Contract case study

Contract item studyContract Case StudyContracts are a legal binding agreement make surrounded by two or to a greater extent parties to work on and to conduct all the scathe binding to it. only business needs to form a film during its business life cycle. The two historic aspects of a contract are the qualifying and bankers adoption. The party that makes an furnish in a contract is called the put forwarder and the party who accepts the protract do by the offeror is called the offeree. T here are many terms and conditions verbalize in the contract which boast to be veritable by two the parties to enter in to a legal binding contract. The offeror moldiness state his readiness to create a binding contract by accepting the terms to the offeree. The offeree can offer to form a binding contract an individual, group of people and to the public. Offers made to the public are considered as an invitation to treat since it welcomes offers by many people within a stated date in which the offers need to be made. But there is a operative difference among offer and invitation to treat. The response to an offer is usually borrowing whereas in the gaffe of invitation to treat, the response would be an offer. Invitation to treat is more as an invitation to make an offer by understanding the terms. Invitation to treat helps in getting a variety of offers and therefore increasing the chance to accepting a better and a more profitable contract.In the courtship study given, florid Antiques had posted an advertisement on Monday through the internet which had stated For sale, three Victorian style beds, gorgeous, 5000 each, cash, bequeath brighten up any bed room This advertisement is an invitation to treat since it was made to the general public and a response to this invitation to treat would be considered as an offer. This relates to the shimmy of tinamou v Crittenden 1968 An advertisement by Partridge appeared in the magazine Cage and Aviary Birds, whi ch contained the words quality British, bramble finch cocks, 25 shillings each. Partridge was supercharged with illegal offering for sale of a wild bird against s.6(1) of the Protection Birds Act 1954 Therefore this give form a unilateral contract since the offer to be in a legal binding contract has been decided by only one party. David, the manager of blank Halls Ltd sends an email to chromatic Antiques right away saying that he is stakesed in stealing all three Victorian style beds at the cost of 4500 each and enquires about any acknowledgment facility acquirable upon this purchase. This is an offer made by White Halls Ltd to Golden Antiques. Therefore in the current situation, White Halls is the offeror and Golden Antiques is the offeree. The offeree ( Golden Antiques) must decide upon the offer made by White Halls Ltd and can take any decision since accepting or rejecting the offer is completely in their hands. The response made by White Halls Ltd must be considered just as a request for nurture about the terms and other opinion available in the contract. White Halls soak up not accepted the original terms and cannot be considered to be a takings offer. Therefore a request of randomness cannot enforce a binding contract. A similar case related to this would be the case of Stevnson, Jacques and Co V McLean 1880 Mclean wrote to Stevenson asking if he wanted to buy iron ore at 40S per ton in cash, and the offer was open gutter Monday. Stevenson asked if the goods were available on credit. They accepted no answer. On Monday afterwardnoon they contacted the defendant to accept the offer, but the iron had already been sold to someone else. The plaintiff won the case against McLeanGolden Antiques acted to the email sent by White Halls Ltd seeking information about the footing and the credit facility being available. Golden antiques in response said the following We are not prepared to sell for slight than 5000 each. Credit facility only avai lable if your guarantor is acceptable to us. Please confirm by close of business today if interested.By stating this Golden antiques look at got made a counter offer to their initial offer. This counter offer states that the contract can be enforced only at the original price mentioned and their terms. They have taken into love about the credit facility and have stated that it is available only if White Halls Ltds guarantor is acceptable to them. They have in any case mentioned that the acceptance to the counter offer has to be conveyed by Tuesday. Stating the time skeletal frame for the acceptance, Golden antiques have made it very clear that the acceptance to this offer allow for not be accepted after Tuesday and therefore be communicated properly. Counter offer is an offer made against the previous offer by the former offeree after taking into consideration the request of information by the offeror. This counter offer is usually the final offer made in the good interest of both the parties to form a legal binding contract. The counter offer nullifies the previous offer made by the offeree. No contract can be create if this counter offer is not accepted by the offeror. A relevant case would be the case of Hyde V Wrench 1840 Wrench offered to sell his grow for 1,000 but Hyde declined. He offered 950 and then Wrench refused to accept. Finally Hyde agreed to buy the farm at old price but Wrench refused, therefore a counter offer destroys the original offer.After providing a counter offer, Golden antiques will now be the offeror and White Halls Ltd will be the offeree. The counter offer will become a legal binding contract if White Halls Ltd accepts the counter offer made by Golden antiques. Golden Antiques have contract that the offer is valid till Tuesday and any acceptance received after this date will not be taken into consideration. This says that they need a response immediately through effective and fast means of confabulation. The case related t o this will be the case of Tin V Hoffman 18734 in this case the offeree was qualify to reply by post, any method which to be more effective or faster than post was also acceptable. In this case, the offeror had specified the means of