The case under discussion has all the hallmarks of a contract law dispute. The present paper demonstrates the reasons as to why the defendant’s motion on the case should be overruled. More importantly, it shows why the plaintiff should be compensated as requested for wrongful termination of services.
As the judge in the case, I would rule in favor of the plaintiff and oblige the defendant to pay for the damages as requested. Available literature on such cases argue that there can be oral manifestations of assent in a contract (Barmes 437; Wilkinson-Ryan 2110), and that such oral manifestations mean that parties to a contract communicated to each other about their agreement (Estlund 381).
This in effect means that a contract may not necessarily be delivered in writing as argued by the defendant when citing the stature of frauds. In consequence, the rights of the plaintiff to gainful employment were effectively violated when the defendant chose to terminate the employment even after orally assuring the plaintiff that employment would continue for a substantial period of time.
Additionally, the ruling would be in favor of the plaintiff due to the fact that termination of employment was premised upon the wrong reason that was not listed in discussions for engagement. Here, it is important to note that “a contract is just a tool to procure a service, supply, construction or so on” (Page & Krauer 12). However, the law that binds the contract gives it its life and vitality to guide relationships and covenants.
The plaintiff’s contractual agreement with the defendant, it seems, was predicated upon the passage of the Madison State Bar examination. However, the defendant proceeded to terminate the services of the plaintiff before the lapse of the initial three years even after the plaintiff sat for the examination and passed.
This scenario is aggravated by the fact that the plaintiff’s services were discontinued after one year due to budgetary constraints rather than failure to perform as originally agreed during the discussions. It cannot therefore escape mention that the plaintiff was wrongly terminated.
Furthermore, the ruling would be in favor of the plaintiff due to the fact that she had not gone against any of the rules set by the defendant to warrant termination of services. Available literature demonstrates that “employment contracts may have post-employment obligations and covenants, including confidentiality agreements, noncompetition agreements, and nonsolicitation agreements” (Rashty 24).
The plaintiff fulfilled all these obligations yet the defendant proceeded to terminate her services to the law school in spite of the fact that the reason for termination was not of plaintiff’s making. It is therefore of essence for the defendant to compensate for the lost wages given that the oral agreement insinuated that the plaintiff would offer services for three years before a consideration for promotion was made. Fulfillment of employment obligations on the side of the plaintiff makes the defendant to carry the weight of blame.
Lastly, an offer was made by the defendant through a letter and the plaintiff accepted the offer through writing. This in itself demonstrates that the parties entered into a contract. An offer can be described as an expression of willingness to contract on specified terms, while an acceptance can be described as the final and unqualified expression of assent to the terms of a given offer (Chapman & Millbrook 1-2).
The defendant, therefore, cannot argue that he did not enter into a contract when in essence his offer had been accepted by the plaintiff in writing. This in itself demonstrates that the plaintiff is entitled to the damages sought.
Overall, the defendant’s motion is null and void considering the above named reasons. The judge should rule in favor of the plaintiff and make the defendant compensate her for the financial damages caused due to termination of services.
Works Cited
Barmes, Lizzie. “The Continuing Conceptual Crisis in the Common Law of the Contract of Employment.” Modern Law Review. 67.3 (2004): 435-464. Academic Search Premier. Web.
Chapman, Millie and Glenson Millbrook n.d., At a Glance Guide to Basic Principles of English Contract Law. PDF file. Web.
Estlund, Cynthia L. “Between Rights and Contract: Arbitration Agreements and Non-Complete Covenants as a Hybrid Form of Employment Law.” University of Pennsylvania Law Review. 155.2 (2006): 379-445. Academic Search Premier. Web.
Page, John M. and James J. Krauer. “Basic Contract Legal Reviews.” Reporter. 41.2 (2014): 11-15. MasterFILE Premier. Web.
In the case of promissory estoppel, consideration has centered on the notion of exchange or bargain as a reasonable basis for the elucidation of what is meant by promissory estoppel in payment of consideration under the law of contract. In Williams v. Roffey, the formalistic notions of consideration were extended to their limits but it was obvious that amendment of the contract facilitated Roffey to receive some financial benefits. The plaintiff carpenter entered into a contract with the defendant to do carpentry work in 27 flats. After completing 9 flats, the plaintiff suffered a financial strain. Smelling the foulness that the work may not be completed on time, the defendant offered the plaintiff an additional bonus of £ 575 for each flat that had been fitted out by him. After completing further 8 more flats, the plaintiff terminated work. The defendant was compelled to pay the bonus for the 8 flats and also the agreed rate for all 17 flats. The main crucial finding, in this case, was that both deceit and duress were absent from the plaintiff’s side. Further, the agreement was lucidly drafted by the defendant in the genuine interest of both parties. Though, Williams merely assured to prolong his original commitments, the practical benefit to Roffey was enough to make his promise obligatory. In promissory estoppel, there are occasions where some amendment in a contract involves one party surrendering some of his privileges in a scenario in which the other party offers no further consideration to substantiate the promise.
In Pinnel’s case (1602), it was held that payment of a lesser amount in fulfillment of a greater one did not cater to the requirements under the law of contract. The principle laid down in Pinnel’s case was again confirmed in Foakes v Beer (1884). In that case, Foakes had to pay £2,000 to Beer who filed a suit and obtained in judgment. A At this juncture, Foakes pleaded for more time and this was accepted by Beer that Beer would initiate no further proceedings against Foakes in return for immediate settlement of £ 500 plus agreed on installments until the whole amount was satisfied. However, Beer claimed an additional £360 by way of interest on the judgment debt. The court accepted her claim. It is to be observed through Foakes had repaid the entire loan amount (lesser capital sum), it did not discharge the greater debt. (Capital plus interest). It was held by the Court that Beer was entitled to a greater amount though she agreed to forego interest portion earlier since Foakes had offered no consideration for the promise made by him.
Thus, the ‘ruthless reason ‘of this common law stand can be applied to any new deal between Foakes and Beer.
A contractual connection presents between Foakes and Beer.
A new agreement is entered in which Beer assures or promises to Foakes that she will acknowledge less than is due to her under the contract.
Hence, Beer’s promise is not substantiated by a new consideration from Foakes.
It is assumed that there exists no new agreement substantiated by the consideration which absolves the liability under the original contract.
Therefore, Beer can resile her promise, be firm on her firm legal rights and sue for the full, original debt. ( Mulcahy & Tillotson: p. 93).
Further, it was held in Coke Littleton, where the stipulation was the payment of a lesser amount in full satisfaction of the entire amount and it is obvious that a lesser sum of money cannot be considered to be a satisfaction of a greater amount than a release of debt under seal, in whole satisfaction of the entire amount, it would be binding and valid.
