LAW1194 auction sale of Gatsby Painting Collection

July 1, 2020

Last updated on September 30th, 2023 at 06:32 am

Read the problem below to complete this LAW1194 auction sale of Gatsby Painting Collection;

James read an advertisement by a firm of London auctioneers to the effect that there would be held in London an auction sale “without reserve” of the famous Gatsby Painting Collection, valued by an independent expert recently at £250,000. He immediately booked a flight from Scotland to the auction rooms in London where the auction was to be held.

He was determined to get the Collection at any price, especially after catching sight of the artist himself at the sale. James was participating spiritedly in the bidding, which was reaching a very high level under the direction of the auctioneer, when Gatsby demanded that the auction cease since he could not after all bear to part with the paintings. The auctioneer immediately refused to accept any more bids (the last one had been made by James) and went on to the next item. James’s last bid was £150,000.

James brought an action against the auctioneers for breach of contract demanding £100,000 damages (representing the difference between the contract price and the market value of the lot at the date of the breach) on the basis that the advertisement to hold an auction without reserve constituted a unilateral offer to sell the Collection to the highest bidder and that such an offer was accepted by him when he bid at the auction. The County Court, however, found for the auctioneers holding that:

The advertisement to hold an auction without reserve did not amount to an offer to sell the lot to the highest bidder since there were no express words to that effect in the advertisement, merely a statement of fact that the seller had not placed a reserve on the lot.

The auctioneer’s request for bids amounted merely to an invitation to make an offer to buy and that offer was made by bidding. No contract could be completed until the fall of the auctioneer’s hammer.

There was no contract because there was no consideration for the auctioneer’s promise.

In any event, damages would be purely nominal because, as the highest bidder, James was simply deprived of the chance of obtaining the lot at the price which he actually bid. Until the fall of the hammer, it would have been open to other bidders to bid at a higher price.

The decision was upheld by the Court of Appeal. James now wishes to appeal to the Supreme Court.

The following cases and statutes (available on Westlaw) were referred to in the courts below:

Warlow v. Harrison (1859) 120 E.R. 925
Johnstone v. Boyes [1899] 2 Ch. 73
Carlill v. Carbolic Smoke Ball Co [1893] 1 Q.B. 256
Williams v. Carwardine (1833) 2 L.J.K.B. 101
Barry v. Heathcote Ball & Co (Commercial Auctions) Ltd [2001] 1 All E.R. 944
Harris v. Nickerson (1873) L.R. 8 Q.B. 286
Payne v. Cave (1789) 3 Term. Rep. 148
Fenwick v. MacDonald Fraser & Co Ltd (1904) 6 F. (Court of Sessions) 850
Section 57(2) of the Sale of Goods Act 1979

The Task

You are asked to write a concise piece of legal advice advising James of his chances of a successful appeal to the Supreme Court. Your advice should not exceed 1,750 words in length (excluding your bibliography). If you exceed the word limit by more than 10%, you will be penalised by up to 5% of the marks. Do NOT use footnotes or endnotes – all case citations (and other references) should be included in the body of your advice. Your work should be word-processed and contain a detailed bibliography with full citations. Your advice should be supported by relevant case law and statutes (where appropriate). Plagiarism will not be tolerated, do not copy anyone else’s work, or show anyone else your work. You are reminded that plagiarism includes purchasing model coursework from whatever source.

Learning Outcomes

This coursework is designed to test the following legal skills:

To understand the foundation principles of the English law of contract (don’t need to elaborate too much)
To understand the foundation principles of the English legal system (don’t need to elaborate too much)
To handle factual data, selecting the material that is legally relevant
To identify the legal issues that require consideration
To deal with those issues in a clear and coherent manner
To select appropriate authorities that will enable a resolution of those issues
To write and argue rationally, coherently and succinctly
To use appropriate legal skills (i.e., citation of cases, legal research, etc.)

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