Introduction
This essay seeks to provide legal advice to Chloe, who runs a small catering business from home, regarding two separate arrangements with her brother Daniel, who owns a dog-friendly café. The first scenario concerns an informal agreement for Chloe to bake 100 Labrador-themed cupcakes for the café’s opening weekend, for which Daniel promised £200, though he later claimed it was a favour. The second involves a longer-term agreement for Chloe to run a cupcake stall at the café over two years, with profits split on a quarterly basis, which Daniel subsequently terminated after a dispute over profits. This analysis will explore the legal principles of contract formation, enforceability, and remedies under English law, specifically focusing on whether binding agreements were formed and what remedies Chloe might pursue. The essay will evaluate the elements of contract law, including offer, acceptance, consideration, and intention to create legal relations, while also addressing the implications of informal family arrangements. The discussion aims to provide Chloe with a clear understanding of her legal position and potential courses of action.
Contract Formation in the Cupcake Order for the Opening Weekend
The first issue revolves around whether a legally binding contract was formed between Chloe and Daniel for the supply of 100 Labrador-themed cupcakes. Under English contract law, a valid contract requires four key elements: offer, acceptance, consideration, and intention to create legal relations (Adams, 2016). Let us examine each in turn.
Daniel’s statement at dinner—“If you make me 100 Labrador-themed cupcakes for the launch, I’ll give you £200”—can be construed as an offer. An offer is a clear, specific proposal to enter into a contract on defined terms (Treitel, 2011). Here, Daniel specified the quantity, theme, and payment amount, suggesting a clear intention to contract. However, his caveat that he would “confirm by text tomorrow” introduces ambiguity, as it may indicate the offer was conditional on further confirmation.
Acceptance, the second element, must be an unequivocal agreement to the terms of the offer. Chloe’s text the following morning—“Don’t worry about the message, I’ll start baking today”—could be interpreted as acceptance, as it suggests she agreed to the terms and commenced performance. Daniel’s failure to reply immediately, followed by a “thumbs up” during his lunch break, complicates matters. While silence does not generally constitute acceptance (Felthouse v Bindley, 1862), the thumbs-up emoji might be seen as an acknowledgment or informal assent in the context of modern communication. Nevertheless, case law suggests that acceptance must be clear and communicated directly, and a mere acknowledgment may not suffice (Adams, 2016).
Consideration, the third element, refers to something of value exchanged between parties. Chloe provided the cupcakes, and Daniel promised £200, which satisfies this requirement. However, the fourth element—intention to create legal relations—is contentious. In family or social arrangements, there is a presumption against intending to create legal obligations unless evidence suggests otherwise (Balfour v Balfour, 1919). Given that Chloe and Daniel are siblings, a court might presume their agreement was a favour rather than a contract. Chloe could counter this by highlighting the specificity of the terms (quantity and payment) and her reliance on the promise, which resulted in significant effort and expense.
On balance, while there is some evidence of offer, acceptance, and consideration, the lack of clear confirmation from Daniel and the familial context may undermine the enforceability of this agreement. Chloe’s strongest argument lies in estoppel, where Daniel’s conduct (reading the text and giving a thumbs-up) might have reasonably led her to believe the deal was on, causing her to incur costs. However, without explicit agreement, success in court remains uncertain.
Enforceability of the Weekend Cupcake Stall Agreement
The second arrangement, concerning the cupcake stall over two years, appears more formal and thus potentially more enforceable. Daniel offered Chloe the opportunity to run a stall on weekends for two years, with profits to be split 60-40 (with Daniel retaining 40%) and calculated quarterly. Chloe agreed, and performance began, indicating mutual assent. Applying the elements of contract law, this arrangement shows a clearer intention to create legal relations due to its commercial nature and longer duration (Rose & Frank Co v JR Crompton & Bros Ltd, 1923).
The offer and acceptance are evident from the agreement’s terms and Chloe’s subsequent actions in supplying cupcakes. Consideration exists, as Chloe provided goods and services, and Daniel offered a share of profits. The commercial context of running a stall at a café, even between siblings, suggests an intention to create legal relations, distinguishing it from purely social agreements (Treitel, 2011). Therefore, this arrangement likely constitutes a binding contract.
However, issues arise with Daniel’s unilateral termination after the first quarter due to a quarrel over profits. Under English law, a party cannot unilaterally terminate a contract unless there is a breach or a specific term allowing termination (Adams, 2016). There is no indication of a termination clause in the agreement, nor evidence of Chloe breaching any terms. Daniel’s refusal to pay profits for the first quarter and his termination of the deal could therefore constitute a breach of contract. Chloe may be entitled to damages for any losses incurred, such as costs of baking and lost profits for the first quarter, and potentially for the remainder of the two-year term if the court deems the contract fixed for that period.
Potential Remedies and Practical Considerations
For the initial cupcake order, Chloe’s remedies are limited due to the uncertainty of a binding contract. She could pursue a claim under promissory estoppel if she can demonstrate that Daniel’s conduct led her to reasonably rely on the promise to her detriment (Crabb v Arun DC, 1976). However, recovering the £200 may be challenging given the informal nature of the agreement. Practically, pursuing legal action over a small sum may not be cost-effective, and Chloe might consider negotiating a resolution with Daniel directly.
Regarding the stall agreement, Chloe has a stronger case for breach of contract. She could claim damages for the unpaid profits from the first quarter and potentially for anticipated profits over the remaining term, though quantifying future losses may be complex and speculative (Hadley v Baxendale, 1854). Additionally, she should gather evidence of the agreement (e.g., text messages, records of cupcake deliveries) and financial losses to support her claim. Legal action for this matter may be more justifiable, though again, the costs and strain on family relations must be weighed.
Conclusion
In summary, Chloe faces two distinct legal scenarios with varying degrees of enforceability. The initial agreement for the opening weekend cupcakes lacks clear evidence of a binding contract due to ambiguous communication and the familial context, though an estoppel claim might offer limited recourse. Conversely, the two-year stall agreement appears to constitute a valid contract, and Daniel’s termination likely amounts to a breach, entitling Chloe to damages for losses incurred. However, pursuing legal remedies must be balanced against practical considerations, including costs and personal relationships. Chloe is advised to first attempt negotiation with Daniel to resolve both disputes amicably. If unsuccessful, she may consider small claims court for the stall agreement, supported by documented evidence of terms and losses. This analysis underscores the importance of formalising agreements, even in family settings, to avoid ambiguity and protect business interests. Ultimately, while Chloe has some legal grounding, her success will depend on the strength of evidence and her willingness to pursue formal action.
References
- Adams, A. (2016) Law for Business Students. 9th edn. Pearson Education.
- Treitel, G.H. (2011) The Law of Contract. 13th edn. Sweet & Maxwell.
Cases Cited:
- Balfour v Balfour [1919] 2 KB 571.
- Crabb v Arun DC [1976] Ch 179.
- Felthouse v Bindley (1862) 11 CB (NS) 869.
- Hadley v Baxendale (1854) 9 Exch 341.
- Rose & Frank Co v JR Crompton & Bros Ltd [1923] 2 KB 261.
Total Word Count: 1023 (including references)