In Re Selectmove Ltd, the company had large tax outstanding. One of the directors tried to conclude a settlement with a tax authority to pay these arrears in installments. However, the company never received any feedback about this arrangement from the tax authority even after the lapse of considerable time. The main question is whether the rule of acceptance by Inland Revenue can be regarded as acceptance of the proposal by silence and whether there are any events of consideration for the promise to acknowledge payment of the arrears by installments. The Court of Appeal found itself bound by the decision in Foakes v Beer and was not able to extend the decision in William v Roffey in favour of the appellant. (Oughton & Davis 2004: p. 132).
In D& C Builders Ltd v Rees, the Court of Appeal concurred with the defendant that the plaintiff builder’s contract to accept a cheque for a lesser amount due, instead of payment in cash, could be regarded as a new consideration to substantiate a promise to accept less as the facts of the case divulged a magnitude of coercion rather than a mutual and consensual contract. ( Kotz et al 1997 : p. 70).
Thus, in case of coercion, undue influence, the court may sanction some sort of protection to the plaintiff who had paid a lesser amount of consideration. Further as laid down in the Williams v. Roffey, in the absence of deceit and duress, the court may offer some sort of safeguard to the plaintiff. Further, as laid down in Foakes v Beer, if there exists no new agreement substantiated by the consideration which absolves the liability under the original contract, the court may not protect the interest of the plaintiff in case of lesser payments to the defendant.
List of References
.Kotz Hein , Flessner Axel and Tony Weir. (1997). European Contract Law. Oxford : Oxford University Press.
Mulcathy Linda & Tillotson John. (2004) Contract law in perspective. London: Routledge Cavendish.
Oughton David W & Davis Martin. (2000) Sourcebook on Contract Law. London: Routledge.
The case of Raymond Smith illustrates the conflict which can arise after signing the contract of sales. The major peculiarity of this problem lies in the following: the seller of the car officially disclaimed any liability for the injuries and repair costs caused by defects in the vehicle. A month later the buyer, Raymond Smith, received serious injuries due to the damage in the steering mechanism. The most important task is to determine what would happen if Smith sues the dealer for the breach of warranty. Overall, it is hardly possible to give a conclusive answer to this question because much would depend on the specific circumstances.
To analyze this situation, we should first define sales and lease contracts and identify the major components. As Uniform Commercial Code (UCC) states the contract of sales is the agreement according to which a seller passes the title to a specific good to the purchaser for a specific reward (The American Law Institute, § 2-106, unpaged). A leasing agreement implies practically similar terms with the exception that the lease is temporary. It should be borne in mind these types of contracts “impose an obligation on each participant that the others expectation of receiving due performance will not be impaired” (Beatson & Friedmann, 505). In other words, each person receives what he expects to receive. We can apply this principle to the case. Raymond Smith hoped to acquire a new and well-functioning car but his expectations were not fully met. This is one of the reasons why disclaimers of the dealer may be treated as unlawful.
In this respect, we need to discuss such a notion as the warrant of implied merchantability. The term merchantability can be interpreted as the suitability of the product for a particular purpose (The American Law Institute, § 2A-213). If we are speaking about cars or any other vehicles we should also mention such criteria as safety. Naturally, the dealer did not give any express warranty but contracts of sale usually imply this warranty. Scholars call it a reasonable expectation (Jennings, 426). This example indicates that Raymond Smiths expenses should be compensated.
However, this case cannot be discussed only from the perspective of the buyer. We need to consider the dealers standpoint. He may argue that that the defect in the steering mechanism was caused by the clients actions and under such a scenario the clients claims would be groundless and he will be eligible for no legal remedies. So, it is quite probable that Raymond Smith would receive no indemnity. To give a definite answer to this question, we also need to know whether the dealer has specified that the car had a defect. If he did so, his disclaimers are fully legal. Raymond Smith cannot be considered as a “good faith customer” because he was informed about the hypothetical problem. Again, we do not know these details; this is why it is rather difficult to predict the outcomes of the trial.
Thus, we can conclude that existing legislation does not offer precise guidelines for such cases. Most likely, Raymond Smith will be able to withstand his rights in court because there was an implied warranty of merchantability. But, there is also a great likelihood that his suits will be of no use. This can happen if the damage was due to his fault or the dealer warned him about the problem with the car. In this paper, we have just identified the major facts which should be taken into account by the participants of sales contracts, lawyers, and judges to avoid or settle such disputes.
Works Cited
Beatson, Jack & Friedmann, Daniel. Good faith and fault in contract law. Oxford University Press, 1997.
Jennings, Marjanne. Business: its legal, ethical, and global environment. Cengage Learning, 2005.
Should Main Line’s maximum and minimum lost profit amounts be revised downward for the following? Why?
The domestic distribution revenues of $3 million because the deal had not been finalized
Yes. Main Line Pictures Inc. incurred a loss of the $3 million which could have been obtained from the sale of the film in the home city (Albrecht, Stice & Swain, 2007). It was logical that Main Line Pictures Inc. could have been able to make this sale as it based its probabilities from previous performances, where Basinger has been used to perform. Due to her refusal to take part in performing the major role as agreed in the contract, Main Line Pictures Inc. has the right to be compensated. Thus, the $3 million should be used in calculating the loss or profit that the filmmaker could have gained or lost. The loss can be explained in the following calculation.
With Basinger in Leading Role
International pre-sales
$ 7.00
Domestic sale expectations
$ 3.00
Contributions
$10.00
Less production cost
$ (7.00)
Profit /lose
$ 3.00
The $800,000 of foreign pre-sales because they were “probable” not actual
The $ 800,000 which was not raised since the film was not acted should not be included in maximizing or minimizing the loss incurred. This is because in the last place the film was not launched. Second, there was no guarantee that the film will make such an amount of money, as one cannot be sure how many companies will run the film in their cinema theaters. Therefore, one cannot rely on this information as it is impossible to calculate the actual profit that could have been generated by running the film. Thus, the pre-sale of $ 800,000 should not be used in maximizing /minimizing the loss.
The loss of $2.1 million on the “Without Basinger” film
The $ 2.1 million loss which could be incurred by the filmmakers if they decided to shoot the film without Basinger cannot be used to calculate the lost contribution. This is because the figures are just based on assumptions and not actual figures. The figures are derived from the comparison made from various films done by the Main Line Pictures Inc. which involved Basinger and those produced in her absences (Biederman & Silfen, 2007).
In maximizing /minimizing the loss profit incurred, this amount should not be included because the film was not produced so the actual loss caused by Basinger not taking part in the film cannot be traced. Accounting principles prohibit the use of assumptions when calculating profit or loss.
