Question 1

a. Alison runs a graphic design business from home. On 1 May, Alison received an enquiry from Henry, a potential client, about some artwork work he wanted her to design. On 2 May, she posted a proposal to Henry, specifying what she could do at the price of HK$50,000. On 4 May, she realized that she had underpriced the work and sent a second letter with a new price of HK$60,000. On 5 May, Henry received Alison's first letter and he immediately posted a letter stating, 'Thanks for your letter of 2 May. I like your proposal and wish to proceed in accordance with the terms set out in your letter.' On 6 May, Henry received Alison's second letter. He did not reply.

Required

Identify the elements required for a valid contract. Analyse in your own words, and with reference to relevant legal principles and cases, whether there is a valid offer and acceptance between Alison and Henry, and if so, at what price.

b. Explain in your own words the rules of interpretation of statutes as illustrated by the

cases of Bedford v. Bedford [1935] Ch 89 and Smith v Hughes [1960] 1 WLR 830.

Question 2

At the initial outbreak of the COVID-19 pandemic, facial masks were in great demand and ran out of stock in most pharmaceutical shops in Hong Kong. Adrian operates a high-end fashion design company with a small production house. Seeing the desperate need of facial masks, Adrian decided to transform his production house into a temporary facial masks factory. He therefore entered into several contracts for the purchase of machinery and raw materials for the said purpose.

One of the contracts that Adrian has made is a contract ('the Contract') with Super Standard Ltd ('Super Standard') to purchase five mask production machines. Super Standard stored its machines in a storehouse in a remote suburban area in Vietnam ('the said storehouse') where the rental is low. The Contract was executed on 22 March 2020. Unknown to both Adrian and Super Standard, a fire broke out in the said storehouse on 21 March, the night before the Contract was signed. As a result, the said storehouse together with all the mask production machines were completely destroyed. Due to delay in communication, the news about the fire only reached Adrian and Super Standard on 24 March.

Super Standard was unable to supply the machines but Adrian insisted that Super Standard ought to deliver the machines according to the Contract.

Required

In your own words, analyse and explain to Super Standard whether the Contract is valid and whether it is obliged to perform it. You should also give a full account in your own words of the legal concepts and/or legal cases that your advice to Super Standard is based on.