Ntu - Keith - Contract Law

Nottingham Law School

Academic Division

CONTRACT LAW PRACTICE EXAM QUESTION

On 20th November Keith, the owner of conference hall, entered into a contract with Tech Ltd. The contract price was £15,000 under which Tech Ltd agreed to install a new high-tech multimedia projection system. It was agreed that the system had to be installed by 20th December in time for it be used for a large conference on e-learning booked by the national federation of teachers on 22nd December.

On 15th December Tech Ltd informed Keith that due to problems in finding special electricians they would not be able to complete the installation until 5th January. Keith reluctantly agreed to pay Tech Ltd an extra £2,000 to allow them to hire additional electricians to ensure that the installation was completed on time and to avoid having to cancel the conference. Tech Ltd hired extra electricians and worked longer hours to complete the installation as agreed on 20th December.

Keith also entered into a contract with Office Ltd who agreed to supply twenty flipcharts for the conference. The contract price was £1,000 and the flipcharts were delivered on 21st December.

On 22nd December, one of Keith’s employees fell ill and was unable to hand out welcome packs to the delegates. Keith approached his friend Simon, who often helped out at conferences, and asked whether he would step in and hand out the welcome packs. Simon agreed and handed out the materials. The next day Keith promised to pay Simon £50 for his trouble.

The Christmas conference period was not as lucrative as Keith had anticipated and as a result was unable to pay Office Ltd the full £1,000. Office Ltd, who were also in financial difficulties, agreed to accept payment of £750 in full settlement.

Office Ltd are now seeking to recover the outstanding £250 owed by Keith.

Keith is also refusing to pay the extra £2,000 promised to Tech Ltd and Simon is also seeking to recover the £50 promised by Keith.

Advise Keith...