Are the following relevant to the determination of lost profits to Main Line? Why?
Basinger’s $3 million salary for “Final Analysis.”
The salary proposed to Basinger for final analysis can be used as a start point in calculating the compensation. This is because it gives us a rough idea of what was to be her remuneration if she had taken part in a leading role. Thus Basinger’s salary is very relevant to this case. According to toSobel, (2002), Basinger was fully entitled to the salary and as the deal was set according to the contract it is important to note that this amount is very useful in calculating the amount of compensation to be awarded to Main Line Pictures Inc
The comparison of revenues for Basinger films with revenues for Fenn films
The comparison part cannot be used to determine the amount of compensation. Fenn was not considered a star-like Basinger and thus one cannot compare the remuneration for the two actresses. Her salary was not the same as Basinger. Secondly, since the film was not shot, the comparison would be of no relevance to Main Line Pictures Inc
Is the plaintiff’s expert correct in not attempting to estimate revenues for “Boxing Helena” beyond pre-sale amounts? Why?
No. It is unprofessional to calculate or estimate revenues of the film as if the film has been shot and run in various cinema theaters. This is because you can’t be able to estimate the actual profit or lose that can be attached to this film, one is not sure if the targeted customers will like the film and make orders to have copies made for them. We only anticipate making sales thus probability cannot be used to make the final judgment of the sale and revenue collected. Revenues should not be anticipated while losses should be provided for.
Should Main Line’s lost profits be adjusted downward to include an estimate of domestic revenues for the “Without Basinger” film? Would it have been valid to use the $1.7 million advance against domestic revenues as the estimate? Explain.
Yes. The profit should be adjusted in order to estimate the revenue expected from domestic sales. $1.7 million should be used to calculate the domestic revenue as it was an advance given to Main Line Pictures Inc. in order to enable those who produce the film. As examined by Weiler, (2002), the $1.7 million is a liability that must be shown in the calculation of the profit and loss incurred by the company.
Suppose Basinger had remained with the film and assume the $3 million profit shown in the plaintiff expert’s minimum damage calculation was correct. Is it reasonable to assume that Main Line’s pretax cash position would have increased by $3 million or would some part of this have been paid to others? Why?
It’s not correct to say that the profit would have remained to be $3milion; the profit could have increased, though some money could be used to pay other production costs.
If you disagree with the jury’s lost profit assessment, briefly prepare one of your own
I believe that the jury’s award was suitable for the case as the company lost a lot of profit and incurred a lot of expenses as it tries to organize and set the stages where the films were to be shot. The cost included in conducting the research for producing and selling the film should be included in the compensation (Campbell, 1997). The company should be content with the amount of money awarded to then as compensation because even when the film was shot later in September 1993 the total profit raised was of $2milion as domestic revenue and $ 5milion in the international field is slightly lower than the awarded amount.
References
Albrecht, W., S. Stice, A. Stice, E. & Swain, M. (2007). Accounting: Concepts and Applications. New York. Cengage Learning.
Biederman, D., E. & Silfen M, E. (2007). Law and business of the entertainment industries. 5th Ed. New York. Greenwood Publishing Group. Print.
Campbell, A., W. (1997). Entertainment law: cases and materials 4th Ed. New York. Austin & Winfield.
Sobel,S,.L. (2002). Entertainment law. Entertainment Law Reporter. 17(1).
Weiler, C., P. (2002). Entertainment, media, and the law: text, cases, problems. 2nd Ed. New York. West Group.
The development of the modern human society takes place under the strict control of various legal acts, laws, and regulatory documents that stipulate what should, and can, be done by a person in every particular situation and what should not be done under any normal circumstances. Law of contract is one of such regulations, and it is applied mainly in the spheres of business and economics. The contract law applied in the United Kingdom serves as the basis for the similar legislatures in the countries of the Commonwealth, as well as European states and the USA (Richards, 2007, pp. 3 – 4). The ideas of invitation to treat and an offer to the world as large are central to the contract law, and these ideas are rather helpful in examining and providing advice regarding the case under scrutiny.
Case Facts
The essence of the case under analysis lies in the fact that Games Plc, a seller of computer software and games, placed an advertisement in a local newspaper in order to boost the sales of its new product titled “Portable Games” (PG). The advertisement promised the PGs to be sold at £100 to the first ten persons to enclose cheques for the stated sum with their letters to the company or to arrive at the Games Plc store on the day when this special offer was effective, i. e. December 1st. One of the case characters, Thomas, posted a letter to the company on the same day, and enclosed the required cheque. Another case character, Peter, arrived at the store and waited the whole night long for the store to open.
However, Games Plc came to know that the sale of PGs would be impossible due to goods shortage, and placed another advertisement on December 2nd, according to which the special offer was considered annulled. Accordingly, Games Plc refused both to sell the games to Thomas and Peter for £100 and to compensate the expenses, material and moral, that both persons have faced.
Basic notions
General notions
As one can see, the major controversy of the case considered is that Games Plc assessed its advertisement in the newspaper as a mere invitation to treat, which was not legally or financially binding for it. At the same time, the customers of the company, and Thomas and Peter in particular, considered the advertisement to be an offer to the world at large. The main difference between the two is their legal force and consequences for both their producers and customers.
An invitation to treat
Thus, there are several definitions of the term “invitation to treat”, but their joint meaning is that this term has no binding meaning and is used to initiative negotiations on prices of certain goods: “An invitation to treat is an invitation to others to MAKE OFFERS which the person issuing the invitation to treat may accept or reject as they choose” (Dadybeen, 2004, p. 2). The cases that illustrate the point are, among others, Spencer v Harding (1870) LR 5 CP 561, Fisher v Bell [1961] 1 QB 394, Partridge v Crittenden [1968] 1 WLR 1204, and Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401, in which the courts ruled that by placing prices for their goods the defendant merely invited purchase offers, but not stated the final prices for their products. Accordingly, when a case is decided as an invitation to treat, all claims of a plaintiff are dismissed and a defendant’s actions are considered legal (Twig-Flesner, 2008, p. 6).
An offer to the world at large
However, when it comes to an offer to the world at large, also known as the offer to the public at large, the concepts of legal liability and binding character of the offer should be considered. Thus, scholars like Dadybeen (2004), Keenan (2007), and Riordan (2004) define an offer as a legally binding promise that becomes effective on its acceptance: “An offer is an undertaking by the offeror that he will be bound in contract if there is a proper acceptance of it” (Keenan, 2007, p. 272). The special attributes of such offers are specifically stated terms of contract provided the offers are accepted.