communication through which the acceptance had to be communicated. The court linguistic ruled that the offeree must accept this technique of communication or the next best preference to communicate to the offeror. Relating this to the case study, Golden antiques have said that the acceptance to the counter offer need to be made by earliest on the Tuesday which made it obvious that a reliable and fast communication was necessary. If this was not communicated properly or was delayed overdue to a slower means of communication, the offer becomes invalid due to lapse of time.A contract come into existence only when the latest offer or counter offer is accepted. Acceptance conveys that two or more parties have agreed to all the terms and condition specifi ed in the contract. The most important part of acceptance would be the method of communicating. This is important because acceptance is not effective if it is not communicated. The other important aspect of acceptance is that the parties must obey to the way of communication decided upon i.e. if the offeror has specified a means a communication through which the acceptance has to be communicated, it must be followed. This has to be communicated effectively and within the time frame in which the offer will be valid or it will be cancelled due to lapse of time. If revocation is made before the acceptance takes place, the offer will be cancelled.After receiving the counter offer made by Golden antiques, David faxes the acceptance stating his willingness to purchase the three Victorian style beds at 5000 each. This acceptance garner also includes the earn from Black Halls Ltd, the guarantor for White Halls Ltd which states It is our policy to ensure that our subsidiary, White Halls Ltd remains solvent at all times. This letter of acceptance by the offeree was not transmitted properly and therefore was not received by Golden antiques. A case that relates to this situation will be the case of Felthouse V Bindley 18625 Felthouse tried file a case on the basis of breach of contract however Bindley had the case favoured to his side since it was stated that acceptance was not communicated thus a contract was never really formed.David posted his acceptance on the same day at 5pm even when he was sensible of the fact that there was a postal strike on that day. David was well aware that the letter of acceptance would not reach the offeror, Golden antiques at the right time. Therefore, David must have opted for a better means of communication which would be reliable, effective and fast. The time frame being given in the counter offer shows the goad and importance of communicating the acceptance as fast as possible. But posting the letter is considered as being receive d according to the postal rule thereby leading to forming a legal binding contract. postal rule apply where the means of communicating the acceptance to the offer is post or telegram. Postal rule states that the acceptance is effective on the date and time at which the letter is posted and not when the letter of acceptance is received. The postal rule ignores the facts of the time taken to deliver the post and any other circumstances such as post being lost. The case that satisfies this will be case between Adams V Lindsell 18186 because to the wrong address the post by the Lindsell reached Adams by 5th of September. Adams replied back to Lindsell but the letter reached by 8th of October and the time limit was till 7th of October. The defendants argued that the time limit specified had been passed and they didnt heard a reply hence the offer was already lapsed. However if Lindsell would have addressed the first letter correctly then the plaintiffs could have managed to reply back in time. However the plaintiffs won the case since the postal rule was being applied.On the other hand, there are many exceptions to the postal rule. The postal rule does not apply if the method to communicate the acceptance has been specified by the offeror. White Halls Ltd and Golden antiques had initially started communicating through e-mails and ways a very reliable and fast way to communicate among the parties. Golden antiques showing the urgency and the given time frame show that they were expecting a response from White Halls Ltd through e-mail or a fax. This can be seen when Golden antiques said Please confirm by close of business today if interested and can therefore be taken as an exception to the postal rule. The fax sent by White Halls Ltd was not clear and hence the acceptance was not communicated effectively. David from White Halls Ltd must have tried to send through a different fax simple machine or might try another time. David must have e-mailed the acceptance lette r to Golden antiques which was their initial way of communication. This could have been better than posting a letter of acceptance when he was assured about the delay which will be caused due to the postal strike. Therefore, the postal is not applicable in the case of White Halls Ltd and Golden Antiques. A similar case would be Entores ltd V Miles far East Corporation 19557 In this case it shows that both the parties had instant communication method (that is telex in this case). Entores sued the M E C for breaching from the contract. The court stated that the negotiations were made by telex so instant communication was available. The defendants drop to argue with postal rule, however it was ruled that if acceptance was made on telex then the postal rule wont doesnt apply.Postal rule does not apply in the above lucubrate case and the acceptance was not communicated. There has been lapse of time and no contract was formed. Therefore the offeror, Golden Antiques is desirable to form a new contract with the third party and has no legal binding contract existing with the previous party.Roger an accountant who has prepared the fiscal statements for Golden Antiques called up on Wednesday morning saying that he is interested in buying the Victorian style beds. In this situation, Roger is the offeror and Golden Antiques is the offeree. Roger has provided the assistance of preparing the financial statements are half the cost he