Question

Alamgir Contractors have started construction of an Apartment Complex in Main Gulberg, Lahore. They have advertised the sale of ten two bedroom apartments in the local newspaper, stating as a special offer that ‘these ten apartments are available at a special discount price to the first 10 buyers who will deposit Rs. 1,000,000/- in Alamgir Contractors Bank Account’.

Part A: Hamid paid Rs. 1,000,000/-, and learnt that his friend Arif had bought an identical apartment in the same building, but did not use the special offer. But Arif had paid the same price as Hamid. This meant that Hamid did not receive the discount advertised in the newspaper. When he went to Alamgir Contractors, they said their prices were fixed.

Part B: Assume Hamid bought the apartment by signing a contract and paying the entire price. The contract included a clause whereby the Contractors offered the buyer a single chance to inspect the apartment, after which the Contractor would be excluded from all liability for any defects. Hamid visited the apartment, and everything looked to be in order. In the monsoon season after a few hours of constant rain, the windows started leaking, and the apartment was flooded. Alamgir Contractors say that cannot be held liable.

ASSIGNMENT TASKS:

Part A: Write an opinion advising Hamid on the various tasks listed below.

Part B: Discuss the possible options available to Hamid.

Part A: In your opinion, Explain to Hamid: 1. Whether there is a contract between the parties? Why or Why not? 2. If there is a contract, who made the offer and who accepted it? 3. What kind of contract is this? Discuss the impact of different types of contract. 4. If there is no contract, what is missing? Also explain the importance of the essential elements required for the formation of a valid contract.

Part B: 1. Discuss the elements of a contract present in this situation. 2. Analyze the various terms in this contract with reference to their meaning and effect.

Answer 1

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Part A:

Answer 1:

There is a contract between the parties.

An advertisement can be treated as a contract in the instances where it specifies the quantitative benefits to the customers and customer agrees to avail the quantitative benefits. In the instances where the advertisement claims the qualitative benefits, such as an advertisement claiming to sell the delicious fruits, it cannot be treated as a contract if the customer purchases the fruits and cannot sue the seller if he/she finds that the fruit is not delicious according to him/her. Since the advertisement involved the quantitative benefit, it will be treated as a contract between the parties.

Part A:

Answer 2:

In the contract between the 'Alamgir Contractors' and Hamid, 'Alamgir Contractors' made the contract by publishing the add in the local news paper and Hamid accepted the contract by depositing the amount into the bank account of 'Alamgir Contractors' within the specified period of time.

Part A:

Answer 3:

The type of contract between the 'Alamgir Contractors' and Hamid is a offer and acceptance kind of contract. Types of contract:

1. Offer and acceptance contract: in this type of contract, one party offers a product and other party agrees to accept the product at the specified rate within the specific period of time either verbally or in written format.

2. Express Implied Contracts: in express contract, terms and conditions are specified either verbally or in the written format. In implied contracts, terms and conditions are inferred bythe actions of the parties.

3. Unilateral and Bilateral Contracts: in unilateral contract, one party promises to provide benefit in exchange of the performance. In bilateral contracts, both the parties promise each other for the benefit and both are obliged for the provision of the benefit.

4. Unconscionable Contracts: this type of contract favours one party and impose unfair condition on another party.

5. Adhesion Contracts: this type of contract is the one where one party drafts the contract and other party signs the drafted contract.

6. Aleatory Contracts: this is a type of contract whose performance is dependent on a particular event which is beyond the control of both the parties.

7. Option Contracts: in this type of contract, the purchaser has the right to buy or sell the asset at the later date at a pre agreed upon price.

8. Fixed Price Contracts: in this type of contract, the amount to be paid does not depend on the resources or the time used.

Part B:

Answer 1:

Elements of contract involved:

1. Offer: Alamgir Contractors offered the apartment for sale to Hamid 2. Acceptance: Hamid accepted the offer by

signing the contract and purchased the

apartment.

3. Consideration: Hamid purchased the apartment by paying money to Alamgir

contractors.

4. Legal purpose: Alamgir Contractors included a clause in the contract whereby the Contractors offered the buyer a single chance to inspect the apartment, after which the Contractor would be excluded from all liability for any defects.

5. Capacity: Hamid and the representative of Alamgir contractors was of sound minded and is capable of entering into the contract and were not minor..

6. Written instrument: Hamid and Alamgir contractor signed a written contract.

Part B:

Answer 2:

Various terms in the contract, their meaning and their

effect:

7. Hamid bought the apartment means he has

accepted the offer made by Alamgir contractors.

8. Hamid signed the contract means he has

signed the written instrument generated by the Alamgir contractors. Hence, he has legally accepted whatever is written in the contract. 9. The contract included a clause whereby the Contractors offered the buyer a single chance to inspect the apartment, after which the Contractor would be excluded from all liability for any defects which means that Hamid has to thoroughly check the apartment in his single visit. If he finds the defect afterwards, he cannot take any legal action on Alamgir contractor.