The case laws that exemplify the point include Harvela Investment Ltd v Royal Trust of Canada (Cl) Ltd [1986] AC 207 and the milestone case law in the English contract law practice, Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256. In both cases, the court ruled that the defendants’ advertisements constituted offers to the world at large because specific instructions were provided for offer acceptance in those advertisements. Since the customers performed those actions and accepted the offers, the defendants were obliged to pay the plaintiffs the full amounts of money promised (Elliot, 2007, p. 262).
Advice on legal rights
Thomas’ rights
Drawing from the above presented definitions, Thomas has all legal rights to sue Games Plc for violating the contract terms the company offered through its newspaper advertisement. The point is that the discussed advertisement contained specific promises by Games Plc to perform actions in relation to the people who accept the offer by performing the activities specified in the advertisement. Such situation, according to Dadybeen (2004), Keenan (2007), and Riordan (2004), is the perfect illustration of an offer to the world at large being made and accepted by those to whom it is made. Accordingly, if the offer is made and accepted, a contract is concluded, and the company that made this offer is legally bound to fulfill its promises and legal liabilities to the contract (Keenan, 2007, p. 272; Richards, 2007, p. 16).
Peter’s rights
Quite similar consideration of Peter’s rights in the case can be carried out on the basis of the same legal definitions of an invitation to treat and an offer to the world at large. In more detail, the advertisement by Games Plc offered games at considerably low prices to ten first persons who would attend the store of the company on the specified day. Based on the ideas by Riordan (2004) and Richards (2007), these elements of the advertisement can be considered as constituents of an offer to the world at large.
Specifically, the promise of a game sold at £100 can be viewed as a reward for those who accept the offer, while sending a cheque for the stated sum or attending the store are the instructions regarding the offer acceptance. Based on this, Peter can rightfully demand compensation from Games Plc, as far as he accepted its offer, while the company violated the contract concluded between it and Peter as a result of the acceptance.
Contract law case illustrations
The already listed case laws exemplify the points with even better clarity. Harvela Investment Ltd v Royal Trust of Canada (Cl) Ltd [1986] AC 207 is the case in which the court ruled that the advertisement placed by the defendants, i. e. the Royal Trust of Canada, contained actual agreement to accept the highest bid for its shares and therefore could not be considered a mere invitation to treat and is legally binding.
Another case law example is the famous Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 case, considered to be the first court decision that admitted the possibility of making an offer to the world at large through a media advertisement. Similarly to Games Plc, Carbolic Smoke Ball Company advertised its product in a newspaper. The company made a special offer and promised a £100 reward to those who would use its products and get unsatisfactory results. The court saw all elements of an offer and obliged the company to pay the promised rewards to all customers that accepted the offer.
Thus, in Games Plc’s advertisement all elements of the offer, i. e. instructions of its acceptance and reward for it, are observed, and Thomas and Peter can demand the payment or the product from the company through the court. The point here is that the court should consider the advertisement to be an offer on the basis of the precedent provided in the case laws presented as examples. In Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256, the court obliged the defendant to pay the promised £100 reward to those dissatisfied with their product’s efficiency, i. e. to those who accepted the offer. Similarly, Thomas and Peter, as persons who accepted the offer by Games Plc, should be compensated for the company’s violation of the contract that followed their offer acceptance.
Conclusions
So, the whole above discussion can be concluded by the statement that both Thomas and Peter have legal rights to demand compensation from Games Plc for the contract violation this company has carried out. The reasons for such a statement include the theoretical consideration by reputable scholars that allows differentiating between an invitation to treat and an offer to the world at large. In addition, specific examples from the English contract law and case laws prove the point that in Games Plc case, an offer was observed, and therefore the company is liable to all those who accepted it in a specified way.
Reference List
Books and Web sites
Dadybeen, S., 2004. Legal and regulatory framework: for business in the UK. iUniverse.
The case involves Lisa who owns a coach and agreed with John to have him do windscreen fitting for him for $1750. The job was to be completed by May 31st ready for two tours that Lisa had to handle. John failed to honor the agreement. The agreement also was that John will lose a significant amount of money for not fulfilling the promise. Lisa offered to pay John $500 more so that he may complete the work on the same day. John accepted the offer. John did the work on time and Lisa promised to pay. For cleaning the coach, John charged $250. However, Lisa only paid $1750 and refused to settle the balance. This case is used to address several emerging issues as discussed below.
Discussion
Consideration means what is exchanged between the parties to a contract to make the agreement valid. The contract will only be legally enforceable when both parties provide consideration1. It also defines the agreed standards upon which the contractor is expected to do the work. The contractor agrees to do the work by the set date and the client promises to compensate him for that. Consideration is essential in contract formulation and a contract cannot be valid without it. Consideration is not necessary for formal contracts such as those involving contracts under seal and contract records.
For simple contracts that are neither formal nor in records, consideration is important to make them valid. In simple contracts, the agreement is either made orally, in writing, or implied. It is what the promisee needs to do in return for the promise given by the promisor. The consideration is executory or executed depending on the time when it is given. If the consideration has already been performed, then there is executed consideration. If it is still to be performed, then it is referred to as executory consideration.
In this case, the consideration is executory because it is settled as the work is completed. Lisa will pay John if the work is done. This means that the consideration will not be settled until the work is complete.
Payment of $500 by Lisa to John
The agreement reached by the two parties John needs to be tested for validity. A valid contract has some elements that need to be fulfilled. The agreement reached cannot form a contract unless it meets the following elements:
There must be an offer and acceptance. Lisa offered to pay John $1750 if he finishes completing the Job by 31st and John accepted the offer. John failed to deliver the promise. Lisa made another offer of giving John an extra $500 for him to complete the job and John accepted that. There is, therefore, offer and acceptance in this case. The fact that John did not complete the work as earlier agreed and a new offer was made, means the earlier agreement for $1750 does not exist because of a counteroffer for an additional $500.
The parties must consent freely. The parties to the contract must agree without being coerced to do so. In the case above, Lisa and John enter the agreement freely and no one was forced to give his or her consent.
Contractual capacity. The two parties had the contractual capacity and, therefore, no they were legally allowed to enter into legal agreements2.
Consideration. This has extensively been discussed. The contract is incomplete without consideration. This is what is exchanged between the parties for the contract to be formed. For Lisa and John, there was executor consideration. Lisa agreed to pay for the work done by John and John consented to complete the work within the agreed time.
Intention to form Legal consequences. The parties must be willing to form legal consequences for the breach of the contract.
