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Mr E orders a cake for his wife's birthday at a bakery on his street. On the bakery's window, a sign is up that says, 'Today's special offer! Any customised cake for £50!' Mr E orders a customised cake for £50 at 1 p.m., and he is told by the baker that he will complete his order by around 3:30 p.m., and that he should pay the cost when he returns. Mr E is given a ticket with the approximate time and his order, and he is instructed to bring this ticket with him when he returns to collect his order; Mr E takes the ticket back home with him. After Mr E leaves with his ticket, the baker begins making Mr E's order.

At 3:20 p.m. on that same day, Mr E's friend contacts him and shows him a picture of a cake for £45. He thinks it is vastly superior to his order. So, at 3:30 p.m., Mr E calls up the baker, and the baker has prepared his order and is now waiting for him to come and collect it. But Mr E, over the phone, says he will not pay and that he doesn’t want the cake anymore. The baker claims that Mr E verbally entered into the contract at the bakery earlier that day, after Mr E made his order and received the ticket, which was before the baker began making his order. Mr E disagrees.

Is Mr E in breach of contract?

BakedAlaska624
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    Sure Mr E is in breach. Where are your doubts even coming from? – Greendrake Jan 24 '22 at 01:21
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    the very existence of the ticket is the nail in the coffin. – Trish Jan 24 '22 at 01:23
  • @Greendrake Looking back at this question, I'm honestly not sure. I guess this is what happens when a layperson asks too many questions. I had seen a mooting problem similar to this where the trial court had found in favour of someone in a position similar to Mr E, which now seems a little confusing. – BakedAlaska624 Jan 24 '22 at 01:57
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    @Tolga Without knowing the details of the case, it is impossible to speculate. Why not ask about it? –  Jan 24 '22 at 11:41
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    Is this straight out of some book called "How to be an a$$hole 101"? Mr. E better not show his face in that bakery again. If the baker does not know the whereabouts of Mr. E then there isn't much of a way that the baker could make him pay. The baker can rightfully shun Mr. E by plastering what a heinous moron Mr. E is in his shop. At best, Mr. E could have checked if he can cancel the order before the baker got started so like 1:15. – MonkeyZeus Jan 24 '22 at 16:16
  • I spent much of this question expecting the bakery to refuse to make the cake. That would not be quite as outrageous as the customer refusing to pay. Even if this were some reason not considered a contract, the bakery would still be entitled to recover under the principle of estoppel, so this comes down to "Under what legal theory is the bakery entitled to relief?", not "Is the bakery entitled to legal relief?" – Acccumulation Jan 25 '22 at 01:44
  • There was a scene in the movie Short Cuts by Robert Altman about a custom-made cake that wasn't picked up or payed for. While the customers have my sympathy, they were in breach of contract. – Peter - Reinstate Monica Jan 25 '22 at 10:23
  • @Peter-ReinstateMonica not only where the parents there in breach of contract, they also committed verbal assault, the husband committed several cases of battery when he took the tool from the baker's hand and struck at him. It was truly an exceptional situation that lead to the situation, but the baker tried to contact them the same day that the item was ordered to verify the details of the contract and was told to call back next week and cancel it by someone that was a 3rd party to the contract... Had the man taken the moment to explain the situation, the damage could have been mitigated – Trish Jan 25 '22 at 14:15
  • Also note that the parentes were trice notified that the back of the bakery was off limits: they were told that the bakery was not open for business yet, there was employees only on the door and they were told "You are not allowed in here". That is ample notification for trespass. – Trish Jan 25 '22 at 14:22
  • Not relevant to the legal question, but I'm surprised you can place an order for a £50 customized cake (which presumably has little value to anyone but the original orderer) without paying a non-refundable deposit, intended to protect the baker against this very situation. – chepner Jan 25 '22 at 16:08
  • @Trish I don't think that was a tool, it was a loaf of bread. – Acccumulation Jan 26 '22 at 06:24
  • @Acccumulation I thought promissory estoppel required a contractual relationship between the parties. If a court ruled that no contract was formed, how would the bakery be entitled to recover anything under that principle, since there wouldn’t be a contractual relatipnship? – BakedAlaska624 Jan 31 '22 at 11:25
  • @Tolga "promissory estoppel, where one person makes a promise to another, but there is no enforceable contract" https://en.wikipedia.org/wiki/Estoppel – Acccumulation Jan 31 '22 at 16:06
  • @chepner Of course there is a value. At some point in my worklife I had access to cakes like that, and would buy them cheaply (say $10 instead of $50) and bring them to work for my colleagues :-) They didn't mind if it said "To my loving wife on her 43rd birthday". – gnasher729 Jan 09 '23 at 18:07
  • I'm assuming more labor than the 5 minutes it takes to slap a quick bit of text on the cake :) £50 makes me think the bakery is taking a loss, rather than losing out on a truly obscene profit margin. – chepner Jan 09 '23 at 18:10

1 Answers1

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The contract was made the moment Mr. E asked for the cake, the baker agreed to make it, and (while or shortly before) the baker created a receipt ("ticket") at around 1 PM. The receipt is the evidence of what was agreed upon and likely contained the descriptor and the estimated finish time of the cake as well as the price1.

