Question 1

In January, Fraser decided to buy a half-completed housing development from ahouse building firm which was in financial difficulty. Fraser asked Joe, a quantitysurveyor, to have a look at the site and give him an analysis of how much it wouldcost to complete the development, saying "Please don't spend too long on it. I don'twant anything longer than a ten-page report."Joe inspected the site and drafted a detailed report for Fraser which showed that itwould cost between 130,000 and 170,000 to complete the development.Fraser bought the site and employed Howarth Howes Construction ("HHC") tocomplete the work. Fraser was keen to get the houses on the market by the end ofApril. HHC and Fraser entered into a contract agreeing that the work should becompleted by the end of April at a price of 120,000 including 30,000 for plumbing.HHC started the work, but early in February, said they were struggling to find aplumber. The only qualified plumber they could find who could complete the job bythe end of April wanted 33,000. Fraser agreed to pay the extra 3,000 as heneeded the work finished on time so that he could start marketing the properties.HHC accepted his offer. Both parties thought this was a fair outcome.At the end of April, Fraser telephoned Joe to tell him that the development had nowbeen completed. He thanked Joe for the favour earlier in the year and said that hewould be giving Joe 5,000 as a "thank you".Fraser paid HHC 120,000, but he declined to pay the 3,000 extra for the plumbing.Fraser also decided not to give Joe 5,000 for the work he had done in January.

Advise Fraser whether:

• he is liable to pay the extra 3,000 to HHC for the plumbing; and
• he is bound to pay Joe 5,000 for the work he had done in January.

To do this you must do the following:

• Cite relevant authorities and apply relevant legal rules to the facts;
• Explain what is needed for a binding contract/contractual variation;
• Explain the common law position in relation to promises to pay the otherparty more for the same contractual performance; and
• Explain if, and when, a past act may be consideration.

Question 2

ElecTech Ltd (ElecTech) is an online seller of electrical goods in the north east of England. It imports goods and stores them at warehouses.

JWE Holdings plc (JWE) owns a number of commercial warehouses throughout the UK.

On 14 April ElecTech and JWE entered into a signed, written contract for JWE tostore 20,000 of ElecTech's i-pads ("the Goods") at its warehouse in Hull (the"Warehouse"). The contract was made on JWE's standard terms which include the following:

21. The Company [JWE] will keep the Goods in the Warehouse which will beguarded at all times.

22. The Company shall not be liable for any loss or damage to the Goods, howsoever caused.

On 23 April, the Goods were stolen from the Warehouse. At the time of the theft, the Warehouse had been locked and fully alarmed, but had been left unguarded.

With no guards on duty, the thieves had managed to disconnect the alarm system, gain entry to the Warehouse and steal the Goods undisturbed.

ElecTech's estimated loss of profit on the stolen Goods is 1 million.

JWE denies liability seeking to rely on Clause 22.

Advise ElecTech. To do this you must do the following:

• Cite relevant authorities and apply relevant legal rules to the facts.
• Identify the breaches of contract by JWE;
• Explain what damages ElecTech could claim if Clause 22 was not part of the contract;
• Consider whether Clause 22 would pass the common law tests of incorporation and construction and
• Consider whether Clause 22 would be upheld under the Unfair ContractTerms Act 1977 and if so, what would be the effect.