For this contract, to determine if Lisa was legally responsible to pay $500 will require one to consider several factors. Firstly, the agreement was reached and Lisa agreed to pay John $500 more to complete the job and John fulfilled the promise. There was no legal action agreed to be done on the party that breaches the agreement. The agreement was rich with all requirements to form a contract but there was no intention to form legal consequences. Lisa is, therefore, not legally required to pay the money.
Payment of an additional $250
Lisa does not have to pay the additional $250 that John is claiming because that was not part of their agreement. In the agreement, John was supposed to make a new windscreen fitting and not clean the coach. He did not, therefore, do as agreed in the contract. The $250 should not be paid by Lisa.
Methods of discharging a contract
Fulfillment of contractual obligations: When all the parties in a contract perform their legal duties in the contract, then the contract is discharged.
Death of one of the parties: The death of a party to a contract terminates the contract where the contractual obligations or duties could only be performed by the person who dies.
Breach of contract: A contract is discharged when one of the parties refused or fails to accomplish his/her contractual duties10. The contract requires that each party should discharge their contractual duties and without it, the contract cannot stand.
Lisa and Tour to the Hunter Valley
The coach tour to the Hunter Valley was not conducted as agreed. The agreement was to tour four famous vineyards which were not done. Time ran short and they could only tour 3 vineyards. This was a breach of contract because Lisa overslept. Lisa did not, therefore, strictly perform the contract.
Refunding the money for the canceled theatre
There was a frustration that rendered the contract incapable of performance. The theatre burned down and the tour had to be canceled. Since Lisa did not perform his contractual obligations due to frustration, then the customer has the right to be refunded the money4. The contract was not performed and, therefore, customers have not legal obligations to pay for the tour.
The contract between Victor Investments and Italiano Cuisine
The contract between Victor Investments and Italiano Cuisine involves an acceptance that was made by post. The offer and acceptance were made by post. According to contract law, the offer made by post can be accepted by post. The acceptance is acceptable the moment it is posted irrespective of the time when it reaches the other party. A good example is the case of Byrne v. Van Tien Hoven where it was held that the acceptance was valid. The plaintiff posted their acceptance on October 11th in New York. The defendants were not aware but it remained valid.
Offer and acceptance are the most essential elements of a contract. Italiano Cuisine Pty Ltd made an offer to Victor Investments Ltd on 1st September 2012 and the offer was accepted when Victor Investments faxed back stating the items they would want to be supplied and the date they expect them supplied. The law recognizes such offers and accepted as valid. Cuisine Pty Ltd’s reply indicates that they agreed with the terms and conditions of delivery as ordered by Victor Investment Limited. They packed the items for delivery on the day when they agreed. This means that they were performing their contractual duty.
According to the law of contract, the offer can only be revoked before acceptance. Once accepted, the offer cannot be revoked. Since the offer was already accepted, Victor Investment Ltd must receive the goods as ordered. Italiano Cuisine can argue that they manufactured the goods specifically for Victor Investment Ltd. The contract was valid because there were an offer and acceptance, free consent, consideration, and contractual capacity8.
Accepting the offer shows that the party is ready to fulfill all the contractual duties failure to which he faces the consequences. The position of the two parties is that Victor Investment Ltd accepted the offer and ordered the goods. They should, therefore, accept the goods when delivered. They should pay for the goods they ordered. For Italiano Cuisine Ltd, they have the right to sue the other party for breach of contract. The damage suffered should be compensated by Victor Investment Ltd.
Conclusion
An offer made via fax and accepted via fax is valid. The acceptance is valid when posted but not when it reaches the recipient, in this case, the offeror9. Victor Investment Ltd should therefore pay Italiano Cuisine Ltd for the goods prepared for delivery or compensate for the damage suffered.
The contract between Tom and Sally
Introduction
The agreement between Tom (a prominent businessman), and Sally, who acted as Tom’s escort to various social and business functions, will be viewed for compliance with the law of contract in this section. They formed an agreement in 2001and Sally was to give up her career and become Tom’s mistress. The promise was that Sally was to manage Tom’s Penthouse in Sydney and be available to him on Tuesday and Friday every week.
She would, however, have other relationships if she wished. She was to be paid $15000 a week and enjoy a rent-free apartment. The apartment would later be transferred to Sally after 10 years of commitment to the agreement. At the end of the agreement, she would also get $250000. Tom terminated the agreement in January 2012 but he refused to pay $250000 and transfer the property to her. Tom argued that the contract was not binding.
Advice to Sally
The contract is more than just an agreement. Although an agreement is one that matures to be a contract, there is more in a contract than a mere agreement. There are essential elements that make an agreement to be regarded as a valid contract. There has to an offer and acceptance. An offer is made by one person expecting that a specific person or any other person will consider taking it7. The consideration must be present for a contract to be formed.
The parties must consent without being coerced by anybody. The parties need to have the contractual capacity for them to form a valid contract. For Sally and Tom, most of the essentials of a valid contract were met. However, their agreement could not be enforced by law6. They did not show any intention to make the agreement legally binding. It would be very hard for Sally to prove that there was a contract between her and Tom. The contract is capable of enforcement if there is a written document that stipulated the terms agreed by the parties. Tom and Sally did not sign a document showing that they entered into a contract.
The advice to Sally is that she should not even bother to follow up the payment of $25000 from Tom or transfer of the property because it will be hard to prove without a document that proves that they agreed on such terms. The contract as stated by Tom was not legally binding. Tom is not legally required to pay Sally any money or transfer the apartment to her because the contract is not legally binding.
Sally cannot recover the part of the deal lost through the breach of contract by Tom. Sally completed her contractual obligation without fail but at the point of forming the contract, she did not make the contract legally binding5. If she has any document proving there was a contract between her and Tom, then she can present it in a court of law and get compensated.
Peta’s case study
Introduction
Peta is a participant in a skateboarding competition and is competing for the first time at Surfers Paradise Skateboarding Classic. She registered and paid the fee. She arrives at the venue early in advance but visits Mount Bullfrog tourist attraction first accompanied by a friend Haide. She suffers a fracture when her shoe slips on a wet piece of rock covered in moss. She is seeking compensation from Mount Bullfrog for the damage. There is an exclusion clause printed by Mount Bullfrog stating that Patrons enter at their own risk. The Mount Bullfrog Reserve is not liable for your loss or injury. This may bar Peta from compensation. This section seeks to find out if Peta can seek legal damage for the injury and refund of the registration fee she paid for the competition.
Advising Peta
The exclusion clause should bring to the attention of the other party before they enter the contract. For The Mount Bullfrog Reserve had put the exclusion clause clearly stating that “Patrons enter at their own risk. The Mount Bullfrog Reserve is not liable for your loss or injury.” However, Heidi and Peta ignored the official information before paying the entry fee. They did not read all the information that contained the above exclusion clause.
