Table of Contents
Type: Assignment (Problem Question, IRAC) | Subject: Contract Law (LLB) | Level: Undergraduate | Word Count: ~2,500 words
This model assignment was produced by an Essays UK specialist as reference material for learning purposes only. It shows how a problem question can be structured and reasoned; it is not intended to be submitted as a student’s own work. For support in this field, see our law assignment writers.
Overview: This model assignment works a single contract law problem question through the IRAC method (Issue, Rule, Application, Conclusion). It covers the classification of contractual terms, anticipatory breach and the right to terminate, the measure of damages, remoteness and mitigation, the enforceability of an agreed damages clause, and the availability of specific performance, illustrating how leading English authorities are applied to the facts and how OSCOLA citations are presented in an undergraduate answer.
Problem questions are the most common form of assessment in undergraduate contract law, and marking schemes reward a disciplined, structured answer far more than an unfocused essay. The IRAC framework — Issue, Rule, Application, Conclusion — supplies that structure: for each problem on the facts, the writer states the issue, sets out the governing rule with authority, applies it to the specific facts (the stage that attracts most of the marks), and reaches a reasoned conclusion. A strong answer selects only the law the facts raise and argues both sides where the outcome is uncertain. The worked example below responds to a typical breach-and-remedies scenario and is offered as a model of method only: students should use it to see how the issues interlock and how authority is deployed, then build their own analysis from the primary sources.
Priya owns and runs The Copper Pot, a bistro in Leeds. On 1 March 2026 she entered into a written contract with Oakwell Joinery Ltd for the design, manufacture and installation of a bespoke reception bar. The agreed terms included: a price of £12,000; that the bar would be constructed in “solid English oak”; and that the works would be completed and installed by 24 April 2026. When placing the order Priya explained to Oakwell that the date mattered because she had booked a private relaunch dinner for 26 April, worth £3,500 to the business. Clause 9 provided: “If the works are not completed by the agreed date, the contractor shall pay the client £500 for each day of delay.”
On 10 April Oakwell emailed Priya stating that its workshop was overbooked and that it “would not be able to finish before the second week of May at the earliest”. Priya did nothing for a week; then, on 17 April, she instructed Oakwell to carry on. The bar was installed on 9 May. On inspection, its front panels proved to be oak veneer bonded to MDF rather than solid oak, although the structural frame is solid oak. The veneer is not distinguishable to customers and the bar functions perfectly. A surveyor advises that replacing the panels with solid oak would cost £4,500 and require removing the installed unit, whereas the difference in market value between the bar as built and a wholly solid-oak bar is about £400. Priya had to cancel the 26 April dinner, losing the £3,500 fee, and rebooked a smaller event for late May.
Advise Priya as to her rights and remedies against Oakwell Joinery Ltd.
Because The Copper Pot contracts in the course of its business, this is a business-to-business transaction and the Consumer Rights Act 2015 does not apply; the relevant implied terms arise under the Supply of Goods and Services Act 1982 (a contract for work and materials). The issues are:
English law classifies terms as conditions, warranties or innominate terms. Breach of a condition — a term going to the root of the contract — entitles the innocent party both to terminate and claim damages, whereas breach of a warranty sounds in damages only; compare Poussard v Spiers and Pond (singer absent on opening night: condition) with Bettini v Gye (some rehearsals missed: warranty). The innominate term was recognised in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd: the remedy turns on whether the breach deprives the innocent party of substantially the whole benefit of the contract. Labelling a term a “condition” is not decisive where that would be unreasonable (L Schuler AG v Wickman Machine Tool Sales Ltd). For a contract for the transfer of goods, the Supply of Goods and Services Act 1982 implies terms of correspondence with description (s 3) and satisfactory quality (s 4), mirroring ss 13–14 of the Sale of Goods Act 1979; by analogy with s 15A, in a non-consumer contract a breach too slight to justify rejection is treated as a breach of warranty.
