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    Prince Felix Wants To Improve His Palace Grounds For His Grandchildren

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    Sultan Mughal
    Prince Felix entered into two contracts - one with Greta to build a swimming pool for £1 million by March 1st, and one with Hans to build a fairground for £9 million in three installments. When work began, Greta demanded an extra £100,000 due to harder ground which Prince Felix agreed to without protest. For the fairground, Prince Felix paid the first two installments but then said he could not pay the final £3 million due to fire damage, so Hans agreed to reduce it to £2 million but then changed his mind.

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    Prince Felix Wants To Improve His Palace Grounds For His Grandchildren

    Uploaded by

    Sultan Mughal
    240 views2 pages
    Prince Felix entered into two contracts - one with Greta to build a swimming pool for £1 million by March 1st, and one with Hans to build a fairground for £9 million in three installments. When work began, Greta demanded an extra £100,000 due to harder ground which Prince Felix agreed to without protest. For the fairground, Prince Felix paid the first two installments but then said he could not pay the final £3 million due to fire damage, so Hans agreed to reduce it to £2 million but then changed his mind.

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    Prince Felix wants to improve his palace grounds for his grandchildren

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    Prince Felix entered into two contracts - one with Greta to build a swimming pool for £1 million by March 1st, and one with Hans to build a fairground for £9 million in three installments. When work began, Greta demanded an extra £100,000 due to harder ground which Prince Felix agreed to without protest. For the fairground, Prince Felix paid the first two installments but then said he could not pay the final £3 million due to fire damage, so Hans agreed to reduce it to £2 million but then changed his mind.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    240 views2 pages

    Prince Felix Wants To Improve His Palace Grounds For His Grandchildren

    Uploaded by

    Sultan Mughal
    Prince Felix entered into two contracts - one with Greta to build a swimming pool for £1 million by March 1st, and one with Hans to build a fairground for £9 million in three installments. When work began, Greta demanded an extra £100,000 due to harder ground which Prince Felix agreed to without protest. For the fairground, Prince Felix paid the first two installments but then said he could not pay the final £3 million due to fire damage, so Hans agreed to reduce it to £2 million but then changed his mind.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    Prince Felix wants to improve his palace grounds for his grandchildren.

    He decides to build a
    large swimming pool and a small fairground. Prince Felix entered into a contract with Greta
    to build the swimming pool for£1 million payable on completion. The contract provides for
    completion of the swimming pool by 1st March.
    Prince Felix entered into a contract with Hans to build the fairground for £9 million payable in
    three equal instalments: on signing the contract; on the commencement of work; and on
    completion. The contract provides for the completion of the fairground by 1st October.
    When work commences on the swimming pool, Greta encounters harder ground than she
    anticipated and demands an extra £100,000 to cover her increased costs. Prince Felix cannot
    find any other builder with the expertise to complete the contract on time and so agrees
    without protest so that the pool will be completed in time for his granddaughter Elsa’s
    birthday celebrations. On completion of the swimming pool on 1st March, Prince Felix refuses
    to pay Greta any more than £1 million.
    Prince Felix pays Hans the first and second payments as required by the contract. Prince
    Felix’s palace then suffers extensive damage in a fire, which will be costly to repair.
    Consequently, he tells Hans that he will not be able to make the final payment and so Hans
    offers to reduce it by one third to £2 million. Hans then regrets agreeing to reduce the final
    instalment and demands the original amount offering Prince Felix an extra three months to
    find the money.

    Advise Prince Felix as to his possible rights and liabilities.

    General remarks
    A question requiring a discussion of consideration and related principles. It was important to
    identify that this question raises issues of contract modification rather than formation; time
    was often wasted discussing offer and acceptance, which is irrelevant.

    Law cases, reports and other references the examiners would expect you to use
    Need to analyse each contract separately, as follows.

    Contract with Greta


    No frustration, Davies v Fareham although this may only be noted by better answers. Is there
    consideration for the variation? Consider Stilk and especially Williams v Roffey – practical
    benefit in completing in time for birthday party. If there is consideration, reflect whether there
    is economic duress. State the requirements from Pao On and examine especially the relevance
    of the absence of protest, Atlas v Kafco and the lack of any other practicable choice, The
    Atlantic Baron.

    Contract with Hans


    Is there consideration for the variation? Consider especially the applicability of the W v R
    practical benefit test in the light of the CA decision in MWB Business Exchange Ltd v Rock
    Advertising Ltd (2016), which recognised an expanded Examiners’ reports 2017 application of
    the practical benefit test. The resultant status of Re Selectmove might also be considered by the
    very best answers.
    If no consideration is found, the application of promissory estoppel should be examined. Its
    requirements should be discussed: unequivocal promise, Hughes, reliance as defined in the
    Post Chaser and the party setting up the estoppel must have acted equitably, D and C Builders.
    If an estoppel is established, consider if it has suspensory or extinctive effect Tool Metal and the
    obiter statements in the MWB Business case above.

    Common errors
    Knowledge shown of the W v R test and the principles of promissory estoppel but not applied
    correctly to the two scenarios. Discussing offer and acceptance and contract formation rather
    than modification. Focusing on irrelevant points (such as the fire and whether it frustrated the
    contract – no impact on the two key contracts).

    A good answer to this question would…


    identify the existing contractual relationship in each case, analyse the promise made and the
    extent to which any consideration can be found in support by reference to the above cases and
    principles.

    Poor answers to this question…


    demonstrated the errors referred to above and were poorly structured with muddled thinking.

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