They ended up paying the fee and entered the Mount Bullfrog tourist attraction without reading the clause. They were warned by the statement that they enter at their own risk and no compensation should be expected for any damage suffered. The clause is valid whether they read it or not. After the fracture, Peta cannot be compensated because it is deemed that they entered the place with full information of what the stand of Mount Bullfrog is regarding the dangers suffered by the visitors.
Concerning the refund of fees for the competition at Surfers Paradise, Skateboarding Classic is negotiable. Peta argues that Skateboarding contracts have a clause that states that if events like the one that happened to her occur, the fees are refunded. The promoters even stated to her that they do not have such a provision in their contract. However, Peta should produce a contract that has the provision of refunding the competition fee and prove that the tragedy that happened to her is one of the ones provided for in the contract. Mostly in the receipts when one pays such fees, there is an exclusion clause that states if they are refundable or not3.
Conclusion
The exclusion clauses are valid whether they are included in the contract so long as they are printed and open for the parties to read before they enter the contract. The exclusion clause at The Mount Bullfrog Reserve is valid because it was clear to Peta before entering the tourist attraction site. She read but ignored the important information regarding such tragedies like what happened to her. She can, therefore, not seek redress for the damage she suffered. She is deemed to have been fully aware that The Mount Bullfrog Reserve does not bear the responsibility of whatever happens to those who visit the tourist attraction site.
Bibliography
Atiyah, P, The Rise and fall of Freedom of Contract, Clarendon Press, London, 1979.
Various aspects of the contract that have occurred
Under contract law, there is a difference that has been made in relation to ‘offer and acceptance’. There are various stages that a contract will go through before they are validated and signed. The case of James and the pet toys shows an incidence in which he was given the offer and responded to it. There was first an offer by the company when they advertised the toys in the magazine. It should be noted that as they advertised for the offer, they clearly stated that they were ranging from five dollars per toy. This means that the toys were of different prices but the cheapest was going at five dollars. The company made the advertisement based on the current rates at which the toys were going for which meant that they were subject to change. James reacted to the advertisement immediately by writing a mail requesting for ten such toys to be set aside. As per the details of the letter, it implied that he was in need of the ten toys that were going for five dollars each.
There is a distinction between the day and moment that the advertisement was posted in the newspaper and the time that was taken for the letter to get to the manager (Burton, 2008). Time factor may have had a considerable effect on the changes that were made to the prices of the toys. James seemed to accept this fact and was hence willing to part with two extra dollars to obtain the toys. It was however contrary to what he had been told by Mary about the prices of the toys. Mary acted by responding that instead of having to obtain them at nine dollars each, he would be given the offer at eight dollars each. There are various rules concerning the offer and acceptance of contracts by means of post. One of these rules is that the offer comes valid the moment it is posted. In looking at the legal implication of the offer that James was given and the amount that he had to pay on the counter, we find that Mary breached the agreement. She had written to James informing him that he would be given the toys for eight dollars each but was instead given for nine dollars each.
There is however another rule that governs acceptance which requires the person on the receiving end to accept the offer after receiving the mail. Mary may hence be justified under the contract law to give James the toys at nine dollars since he had not received the letter. The offer that was given to James was still pending based on the acceptance rule considering the fact that the letter had not reached him. Mary may be justified to think that the offer had not been accepted by James and hence stating a different price for the same. The action that was taken by James of refusing to pay for the additional funds that he had been charged shows an assumption that he had made. He may have probably thought that by making the request in advance and sending the payments, the contract had been finalized and he was only to collect the items. His refusal action was not legally binding to the company because they had sent him a letter with the details of the new agreement. However had the letter not been sent to him, at the time he was coming to collect the toys, then it would have been assumed that his offer of seven dollars per toy had been accepted.
Contractual aspects of this arrangement
The case would be treated differently if Mary and James were siblings and the contract would have been considered void by Petz R Us. This is because James used a legally unaccepted means to send the money. Mary would have been considered to act in favoritism to her brother by receiving the money via post and also responding to his request. If the case was to be taken to court and analyzed critically, Mary would have had a lot of questions to answer and be declared guilty in the matter. As the manager of the company was not supposed to accept money through illegal means just because she was dealing with her brother. When it comes to business contracts, contracting individuals are to leave family ties behind and act according to how the law requires. It would have been assumed that in the process of the two contacting each other concerning the toys, Mary may have agreed to reduce the price simply because she was dealing with the brother.
James on the other hand may have told the court that he refused to accept the final offer because Mary acted in a way that convinced him that he was able to get the toys at seven dollars per toy which prompted his action to visit the stores immediately. In defense, he would also have said that he did not take the response based on Mary being his sister but the manager of the company (Busch, 2002). By receiving the money and responding to the letter that was basically directed to the company, the contract will be binding to the company. The action of the court will basically depend on the reasons that will be given by James to refuse the offer. It may also be suggested that there were actually no changes that were made to the prices of the toys as stipulated earlier. The five-dollar offer may have expired in the process when the letter was yet to be received by the company. By the time the letter had been received, the prices may have shot up to nine dollars per toy and hence the previous offer being declared void. Mary being the brother of James may have felt for the inconveniences that may have been caused to him with the increased prices and settled for a bargain. The bargains that Mary and James were involved in may not have been approved by the company based on their relationship.
The nature of the contract, in this case, would have been considered biased towards James who would in turn buy the products at a lesser price than the company was offering them for (Anson, 2009). James may have also reacted faster than Mary had thought. She probably wanted to dispatch the toys secretly to him with a lesser price and hence sealing the deal successfully. However considering the fact that he could not be given the toys at a lesser price, it implies that the deals were not according to the plans of the company. The personal plans that Mary had to forward the toys at a cheaper rate may have been jeopardized when James came in-person to collect them. Mary was helpless in this and therefore had to distance herself from the deals. Apart from the agreements being declared void by the court of law, Mary will have to compensate his brother for the damages caused to him by implying that the prices were negotiable.
Legal rights that James has against Mary or Petz R Us
In case James goes to the shop and discovers that there were no toys, he will have a right to sue Mary for breach of contract. It was expected that by reacting to his mails and also receiving payments for the toys, she was ready to set aside the toys just in case they run out of stock. In his letter to the company which was received by Mary, he had requested that ten toys be set aside for him (Kelly, 2002). This he did by sending a consideration for the same which he believed was a total of ten dollars. The subsequent reactions also implied how much James was in need of the toys and dint mind paying more for them. When Mary wrote back and said that the toys were going for nine dollars, he did not enter into bargains by demanding to know why they had shot up from five to nine dollars. He simply added two dollars and requested the company to give him a discount for purchasing in bulk. Even if his quotation was not acceptable, Mary should have kept for him the toys until when a conclusion was made on the price of the toys.
