1st YEAR – CONTRACT LAW – CASE STUDY Bigstore Furniture Ltd (“Bigstore”) is a retailer of household furniture. The company announced its summer sale on 1 July 2009 by placing the following advertisement in several national daily newspapers in the UK. BIGSTORE’S SUMMER MEGASALE! Prices cut by up to 70%! Special offer! Anyone purchasing an Italia leather three-seater sofa by cash or credit card at the reduced price of £750 will receive an Italia leather two-seater sofa priced at £500 in the sale absolutely free of charge! This offer is available at all our stores until 31st August 2009. (The advertisement concluded by listing in small print all the company’s stores throughout the country.) On 5 August 2009 Susan took a copy of the advertisement with her and called at her local Bigstore to inspect the Italia sofas. She spoke to Ben, the Sales Manager, and told him that she had decided to purchase the sofas subject to first talking this over with her husband. Ben told Susan that the company only had a limited number of two-seaters so it was agreed that she would leave £100 in return for his agreement to hold the sofas for 48 hours. Ben told her that he would deduct the £100 from the purchase price if Susan went ahead with the purchase within that time period. On 7 August 2009 Susan called at the store to purchase the sofas and spoke to Ben who was very apologetic but explained that his staff had forgotten to reserve the sofas for her. He explained that in any event the two-seaters were “subject to availability” (as stated in various notices around the store), and the company had now run out of them. Ben also said that “…obviously the two-seaters were a free gift and were subject to availability.” He pointed out that the Italia three-seater sofa was still available but the price had now gone back up to £2,500. By reference to case law and statute or your own examples where appropriate: (a) Explain the elements of a unilateral offer and how such an offer may be accepted. (b) Explain whether the advert amounts to an offer or an invitation to treat in respect of (i) the three-seater sofas; (ii) the two-seater sofas (c) Explain with reasons what Susan purchased by paying GBP 100 on 5 August 2009. Was Susan entitled to have the GBP 100 deducted from the purchase price even if Ben had not agreed to do so? (d) Explain whether those who purchased a three-seater sofa were contractually entitled to receive a two-seater as well or whether Ben was correct in stating “obviously the two-seaters were a free gift…..” (e) Explain with reasons whether Bigstore has acted in breach of contract despite the notices which state that the two-seaters were “subject to availability”?