Webinar – consideration

Anne manages a local boutique and has entered into a contract with Dell to provide bags to the boutique. She needs the bags for her special promotion on 1st May, where she is hoping to impress her employer, who was recently asking Anne if she would take redundancy. Anne has searched for competitive prices and managed to arrange for Dell to sell her the bags at £5 per bag, a total contract price of £5,000. Dell has just begun his business and thinks he will make a small profit on the bags but it will enhance his reputation.

Dell begins work but finds that the price he has quoted is too low and he cannot really afford to make the bags at that price. This is due to the fact that he had originally contracted for SPU to deliver his bags to Anne for £1 a bag, but they are now telling him that they will not deliver the bags unless he pays £2. Dell has complained about the increase but as the delivery date is only two days away he does not know what he can do. As Anne is his major customer he cannot afford to let her down.

Dell tells Anne of his concerns and she agrees to pay the extra £1 for him. Dell then proceeds to make and deliver the bags. Anne’s employer was very impressed with Anne’s work and instead of making her redundant has promoted her. Anne sends Dell a cheque for £5,000. Dell has only paid SPU the deposit and sends Anne an invoice for the extra £1 a bag (£1,000).

Dell’s landlord had agreed that Dell would only need to pay him half the monthly rent of £1,000 while he is waiting for his business to pick up. Dell has paid the £500 per month for the last three months and it has really helped him establish his business, so much that he is now making a handsome profit.

Dell’s nephew Paul had helped in packing the bags into the vans. Dell was very pleased with his help and when the bags had all been delivered Dell told Paul he would pay him £50.

Dell seeks your advice on the following matters:

  1. Anne has refused to pay the extra £1,000
  2. SPU are demanding the additional money for delivery
  3. The landlord has told Dell he must pay the full rent from the 1st of next month.
  4. If Dell has to pay Paul £50