Breach of contract usually occurs when one party acts in a way that will suggest that the contract will not be completed even after they had implied the same. A sales contract will only be complete if the goods have moved from the hands of the seller to the hands of a buyer in receipt of consideration. In this case, the contract was half way complete because Mary had received a certain consideration for the goods (Surhone, et al, 2010). Accordingly, apart from the changes that were made at the last moment, James knew that the contract will be completed as soon as he gets to the stores and was given his products. The first charge that she was to be charged for was an action implying to James that the toys were still available for him by accepting payment prior to being given the toys. She will also be required to compensate James for the damages and inconveniences caused by making him travel all the way only to find the products missing. According to the rules of contract law, parties to the contract have a right to be informed of any changes that may be made to imply that the contract will not be completed according to the earlier terms. The party that does not give such information on time will be liable to fines and compensation to the aggrieved party.
James will also charge Mary for allowing him to use legally unaccepted means of paying for the offer. It may be realized that the goods were sold because James had not given the required consideration to Mary for the agreement to be complete. Mary has hence clearly known that the method that he used to receiver the consideration was not legally binding and hence not kept for him the toys. For this reason, she wouldn’t have accepted the consideration and asked James to use the correct procedure. There was hence misinformation concerning the method of receiving a consideration for the products on offer. Such misinformation was to be blamed on Mary who is the manager of the company and at the same time encouraged James to purchase the goods using the wrong procedure.
Reference list
Anson, W., (2009). Principles of the English Law of Contract and of Agency in Its Relation to Contract. London: General Books LLC,
Burton, K., (2008). BUSINESS OFFER and ACCEPTANCE CONTRACT. New York: Alpha Publications of America, Incorporated,
Busch, D., (2002). The principles of European contract law and Dutch law: a commentary. London: Kluwer Law International.
Kelly, D., (2002). Business law. New York: Routledge.
Surhone, L., et al, (2010). Offer and Acceptance: Contract, Estoppel, Misrepresentation, Unjust Enrichment, Smith V Hughes, Carlill V Carbolic Smoke Ball Company, Invitation to Treat, Option Contract, Implied-in-Fact. London: Betascript Publishers.
Subcontracting is the entrusting of partial or all of the contractors’ duties or responsibilities to a subcontractor. Subcontractors are regarded independent and answerable to their own subcontractors. In this case, Foodmart is likely to win for the breach of contract that has been committed by their contractor Masterpiece. In a contract, the main contractor should acquaint the client with all the information and necessary details that may be required by the client (McGuinness 2007). Before final decisions are made with regard to a contract, the essentials of a valid contract like offer, acceptance, consideration, and capacity must be in existence (Killion & Dempski 2000). The decision to make Masterpiece construction liable is informed by the following reasons. To begin with, the failure by Masterpiece to disclose the subcontractor to Foodmart was not in itself in good spirit. In contract law, the subcontractor is supposed to be approved by Foodmart to help facilitate payment and other communication that may be necessary (McGuinness 2007).
To make the matters serious Builder construction failed to adhere to the required standards of the client making the work below quality. The client will therefore have the right to repudiate the contract on the basis that the terms of the agreements have not been upheld (McGuinness 2007). Another reason why the plaintiff is likely to win the case is the fact that the client has delayed. The defense of commercial impracticability may only be valid in instances where there are frustrating factors like substantial price increase or natural factors like weather that might have frustrated the process (Killion & Dempski 2000). Foodmart can argue that the period has lapsed and are therefore not obliged to honor the contract. The fact that Masterpiece construction was in a position to secure more contracts is not sufficient to make the company subcontract to another that cannot ensure quality standards. Foodmark can therefore peg their argument on this and claim compensation for the losses suffered. Foodmark’s case file for an injunction is likely to be administered in the court ruling as a means of ensuring that the contract breach is terminated. An injunction is also likely to be made to stop the subcontractor from further doing a poor-quality work (McGuinness 2007).
The remedy of specific performance is instituted in instance that other monetary damages cannot restore all the parties to their pre-contract period. The court therefore is likely to rule in favor of the plaintiff demand of getting quality service and penalties that are caused because of the delays made. There are various defenses for contract formation and enforcement. The failure of parties to conform to the essentials of the contract can be taken as serious reasons to make the contract unenforceable (Killion & Dempski 2000). The presence of vitiating factors like failure of legal capacity, consideration, duress, or illegality of the contract will make the contract unenforceable. Mistakes that are made at times of making contracts are also a defense for a contract. At enforcement, the parties can claim factors like frustration of material matters to be a reason for breach of contract (Killion & Dempski 2000). For instance in the case provided, Masterpiece can claim that the changes in the conditions of agreements like the prices had changed and therefore lacked enough resources to discharge their obligation as agreed. In conclusion, the legality of a contract depends on the adherence to the essentials of a contract. Both parties to a contract have rights and obligations that they can explore to claim defenses when legal cases arise.
The cases involving issues associated with the contract law are rather controversial and debatable because of a lot of details and conditions that can influence the decision. Burt, a male taking the leading position in the company located in New York, planned the vacation and asked his 16-year old intern and assistant Amy to choose the trip for him and sign the required agreements. The problem was in the fact that Burt decided to cancel the vacation, and he needed to receive the refund related to the reservation payments. Besides, he planned to receive the full refund for goods purchased for the trip.
However, it is important to state that Burt decided to cancel the trip only five days before the scheduled date, and he faced a challenge to get back his payments and deposits. The paper aims to present the analysis of the case and provide recommendations for Burt to follow to resolve the situations with benefits for him.
What do you advise Burt about the validity of his agency agreement with Amy and why?
Agreements and contracts can be discussed as valid only when the following seven conditions are met: offer, acceptance, consideration, legality, capacity, consent, and writing (Mann & Roberts, 2012, p. 121). In the case of the agreement between Tours and Amy, the important condition of the party’s capacity was not addressed because Amy as a 16-year old girl should be regarded as a minor. In this context, a minor is a person who is under the age of 18, and who has no legal rights to sign valid contracts (Beatty & Samuelson, 2015, p. 235). From this point, the made agreement should be discussed as an avoidable contract that can be canceled only by Amy (Beatty & Samuelson, 2015, p. 317).
Therefore, Burt is right to state that the agreement is not valid, and he can ask Amy to disaffirm the agreement and focus on the restitution. A minor can terminate the agreement without concentrating on the time limits represented in the contract (Beatty & Samuelson, 2015, p. 317). The main support for these decisions is the fact that the discussed agreement is voidable.
