Question #1:

Ziggy Sounds Ltd is a music production company. It frequently needs to update its equipment as technology develops and styles change. For many years, it has contracted with David Jones Inc (DJI) to create and supply all of its computerized components. A new contract was created each time that Ziggy required something new from DJI, but those contracts always were based on DJI's standard form contract (a pre-prepared document that sets out the parties' rights and obligations) and they always included precisely the same promises regarding the quality of the goods. DJI, however, recently came under new ownership and the owners are very cautious people. They generally want to carry on business as usual, but they are not yet sure that they are willing to provide the same promises regarding the quality of their company's goods. Ziggy recently sent a purchase order to DJI. DJI responded by sending back its usual standard form contract, containing all of the usual promises, but with one new phrase added: "This agreement is subject to formal contract." Although DJI's new owners intended to redraft its standard form contract, its workers immediately went ahead by creating the requested component and sending it to Ziggy. Ziggy paid, but within a few days, it discovered that the component was defective. When Ziggy indicated that it intended to sue for breach of contract, DJI's owners said that there was no contract.

Analyze whether there was a contract formed here, making sure you make reference to concepts like offer and acceptance, and how a court might determine whether these elements are present.

Question #2:

The City of Darlington, which wants to build a new recreational centre, places an advertisement in a local newspaper requesting that contractors submit tenders. The newspaper advertisement states that tenders must be received by 4:00 pm on June 15 and that tenders are irrevocable after they have been received by the city. Ronaldo is amongst the contractors who submit tenders. At 4:15 on June 15, however, he realizes that he had miscalculated the expenses that would be involved in the project and that his bid consequently is grossly understated. He telephones the city and asks it to remove his tender from consideration. Even though the city has yet to select the winning tender, it rejects Ronaldo's request and informs him that it will select his bid if that bid offers to build the recreation centre for the lowest price.

Explain whether Ronaldo will be able to revoke his bid, and describe how contract law would interpret a tender in law in this case.