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Penny-Ronn Contract

   

Added on  2021-05-30

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Running Head: BUSINESS LAWBusiness LawName of the Student:Name of the University:Author Note
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1BUSINESS LAWIssue According to the facts provided through the case study the issue which has to be analyzed is thatwhether a contract has been formed between Penny and Ron and if yes when the formation didtook place. Facts Penny has the intention of participating in a competitive even. She visited Ron so that she can buy a horse form him on 1st February She selected a horse and offered a price of $8000 to purchase the horse The offer was followed by an altered term where Ron wanted to sell the horse at $10000. This offer was valid to be accepted for the next two days A letter had been posted by Penny on 3rd February that she wants to accept the offerwhich had been made by ron and purchase the horse for a price of $10000However she did not hear anything from Ron for a few days and thus she purchased anew horse where she got a better deal from Gumtree, the digital website at $6000She did not send any revocation to Ron Rule Offer An offer is a simple statement written or oral which a person makes to another person to showthat that they intend to get into a legal relation with them based on the conditions which arestated in such statement. In order to understand the legal significance of the element of offer theterm needs to be differentiated from an invitation to treat. When a person goes to purchasesomething from a shop any think which is displayed in the shop is not an offer. This is simplybecause if goods displayed on the racks or windows of a shop may be considered as an offer,then there would be several legal claims which would be initiated against the shop owner as hewould be legally bound to supply such products to even person who accepts it. This rule ofcommon law had been discussed and applied in the case of Pharmaceutical Society of Great
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2BUSINESS LAWBritain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 4011. Thus an offer will only occurwhen the person who visits the shop, selects the goods to be purchased and then makes an offerto the shop owner to purchase such goods. In addition an offer is valid for those to whom theoffer has been directed as per the case of R v Clarke HCA 47, (1927) 40 CLR 2272 and cannot beaccepted by any other person. However although a valid offer has significantly legal significancein contract law it does not have the capacity to establish a contract on its own. The offer will onlybe converted into a contract when the offer is been lawfully “accepted”. Acceptance An acceptance as discussed above has to follow an offer in order to constitute a binding contractbetween the parties. The element of acceptance in itself has certain sub-elements which need tobe satisfied towards the establishment of a valid acceptance. These elements include“unequivocal acceptance” and “communication of acceptance”. The principles in relation to theelements of unequivocal acceptance had been provided through the case of Hyde v Wrench[1840] EWHC Ch J903. This is a classic case which analyzed the correspondences between twoparties and ruled when actually a contract had been formed between them. In the case the courtalso discussed the provisions in relation to a counter offer. The ration deceinde provided by thiscase suggests that an acceptance to be valid at law has to be unequivocal or else it would becounted at law as a “counter offer”. A counter offer is not an acceptance at all at law. It isactually an offer which the person making the initial offer remakes. The legal effect of a counteroffer is that when it is made the offer which had been made initially comes to an end. When theoffer has ended the other party has no legal authority to accept it again. 1 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 4012 R v Clarke HCA 47, (1927) 40 CLR 2273Hyde v Wrench [1840] EWHC Ch J90
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