*Law Tripos 2019, Law of Contract, Question 2.
LAW OF CONTRACT "For the first eleven months of 2017, Axel (a company) supplied grade A petrol to Box (a company) at the price, agreed on each delivery, of 80 pence per litre. Box then wished to place the relationship on a formal basis. Box offered in writing to Axel that: ‘(i) Axel will supply Box with all Box’s grade A petrol needs for the calendar year 2018, at 80 pence per litre, and (ii) the contract will continue for the year 2019 unless (iii) either party in 2018 gives at least two months’ notice that it wishes to terminate the contract. (iv) Any counter-proposals or contractual correspondence are to be made by hard-copy letter. (v) Any contractual variation must be formulated in hard-copy and signed by both parties.’ Axel responded by e-mail: ‘parts (i) and (ii) and (iv) and (v) of your written proposal are accepted; but, as for (iii), we suggest that the minimum notice period should be one month, and we will assume that this is agreed unless we hear soon from you.’ Box did not read Axel’s e-mail because Box had assumed (in view of (iv), above) that Axel would write in hard-copy form. Therefore, Box deleted all its e-mails without reading them. Box continued to place monthly orders with Axel, for which Axel invoiced Box at the 80 pence rate. The agreement ran smoothly at that price during 2018 until, on Wednesday, 28 November 2018, Axel placed under the door of Box’s office a hand-written letter which read: ‘Axel cannot supply you with petrol in 2019 at 80 pence, only at 90 pence. Unless you agree to this reasonable increase by Friday 30 November, this note will serve as one month’s notice that our contract has been terminated.’ In fact Box’s offices were closed on 28 to 30 November because of a gas leak. Box did not respond to Axel until Monday 3 December, when Box wrote by hard-copy letter: ‘we refer you to part (iii) of our agreement: the minimum notice period is two months and not one month; and so our contract for 2019 will continue at the rate of 80 pence; and in the event that you refuse to supply, we will be seeking specific performance of your promise’. The market rate for grade A petrol from all other suppliers in 2019 is 95 pence. Advise Box whether specific performance and/or damages are available."*
EMILY HO PER INCURIAM
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MICHAELMAS 2019