The requirement of “solid English oak” forms part of the description and quality of the works, so front panels of veneer over MDF are a prima facie breach of terms that would ordinarily be conditions. However, the “slight breach” qualification is strongly engaged: the frame is solid oak, the veneer is indistinguishable to customers, the bar is fully functional, and the difference in value is only about £400. A court may well hold that rejecting a £12,000 installed bar over so minor a departure would be unreasonable, treating the breach as one of warranty. The completion date is different: Priya told Oakwell at formation that it was critical for a booked event, which points towards time being of the essence, so that substantial late delivery would be repudiatory.
The oak defect is a breach but is likely to be treated as non-repudiatory, limiting Priya to damages. The delay is potentially repudiatory — but, as Issue 2 shows, Priya’s own conduct determines whether she may rely on it to terminate.
Where a party declares in advance, by words or conduct, a clear intention not to perform a term going to the root of the contract, the innocent party faces an anticipatory breach and may elect either to accept the repudiation, terminate and sue at once, or to affirm and press for performance: Hochster v De La Tour. The election must be communicated clearly, though a reasonable time to decide is allowed and mere inactivity is not necessarily acceptance. On affirmation the contract remains alive for both parties (White and Carter (Councils) Ltd v McGregor): the innocent party must accept performance and loses the right to terminate for the waived repudiation, but keeps the right to damages for any actual breach.
Oakwell’s email of 10 April announced it could not complete until the second week of May — two to three weeks late. If time was of the essence (supported by the communicated importance of the 26 April event), that is a renunciation of a condition and an anticipatory breach entitling Priya to terminate immediately. She did not. Her week of silence is probably within the reasonable time to decide and so is not itself an election; the decisive act is her instruction on 17 April to “carry on”, by which she affirmed the contract. She therefore cannot now reject the bar for lateness but keeps her damages claim for the delay that occurred.
Priya affirmed and must accept the late but functional bar. She cannot terminate; her remedy for the delay lies in damages (Issue 4) or under the agreed-damages clause (Issue 5). Combined with the slight quality breach in Issue 1, termination is unavailable and the dispute is about quantum.
Issue. What sum compensates Priya for the panels being veneer rather than solid oak — the £4,500 cost of cure, or the roughly £400 diminution in value?
Rule. The governing principle is expectation: damages place the claimant, so far as money can, in the position she would have occupied had the contract been performed (Robinson v Harman). For defective works she may in principle claim either the cost of reinstatement or the diminution in value. But in Ruxley Electronics and Construction Ltd v Forsyth the House of Lords held that where reinstatement is wholly disproportionate to the benefit and the claimant is unlikely to carry it out, it is not the reasonable measure: the owner of a usable but under-deep pool recovered neither the large rebuilding cost nor nothing, but a modest sum for “loss of amenity”.
Application. Spending £4,500 to remedy a defect worth about £400, by ripping out an installed and functional bar, is almost the paradigm of disproportionate reinstatement, and there is no suggestion Priya intends to have the work redone. A court is therefore unlikely to award the cost of cure. The diminution (around £400) is recoverable, and the Ruxley reasoning supports a further modest loss-of-amenity award to reflect that Priya bargained specifically for solid oak and did not get it.
Conclusion. Priya is likely to recover roughly £400 in diminution plus a small, discretionary loss-of-amenity sum — not the £4,500 cost of reinstatement.
Issue. Can Priya recover the £3,500 lost on the cancelled relaunch dinner?
Rule. Even losses factually caused by a breach are recoverable only if not too remote. Hadley v Baxendale established two limbs: losses arising naturally in the usual course of things, and losses in the reasonable contemplation of both parties at the time of contracting as the probable result of a breach, where special circumstances were communicated. In Victoria Laundry (Windsor) Ltd v Newman Industries Ltd the claimant recovered ordinary lost profits on a delayed boiler but not those of a specially lucrative contract of which the seller knew nothing; Koufos v C Czarnikow Ltd (The Heron II) set the required likelihood as “not unlikely” or a “serious possibility”, stricter than tort’s foreseeability. The duty to mitigate (British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd) bars recovery for losses the claimant could reasonably have avoided, though she need not take unreasonable steps.
