Australian Contract Law And Consumer Protection

Running head: AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION
LAW
AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
Name of the Student
Name of the University
Author Note

AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
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Issues:
 Whether the mode of communication of the acceptance was mentioned in the offer
letter sent by David to Micheal?
 Whether David should have cross-checked with Micheal about the delay in the
acceptance after making the offer?
 Whether Micheal should have communicated to David in a faster way than a letter
about the offer of purchase in instalment?
 Whether Micheal should have been tried to communicate in another way before
applying for the bank loan?
 Whether the mode of payment was mentioned in the offer letter?
 Whether David can be held liable under the exceptions of accepting an offer rule in
cases of postal service?
 Whether Micheal is liable to any compensation from David for her loss?
Rules:
This case thrives on looking for the impact of offer and acceptance in establishing a
contractual relationship between two parties. This case also discusses scenarios for revocation
of an offer and acceptance.
This case also highlights the scenarios of counter offers and invitation to treat.
Furthermore, this case will argue about the importance of knowledge of acceptance by the
offeror. Further, it discusses the exceptions in cases of acceptance of offer and rejection of an
offer.

AUSTRALIAN CONTRACT LAW AND CONSUMER PROTECTION LAW
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Analysis:
In this case, it can be seen that David first mentioned in the letter sent to Micheal that
he is interested in selling his equipment at a particular price. As per the Law of Contracts, this
intention to sell off equipment by David cannot be considered as an offer to sell the
equipment but it was an invitation to treat1. The scenarios in cases of offer and invitation to
offer are different in contract laws. Offer is a proposal made to the offerer by the offeree with
the intention to enter into a legal relationship2. In cases of an invitation to treat, a person
shows his or her interest to negotiate a contract. It can be considered as pre-communication
before making an offer. In case of Harver v. Facey3, the Privy Council held that, when the
owner of a particular thing shows his or her interest in selling that thing at a minimum price
or bargained price, he is not making an offer to sell the thing at that price but merely making
an offer to treat or negotiate. In Smith v Hughes 4, the court believed that intention is the most
vital factor in making an offer. In this case, David, in his first letter, expressed his interest to
sell the equipment specifies that Micheal was open to negotiation regarding the offer which
she did by placing the offer to buy in instalments5. However, David revoked the invitation on
16th April. In the case of an invitation to treat, it can be withdraw by the offeror at any time
before its acceptance, and in case it is accepted by the offeree, it is not completed without
proper consideration6. In this case, Micheal accepted the invitation to treat, but the amount
was not decided between them. Therefore, there exists no contractual relationship between
them.
1 Beale, Hugh, et al. Cases, materials and text on contract law. Bloomsbury Publishing, 2019.
2Giancaspro, Mark. "Is a ‘smart contract’really a smart idea? Insights from a legal perspective." Computer law
& security review 33.6 (2017): 825-835.
3 Harvey & Anor v Facey & Ors [1893] UKPC 1
4 Smith v Hughes (1871) LR 6 QB 597
5 Payne v Cave (1789) 3 TR 148
6 Helvacı, İ., Formation of the Contract. In Turkish Contract Law (pp. 3-13). (Springer, Cham, 2017)
.