Breach of Contract Case Example-Collins Computers (CC) v Geoffs Gym (GG)
Collins Computers (CC) advertise their computer maintenance service in a local newspaper and on their website as follows; “we service computers for a very competitive £1000 per month for 12 months. If new customers accept promptly, we will reduce this monthly amount by £50. We are a popular local company and so to take up this offer, new customers must contact us by post, email or text by 8th June and clarify their preferred commencement date. Please note receiving a definite from all our customers is essential as our schedule is set in advance”
Geoff’s Gym (GG) are very interested and in desperate need of maintenance on their computers. They have used CC before on an occasional basis. They post a reply on the 3rd of June agreeing with CC’s “offer”. They also ring confirming a letter is in the post, a start date is also mentioned by GG during the telephone conversation. When CC’s fail to turn up and service the computers, which subsequently run very slowly, costing GG valuable business, GG maintains breach of contract. They wish to enforce the agreement and gain the monthly £50 reduction.
Using case law to support your answer, discuss the rights of both CC and GG as to the status of the agreement and whether GG can enforce the contract and/or claim compensation.
1.0 What makes a legally valid contract?
Charman (2005) defines a contract as a legally binding agreement between two or more parties that is also enforceable by law. The keyword here is agreement because without it, no contract can exist. This agreement can be oral, written or inferred from the parties conduct. In an agreement, the party that initiates the contract with an offer is known as the Offeror while the party that accepts the offer made by Offeror is known as the Offeree.
The following are the essential components that can turn an agreement in English law into a legally binding and thus enforceable contract;
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