Application. Priya told Oakwell at formation about the 26 April event and its importance, so the lost booking falls within the second limb of Hadley v Baxendale: the special circumstance was communicated and the loss was plainly “not unlikely”. Causation is satisfied because it was the delay — not the veneer — that forced the cancellation. Mitigation reduces rather than defeats recovery: Priya rebooked a smaller late-May event, so revenue reasonably earned and costs saved must be set against the £3,500. Whether she should have hired a temporary bar to save the original dinner turns on what was reasonable at short notice; a makeshift substitute for a bespoke relaunch may not have been, so that omission is unlikely to bar recovery.
Conclusion. The £3,500 is recoverable under the second limb of Hadley v Baxendale, subject to a deduction for the revenue reasonably recouped from the rebooked event.
Issue. Is clause 9 (£500 per day of delay) enforceable, or is it an unenforceable penalty?
Rule. The traditional test in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd distinguished a genuine pre-estimate of loss (enforceable) from a sum “extravagant and unconscionable” compared with the greatest conceivable loss (a penalty). In Cavendish Square Holding BV v Talal El Makdessi and the conjoined ParkingEye Ltd v Beavis, the Supreme Court reformulated the rule: a secondary obligation triggered by breach is penal only if it imposes a detriment out of all proportion to the innocent party’s legitimate interest in the enforcement of the primary obligation. A clause is not penal merely because it is not a precise pre-estimate, provided it protects a legitimate commercial interest proportionately.
Application. Priya has a clear legitimate interest in timely completion — the booked event, trading revenue and reputation. The question is proportionality. At £500 per day, a delay from 24 April to 9 May (some fifteen days) yields £7,500, exceeding both the £3,500 event loss and the small quality loss. Whether that is “out of all proportion” is judged against her legitimate interest assessed at the time of contracting; £500 per day could reflect genuine daily lost trade plus the one-off event, making it enforceable, but if extravagant relative to the greatest conceivable loss it would be struck down and Priya would fall back on common-law damages. Importantly, a valid agreed-damages clause generally governs recovery for that breach, so Priya cannot also claim unliquidated damages for the same delay; she must elect whichever route yields more.
Conclusion. Clause 9 is probably enforceable as a proportionate protection of a legitimate interest, but is vulnerable if £500 per day is extravagant. Priya should compare the clause sum with her provable losses and claim under whichever is higher, not both.
Issue. Could Priya compel Oakwell to rebuild the bar in solid oak?
Rule. Specific performance is an equitable, discretionary remedy granted only where damages are inadequate, typically for unique subject matter. Courts are reluctant to order performance requiring their constant supervision: in Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd the House of Lords declined to order a tenant to keep a shop open, stressing both the supervision objection and the adequacy of damages. Building and manufacturing obligations are rarely specifically enforced.
Application. The bar is installed and fully functional, and damages adequately compensate Priya for the oak defect. Ordering Oakwell to remove and rebuild the panels would require supervision of the works and would be as disproportionate as the cost-of-cure award rejected under Issue 3. Nothing about a replacement panel is sufficiently unique to displace the adequacy of damages.
Conclusion. Specific performance would not be granted; Priya’s remedy lies in damages and, potentially, the agreed-damages clause.
Priya should be advised that she cannot terminate. The oak defect is likely a slight, non-repudiatory breach, and she affirmed the contract on 17 April after Oakwell’s anticipatory breach, so she must accept the late but functional bar. Her remedies sound in damages: for the oak, the diminution of roughly £400 plus a modest loss-of-amenity sum, not the disproportionate £4,500 cost of cure; for the delay, the £3,500 lost booking under the second limb of Hadley v Baxendale, reduced by what she recouped from the rebooked event. Alternatively she may rely on clause 9 if it is enforceable and larger, but not both for the same delay. Specific performance is unavailable. In practice the realistic claim combines the quality award with the better of the two delay measures, subject to mitigation.
Three features are worth noting for study. First, the application sections carry the argument: each rule is tied immediately to specific facts (the £400 difference, the communicated event, the 17 April instruction), which is where the higher marks sit. Second, the answer argues in the alternative where the law is genuinely uncertain — the penalty clause and the slight-breach point both turn on evaluative tests — which shows judgment rather than guesswork. Third, authorities are cited in OSCOLA form, case names italicised in the text with full citations collected below. This document models method only; it should inform a student’s own reading of the primary sources, not replace it.
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