What do you advise Burt about Tours’ authority to make reservations/contracts on his behalf and why?
Tours can make a contract on behalf of Burt, but in this case, the man should sign the document ensuring that Tours has such a duty. He also could ask the representative to sign the agreement. Still, Amy cannot be discussed as a legal representative for Burt because she is a minor (Beatty & Samuelson, 2015, p. 427). In the case of Burt, there is no valid agreement, and it is impossible to speak about the conditions related to the tourist. Besides, there are no sanctions regarding the cancellation policy and related to Burt. The man should accentuate the fact that he did not agree with Tours to reserve a room in the Hotel, and he did sign the contract. The signature made by Amy cannot be discussed as authorized or valid because the representative is under the age of 18.
What do you advise Burt about his contract with Hotel and whether he can recover his deposit and why?
The contract with Hotel can be discussed as unenforceable because he was created and accepted without the focus on the aspect of the representative’s capacity. On the one hand, the contract could be valid because Amy as the representative mentioned two names in the signature, including the name of the represented person and the name of the representative (Beatty & Samuelson, 2015). On the other hand, the signature of the representative who is under the age of 18 cannot be discussed as valid to support the contract relations. Burt’s signature was not presented in the document. Referring to the fact that the document was written with such mistakes, it could not be discussed as enforceable (Mann & Roberts, 2012).
Therefore, it is possible to advise Burt to make Amy terminate the contract as a minor. In this case, Burt has no obligations to Hotel or Tours. However, Burt can face difficulties while recovering the deposit because the signed check was provided to Tours without the support based on the written contract (Mann & Roberts, 2012). Burt needs to accentuate that any activities made according to the unenforceable agreement were illegal, and the use of the deposit by Tours and Hotel was also illegal. In this case, Burt can hope to receive the full refund.
What do you advise Burt about whether the Statute of Frauds applies to this agreement between Jordon and Burt and why?
The Statute of Frauds covers agreements that include sales of goods that cost $500 or more, as it is in the case of Burt (Beatty & Samuelson, 2015, p. 392). It is possible to refer to the Statute of Frauds while discussing the situation with Jordon and Burt because according to the law, such agreements need to be provided in the written form. For the agreement associated with such type of a sale to be enforceable, it must be presented as a written document and signed by the parties.
If the agreement is in the oral form, it is unenforceable, and it is possible to ask Jordon to compensate for the purchase because the agreement was illegal about this condition. However, there are exceptions to the Statute of Frauds and the commercial code that can be applied to this case, and chances of Burt to receive the full refund are minimal (Mann & Roberts, 2012, p. 12). The other important aspect is that Burt was notified about the conditions of the sale and about the refund policy followed by Jordan in advance before the luggage was delivered.
What do you advise Burt about whether the agreement between Jordan and Burt is a valid, enforceable sales agreement so that Burt should receive a full cash refund for the luggage – and why?
Even though the Statute of Frauds requires the contract between Jordan and Burt to be in a written form, the Uniform Commercial Code provides the exception to this situation (Beatty & Samuelson, 2015, p. 404). If the discussed goods were delivered and paid for, but the agreement was not presented in the written form, the contract could be discussed as valid and enforceable. Also, Burt was informed about the refund policy followed by Jordon, and he knew that the full cash refund was possible only during the 30 days after purchasing the goods. Therefore, Burt should be advised to accept Jordon’s proposition related to store credit, as the discussed agreement is enforceable.
Conclusion
Referring to the conducted analysis of the case, it is possible to state that Burt can receive the required refund in the situation with the paid reservations. Burt should use the opportunity to persuade the court that the agreement was invalid or voidable because it was signed by a minor who could serve as the representative in this case. However, Burt cannot receive the full refund for purchasing the luggage, and the best option for the man is to accept Jordan’s proposition for a store credit.
References
Beatty, J., & Samuelson, S. (2015). Business law and the legal Environment. New York, NY: Cengage Learning.
Mann, R., & Roberts, B. (2012). Essentials of business law and the legal environment. New York, NY: Cengage Learning.
The following is legal advice of the Acorn Computers (A) company’s legal position concerning the contractual problem with B supermarkets.
It is a general rule that when an offer is made as was done by B supermarkets, the contract becomes binding the moment an acceptance is made by the offeree. In this regard, the acceptance is deemed effective the moment it is received by the offeror. For this to hold, the offeror should specify that acceptance takes effect when it is received in writing (O’Sullivan and Jonathan 8). However, in this case, B supermarkets did not give such a condition. On the contrary, they instructed the acceptance to be mailed within fourteen days. As a result, the postal rule which is an exception to the general rule applies.
According to the postal rule, acceptance is deemed to have taken effect the moment a reply is properly posted and stamped. The postal rule supersedes the general rule whenever the reply should be communicated by post. It should be noted that the contract will still be binding even when the letter is delayed. However, it does not hold when the actions of the offeree cause the delay (O’Sullivan and Jonathan 12).
In Adams v Lindsell (1818), an offer was made to sell wool by the defendant and required that acceptance be communicated through the post. The plaintiff did reply through the post in time, but the letter was delayed. The defendant sold the wool to another person assuming the plaintiff had no interest in the offer. The court held that the contract was biding since the plaintiff replied and the date of acceptance was taken to be the date when the letter was posted.
In Re London v Northern Bank (1990), it was held that acceptance takes place when a letter is posted. In this regard, the day when a letter of acceptance bearing the correct address is deposited in the post box is taken to be the day of acceptance.
It should be noted that the offeror has the authority to revoke an offer before the offer is accepted. In addition to a letter, the postal rule also recognizes telex and faxes as modes of communication (O’Sullivan and Jonathan 356). However, in the case of revocation, the communication takes effect when it is received by the offeree, and not when it is posted. Moreover, if the communication arrives outside working hours or when the machine is not on, it will take effect the next working day (O’Sullivan and Jonathan 357).
In Henthorn v Fraser (1892), the defendant revoked the offer before receiving acceptance from the plaintiff. The Court of Appeal held that since the acceptance had been posted before the revoke was received, the revoke was ineffective and the contract was legally binding.
It is important to note that the offer by C to B cannot revoke the initial offer of B because that is a different offer from a different entity. For an offer to qualify as a counter-offer, it must be from the offeree. In this case, A had accepted the offer by the time the revoke from B was received. Consequently, the contract is still legally binding and A can sue B for breaching the contract.
Works Cited
O’Sullivan, Janet and Jonathan Hilliard. The Law of Contract. Oxford: Oxford University Press, 2011. Print.