with another (Winterbottom v Wright  10 M&W 109). As a default expectation, every person must, in the exercise of his rights and the performance of his duties must observe diligence of a good father of a family (unless there is a more or greater expectation by provision of law or nature of his duties) (George v Skivington  LR 5 Ex 1). Falling short of this diligence makes a person liable for tort if there is damage caused to another (Heaven v Pender  11 QBD 503). Thus general tortuous liability arises when there is neglect of the exercise of the degree of care or skill to another person whom the person owes care and skill and without contributory negligence whom suffered injury in either his person, property or both.
Contractual Liability on the other hand is that which attach to the contractual relations of the parties when there is non-fulfillment of the responsibilities and duties of one party that causes damage to another Langridge v Levy  2 M&W 219. Contractual liability is the liability assumed by a party under a contract which binds both parties to fulfill under contractual terms and conditions (Rolls Royce New Zealand Ltd. v Carter Holt Harvey Ltd 1 NZLR 324) (Simaan General Contracting Co v Pilkington Glass Ltd  QB 758).
Tort of Negligence is dependent on the duty of care imposed by law to every person exercising their rights and performing their duties. Negligence is the lack of skill expected of the law in the performance of duties which causes damage to another's person or property. This should have produced damage to another because negligence, in itself is not actionable and would not warrant any right to claim liability.
In order to establish a rightful claim, the following must be established:
Duty of Care
The statutory functions, the nature of the roles and responsibilities and the default expectation to persons controls the duty of care one must exercise in order to fulfill a duty or responsibility. The duty of care is that of the diligence of a good father of the family (D v East Berkshire Community Health NHS Trust  2 AC 373). Any care that is below this standard will result to an actionable liability if this caused damage to another. Other professionals such as doctors in treating their patients (administration of drugs, decision-making as to treatment) or lawyers in dealing with clients on matters which might lead to deprivation of freedom or property are expected “extra-ordinary diligence” higher than the default. The same should also be foreseeable in order to have right to damages (Hay or Bourhill v Young  AC 92
If there is no damage, then there is no tortuous liability. This is because the establishment of tort liability requires “material or immaterial harm to a legally protected interest”. Without such damage, then the harm cannot be a basis for right to recover damages (Grieves v F. T. Everard and Sons Ltd.  EWCA Civ 27;  4 All ER 1161.