This means that the contract is not just oral, it is evidenced in writing, though not a written contract. The contract stipulated:

  • Mr. E will, at 3:30 PM, pay £50 to the baker as specified on the receipt.
  • The Baker will, at 3:30 PM, give a custom cake to Mr. E as described on the receipt.

The contract is enforceable, so even if Mr. E does no longer want the cake, it is his (to dispose of in any way he wants) and he owes the baker £50.

So if Mr. E does not pay, he is in breach of contract.

1 - The contract was formed by the meeting of the minds the moment both agreed on the price and service. This can be during or while putting it in writing on the ticket, which merely is the evidence of it, or shortly after said formation as JBentley does note. It is not material that neither party did sign: Mr. E got a copy of the ticket and the baker got a copy (so they know what to make)

Trish
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    Note that strictly speaking the contract was made the moment Mr E. asked for the cake and the baker agreed. The receipt, (assuming it was issued afterwards), merely acts as evidence of a contract which already existed. – JBentley Jan 24 '22 at 09:57
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    @JBentley it is unclear from OP when the ticket/receipt was made, and from my experience in bakeries, those tend to write down the text for cakes as one talks about what is wanted. In any case, the evidence of the contract was put into writing almost contemporarily to the verbal agreement, at worst few minutes apart. – Trish Jan 24 '22 at 10:39
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    @JBentley: "strictly speaking"? I'm not so sure. Consider a customer which spots a spelling error on the ticket, and hands it back to have it fixed. There's a definite intent to form an agreement during the verbal negotiations, but I would argue that the contract only comes into existence when the customer accepts the ticket. Luckily courts only have to deal with actual problems. In this case the exact moment where the contract is formed would not be disputed by the parties. – MSalters Jan 24 '22 at 11:41
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    @MSalters I would still stand by my original assertion. Consider the scenario where the baker refuses to fix the the typo; or he says he will print a new receipt and mail it to the customer but then never does. Consider also that it wasn't even necessary for the baker to give any receipt at all; the customer's refusal to "accept" an optional receipt with a typo cannot have any bearing on the matter. Agreed that in this case it is largely academic (but with the caveat that timing issues can be quite critical in other scenarios (e.g. purported acceptance close in time to withdrawn offer)). – JBentley Jan 24 '22 at 12:31
  • @JBentley If the order cancellation occurs moments after it was placed, the question of whether a valid contract was formed prior to the cancellation is pretty academic because at worst it would amount to a repudiation of the contract (though refusing to correct an unagreed typo might be a repudiatory breach) and the resulting losses for such an early cancellation would surely be trivial. – Will Jan 24 '22 at 13:16
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    In the US at least, the baker relied on Mr. E to fulfill his part of the bargain, and put forth his materials and work to make the cake. He is entitled to reliance damages (https://en.wikipedia.org/wiki/Reliance_damages). If I recall, this is an old principle of contract law that also applies in England. – Wastrel Jan 24 '22 at 13:58
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    @will Damages is not the only remedy for breach of contract. Consider e.g. specific performance in the case of sale of land. But even with damages, there's a distinction between the timing of contract formation itself and the timing of when contract formation is disputed. E.g. contrast a baker who is told by the customer that they repudiate the contract immediately upon receipt of the faulty receipt vs. the baker who is told the same after they have already baked and delivered the cake. In the latter, the question of whether or not a contract exists is material. – JBentley Jan 24 '22 at 14:21
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    @Wastrel - worth noting that the more basic principle is that even if a breach is proposed or another party's fault, one must mitigate damage, and damages will only be for actual damage caused. If E cancels or repudiates the order before the baker begins work, then its a breach with zero actual damage. Also the baker can't just continue work, if E has acted in a way that suggests he repudiates the contract (such as refusing to accept the receipt, which documents it), and then claim performance or damages, because he has his own duty to mitigate losses. Reliance damages don't go that far. – Stilez Jan 25 '22 at 06:33
  • @Stilez I didn't explain all that in my comment. Yes, of course the baker must mitigate damages if possible. The facts given by the OP suggest that the baker had finished or nearly finished the cake. Then the baker, to mitigate damages, would have to sell the cake to someone else. He might be lucky and get 50 or nearly that from a chance customer. Then he would have zero damages. If it's personalized for Mr. E., he might have to let it go for a considerable loss. The baker is owed the loss of "his benefit of the bargain." He can't simply throw the cake in the trash and claim he's owed 50. – Wastrel Jan 25 '22 at 13:52
  • @Wastrel he might however not be able to sell the custom cake at all before the ingredients - especially whipped cream - goes bad. That means, if the cake is unsold at the end of the closure, he might need to throw away the cake. – Trish Jan 25 '22 at 14:01
  • @Trish Indeed that is so. Cakes are perishable goods. He still has to make an effort to migitate damages, though. And if, as Stilez suggests, he never begins work on the cake because Mr. E. makes an "anticipatory breach" of contract, in theory Mr. E still owes the profit the baker would make because that's the baker's "benefit of the bargain" and he has lost it. As a practical matter, it's better for the baker to keep baking, but in very large transactions the loss of profit from a breach before the contract is performed may be the issue. – Wastrel Jan 25 '22 at 14:14
  • The ticket is not strictly speaking a receipt. A receipt shows that something has been received, which is not the case here. – phoog Oct 13 '22 at 02:30
  • @phoog It's a recipt of "I, baker, recieved your order" – Trish Oct 13 '22 at 07:34