Question

Glitz Designs Ltd wish to sell their Union Jack phone covers to Clearaphone Ltd. Clearaphone Ltd agree to give Glitz Designs Ltd 70% of the retail price of any covers sold and promise to retail the covers at least 70% above the cost price of £7.00 each. The covers prove to be very popular and Clearaphone have been retailing them at £14 each. One thousand phone covers are sold at this price. To promote the release of Clearaphone Ltd’s new range of Britphones, a free cover is given away with each purchase. These phones retail at £210 each. One thousand of these have been sold. Unfortunately, for Clearaphone Ltd a national newspaper released a story suggesting that the materials used in the manufacture of these phones is toxic. Sales drop off. Clearaphone Ltd tell Glitz Designs Ltd that they can only pay them £9,000 of the money owed in full and final settlement of the promised percentages of sales, as they intend to use any available funds to take court action against the newspaper. Glitz Designs Ltd fear that Clearaphone may go out of business as a result of the scandal and accept. Clearaphone have settled out of court with the national newspaper and received an amount of £1 million. Glitz Designs Ltd approach Clearaphone Ltd for the money that was not paid back, £800 from the sales of the initial covers sold independently and £147,000 for the covers given away free with the Britphones. Advise Clearaphone, in the light of the doctrine of consideration, as to the total amount of indebtedness to Glitz Designs Ltd and whether or Glitz Designs Ltd can be held to their promise to accept £9,000 in full and final settlement of the monies owed.

Answer 1

Answer:

As per doctrine of consideration Glitz Design Limited had to be paid the amount of initial cover sold independently for $ 800 and $ 147000 for covers given away for free but the clearaphone made feared design limited of getting out of market hence it accepted the offer of $9000 settlement as final .Later the outside settlement of clearaphone with national news paper fetch him compensation f $ 1 million and then Glitz approach for its full money instead $9000.

The clearaphone had to perform its promise of paying the amount of initial cover sold independently for $ 800 and $ 147000 for covers given away for free now as the case has been settled now as per doctrine of consideration .

Design Ltd can be held to accept $9000 to perform its promise as it had accepted it in full .As per doctrine of consideration legally it cant demand .

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