Cambridge BA: Formation & Agreement Exam Paper

Alexia owns a boutique art gallery and is seeking to purchase a rare 18th-century painting. On Monday, she sends an email to Bruno, a private collector, stating: 'I am interested in purchasing your Gainsborough portrait. Would you accept £50,000?' Bruno replies immediately: 'I might consider £65,000, but I need to think about it. I'll give you an answer by Friday.' On Wednesday, Bruno sends another email: 'Actually, £60,000 and it's yours. This offer remains open until Sunday midnight.' Alexia is away on business and does not see this email until Thursday evening. Meanwhile, on Thursday afternoon, Bruno sells the painting to Clara for £58,000 after she approaches him directly. On Friday morning, Alexia emails Bruno: 'I accept your offer of £60,000.' Bruno responds that the painting has been sold. Alexia argues that Bruno was bound to keep his offer open until Sunday as promised and that her Friday acceptance created a binding contract. She seeks damages for loss of bargain, claiming the painting is now worth £75,000. Advise Alexia on her prospects of success in a claim against Bruno for breach of contract.

"The requirement of certainty in contract formation serves important commercial purposes, but the courts' approach to uncertainty has become increasingly flexible in response to modern business practices." Critically evaluate this statement with reference to relevant case law and academic commentary.

DataTech Ltd, a software company, was struggling financially and needed to raise capital urgently. In January, DataTech's CEO, Emma, approached several potential investors. She sent identical emails to five venture capital firms stating: 'We are offering a 25% equity stake in DataTech for £2 million investment. This is a limited-time offer available to the first firm to accept by 31st January.' VentureMax replied on 25th January: 'We are very interested. We accept your offer in principle, subject to satisfactory due diligence to be completed by 15th February.' Emma immediately responded: 'Excellent! We look forward to working with you.' Meanwhile, CapitalPlus had been conducting its own research and on 30th January emailed: 'We accept your offer of 25% for £2 million unconditionally.' Emma replied: 'I'm sorry, but we've already agreed terms with VentureMax.' However, VentureMax's due diligence revealed significant financial irregularities, and on 10th February they emailed: 'Unfortunately, due diligence has revealed unacceptable risks. We withdraw from the proposed transaction.' Emma immediately contacted CapitalPlus: 'VentureMax has withdrawn. Are you still interested?' CapitalPlus replied: 'Yes, but given the delay and market changes, we can now only offer £1.5 million for 25%.' Emma is furious and seeks advice on whether binding contracts exist with either firm and what remedies might be available.

"The postal rule represents an arbitrary and outdated exception to the general principle that acceptance must be communicated to be effective. Modern communication methods have rendered it obsolete and it should be abolished." Discuss.