usually charges. This is an example of past consideration and a past consideration has no value in the future. There can be no consideration given for an activity performed in the past. Its the parties own will to charge for an activity to be performed and form a contract for which he will get a return from the other party which are agreed upon by the parties. A relevant case here would be the case of Re McArdle 19518 the agreement to pay the money was not enforceable as a contract as the work had been completed and the consideration was whol ly passed. The offer made by Roger is valid since there has been no contract between Golden Antiques and White Halls Ltd.To accept this offer, Golden Antiques sends a letter of revocation of the offer on Wednesday to David of White Halls Ltd saying that the Victorian style beds are no longer for sale. A revocation is the termination of an offer. Once a revocation has been communicated, the acceptance of an offer will be ignored and is no longer possible. Revocation is an exception to the postal rule and is considered only when revocation is received by the other party. In a situation where offer and revocation was made on the same day, the decision will depend on whether the offer or the revocation was received first. This will be further explained by the case of Byrne Co V Leon Van Tienhoven 1880? Tienhoven tried to withdraw the offer, they posted the letter by 8th of October which was received by Byrne Co by the 20th of October. It was ruled that the offer couldnt be withdrawn s ince the acceptance was already into existence due to the postal rule. In this case the time gap between the revocation and offer being received is very small and is therefore harder to judge whether revocation is effective or not. Golden Antiques received the acceptance letter by post at 345pm on Thursday and the fax on revocation is received until 400pm. In my opinion revocation should be effective since the posting of the letter is not considered as a means to communicate acceptance in this case.Advise on the parties legal positionThere are three parties in this case which are Golden Antiques, White Halls Ltd and Roger. The above detailed case shows that there is more evidence in the favour of Golden Antiques than that of David. Golden Antiques have obeyed the terms of forming a contract and on the part of revocation. They have made it clear on the terms of the contract and also have given the time frame in which the other party must respond and give in their acceptance.The adver tisement made by Golden Antiques is an invitation to treat. David the manager of White Halls Ltd makes an offer and negotiates the price of the Victorian style beds. But this is rejected by a counter offer made by Golden Antiques to David and specifies the time frame in which he must convey his acceptance. David tried to fax the acceptance letter but due to technical difficulties was unable to do so. He then posted the letter to convey the acceptance which he was well aware of not being able to make on time. This offer was not affective after Tuesday due to lapse of time. David must have used a better means to deliver the acceptance. He could have adopted the initial way of communication which was email.Revocation letter was then sent by Golden Antiques to David of White Halls Ltd stating that the beds are no longer available for sale. According to the postal rule, the revocation has to be received before the acceptance was received. But in this scenario, the postal rule should be i gnored since posting a letter was not an acceptable form of communication in a situation with a laconic time frame. Therefore David will not be able to take any legal action against Golden Antiques. On the contrary, it will be considered as Davids fault of not considering the terms of the contract.Legal advice to the partiesThe three parties involved in this case are Golden antiques, White Halls Ltd and Roger the accountant. From the given clear picture of the case above, it is quiet comprehensible that The Golden Antiques side of the case was more convincing as compared to that of David. If the manager of white halls ltd, be likely to sue golden Antiques, they will not be accused for any claims. Golden antiques had made its companys intentions very clear from the very beginning, i.e. when they had first advertised their invitation to treat. David first makes an offer showing his interest towards the purchase of the Victorian style beds, which was immediately rejected by making a counter-offer by golden Antiques. In the offer it was very well stated that if acceptance not conveyed by Tuesday which in turn makes the postal rule irrelevant. When the acceptance sent by fax was not communicated due to transmission errors, David should have used some other means of communication which would have been equally fast and effective. As the acceptance was not communicated on time the offer has lapsed.Golden antiques then sent a letter stating the revocation of the offer as they had now decided to sell the beds to Roger and are legally contracted with White Halls. eve though the Revocation of the offer was received or conveyed after the receipt of the acceptance letter from David, this will be regarded as Davids fault for not complying with the terms of the offer. Therefore, it is not advisable to take any legal actions against Golden Antiques because the judge verdict will be on the favour of Golden Antiques.TABLE OF CASESPartridge v crittenden 1968 1 WLR 1204,19682 A LL ER 421,(1968)112 SJ 582Stevenson,jacques Co v Mclean 1880) 5 QBD 346Hyde v Wrench (1840) 3 Beav 334Tin V Hoffman (1873)Felthouse v Bindley (1862) 11 CBNS 869Adams v Lindsell (1818)1 B Ald 681, 1818 106 ER 260Entores Ltd v Miles Far East Corporation 1955 2 QB 327,1955 3 WLR 48,1955 2 All ER 493, CAMcArdle,Re 1951 Ch 669,1951 1 All ER 905, (1951) 95 SJ 651, CAByrne Co v Van Tienhoven Co (1880) 5 CPD 344BIBLIOGRAPHY Ewan McIntyre, Business Law, 4th ed. Pearson Longman, 2008Catherine Elliot Frances Quinn, Contract Law, 7th edition, Pearson Longman, 209 Charles Wild Stuart Weinstein, Smith and Keenans union Law, 14th edition, Pearson Longman, 2009