Contract Formation and Analysis of Legal Positions

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Contents
Solution............................................................................................................................................2
Issues............................................................................................................................................2
Applicable Law............................................................................................................................2
Application of Law......................................................................................................................3
Conclusion...................................................................................................................................6
Bibliography....................................................................................................................................7

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Solution
Issues
i. Is there any contact formation amid the parties, if yes, then, when it was formed and who
all are the contracting parties?
ii. Analysis of Bernard legal position and remedies?
iii. Analysis of Charleen legal position and remedies?
iv. Analysis of Damien legal position and remedies?
v. The various Alternative dispute resolution options available and pros & cons with these
options.
Applicable Law
The law of contract is a civil law which aims at establishing contractual association between the
parties. When any contractual association is formed then the parties to the contract are
required to comply with the terms of the contract. The essential elements of contract are
offer, acceptance, intention, capacity and consideration. (Jennifer, 2001)
The offer is the contract element which is initiated by an offeror. When any statement/proposal is
made by the offeror through which he tries to communicate his intention to carry any
act/omission by the offeree, then, such an act is an offer in contract law. (Gibson v
Manchester City Council, 1978) explains the concept of an offer. An offer can be made to
general public or to someone specific as per (Carlill v Carbolic Smoke Ball Company,
1892).
An acceptable is the second contract essential which follows an offer. The confirmation to the
offer by the offeree is called an acceptance in law and is held in (Empirnall Holdings Pty
Ltd v Machon Paull Partners Pty Ltd, 1988). Further, as per (Felthouse v Bindley, 1862),
an acceptance is necessary to come in the knowledge of the offeror to make it binding in
law. If there is no communication of acceptance then such an acceptance is invalid in
law. (Latimer, 2012)
But, when there is postal acceptance, then, the communication of the acceptance is complete
when the letter is posted by the offeree. As per (Adams v Lindsell, 1818) there is no need
for thee letter to reach the offeror to make the acceptance binding in law.
But, when no acceptance is made but changes are brought in the terms of the offer, then, such an
acceptance is counter offer which has the capacity to terminate the original offer and is
held in (Hyde v Wrench, 1840). The counter offer is the new offer which when confirmed
results in contract formation. Also, mere quotation or queries are not counter offer in law
and is held in (Stevenson, Jaques, & Co v McLean, 1880). (Gordon, 2016)
But, many a times, there are no offers which are given rather, a person wish to receive offers.
This act is called invitation to treat and an invitation can be attained with the help of
several means such as tenders, auctions, advertisements etc. in (Pharmaceutical Society v
Boots Chemists , (1953)) an invitation to treat is analyzed. When the people based on the
invitations make offer to the inviter then when such offers are approved by the inviter
then there is a valid contract establishment amid the parties and is rightly evaluated in
(Fisher v Bell , 1961).

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When an offer and acceptance is exchanged then there is a binding agreement amid the parties.
This agreement must be made by the parties with legal intention. Legal intention is
presumed to be absent when the parties are in social arrangement and the same is
generally to be present when the parties are in commercial relationship and is held in
(Balfour v Balfour , 1919).
The promises must be supported with some benefit called consideration to make the contract
enforceable in law (Currie v Misa, 1875).
Application of Law
Alan was a student and was enrolled in Kaplan Higher Education. Alan is intending to sell his
textbook in Business Law. He in order to sell the book posted posts on his facebook
accounts which are referred to all his friends on the facebook and who are enrolled or are
willing to enroll in Kaplan higher Education. The post was done by Alan on 1st
November 2015 and the advertisement was kept open till 5th November 2015. The price
for the purchase of the textbook and notes are quoted at $200.
It is thus submitted that an advertisement was posted by Alan on his facebook page. An
advertisement is nothing but an invitation to treat. Thus, Alan is acting as an
inviter/offeree. Further, the invitation are made to specific persons, that is, all those who
are in the facebook friend list of Alan and who are already or are willing to enroll
themselves in Kaplan Higher Education. So, as per (Carlill v Carbolic Smoke Ball
Company, 1892) since the invitation is made to specific group of persons thus the offers
must be received from such specific group only.
Based on the above facts, the issues are now resolved.
i. There is a contract formation between Alan and Damien. The contract was established
between the parties on 4th November when an offer was directly made by Damien to Alan
and this offer was immediately accepted by Alan.
ii. Position of Bernard
The invitation that was made by Alan was for his facebook friends who are enrolled or are
willing to enroll for Kaplan Higher Education. Bernard is in the facebook friend list of
Alan and is part of the Education programme. Thus, as per (Carlill v Carbolic Smoke Ball
Company, 1892) he is capable to make offers to the invitation of Alan.
Based on the advertisement, on 2nd November 2015, Bernard made an offer @ $150.
Now, instead of accepting the offer of Bernard @$150, Alan submitted that he will only sell the
textbook and notes for $200. Thus, there is no acceptance made by Alan on 2nd November
2015. The quotation of $200 that is made by Alan is only a quote and not a counter offer
as per (Stevenson, Jaques, & Co v McLean, 1880).
Bernard on 3rd November posted a letter with $200 to Alan. The letter reached to Alan on 5th
November. However, this acceptance is made by Bernard for the quotation made by
Alan. The quotation was not an offer by Alan and thus the acceptance by Bernard is of no
relevance. Thus, there is no contractual relationship amid the parties.
Thus, since there is no contract amid Barnard and Alan, thus, Alan can take the textbook from
Bernard back and return the money.