Business Law Assignment - Communication of Acceptance and Binding Agreements

This Business Law Assignment discusses the rules of communication of acceptance and binding agreements in the context of two scenarios. The first scenario involves the communication of acceptance between Jasmine and Patrick, and the second scenario involves the binding agreement between Mobcap Oils Ltd and Alfonso Andretti. The assignment includes relevant case laws and authorities such as Gunthing v Lynn (1831) 2 B7 Ad 232, Entores Ltd v Miles Far East Corporation (1955) EWCA Civ 3, Brinkibon Ltd v Stahag Stahl GmbH (1983) 2 AC 34, Mondial Shipping and Chartering BV v Astarte Shipping Ltd (1995) CLC 1011, Albert v MIB (1971) 3WLR 291 House of Lords, and Balfour v Balfour (1919) 2 KB 571.

BUSINESS LAW ASSIGNMENT
Author Name(s)
Class (Course)
The Date

Author 1
Jasmine and Patrick
Issue
The main issue with this scenario regards communication of acceptance.
Rule
A valid agreement must have an offer which is made by the offeror. An offer is made by
the offeror, its terms should be clear, and then communicated to offeeree (McKendrick 2017, 39).
These case of (Gunthing v Lynn (1831) 2 B7 Ad 232) was one of the earliest to apply this rule.
Acceptance must be unconditional, and communicated by the offeree to the offeror (Chen-
Wishart 2018, 74).
The rules of communication of acceptance in electronic means were set in ( Entores Ltd v
Miles Far East Corporation (1955) EWCA Civ 3) that acceptance happens when acceptance is
deemed to have happened when the offeror receives the notification as opposed to when the
offeree sent it. The case of (Brinkibon Ltd v Stahag Stahl GmbH (1983) 2 AC 34) was also
concluded that acceptance took place in Vienna where the message was read as opposed to
London where it was sent from. Further in (Mondial Shipping and Chartering BV v Astarte
Shipping Ltd (1995) CLC 1011), the court ruled that the message arrived in the morning of
Monday when the office was opened as opposed to the evening of Friday when the sender sent
the message.
Application
By applying the rules established in Entores v Miles Far East Corporation to Jasmine and
Patrick, their contract was concluded when Jasmin received the notification. Further, the
application of (Brinkibon Ltd v Stahag Stahl GmbH (1983) 2 AC 34) will affirm that acceptance
takes place where the message is read as opposed to where it was sent from. Therefore,

Author 2
acceptance happened at Jasmine location. Application of (Mondial Shipping and Chartering BV
v Astarte Shipping Ltd (1995) CLC 1011) will the confirm that acceptance takes place the time
when the message is read as opposed to the time it was sent. Therefore, notification arrived when
Jasmine read it in the morning.
Conclusion
There was no legally enforceable contract between Jasmine and Patrick and the
communication was received when Jasmine had already contracted with Trina. Jasmine does not
have to sell to Patrick unless they start making a new contract.
Question 2: Mobcap Oils Ltd and Alfonso Andretti
Issue
Even though there was a consideration of $500,000, were the arrangements between
Alfonso Andretti and Mobcap Oils Ltd meant to amount to a binding agreement?
Rule of law
The work of (McKendrick 2017, 116) states it does not matter whether an arrangement
has a consideration in an enforceable contract, what matters is whether parties intended to make
the arrangements binding. The case of (Balfour v Balfour (1919) 2 KB 571) demonstrated this
rule when the court dismissed the wife’s claim that there was an enforceable contract for the
husband to send £30 month per month for maintenance. In law, agreements originating from
social, family or domestic arrangements are assumed to have been created without an intention to
make them binding unless when they involve a financial loss or gain, or when they are in writing
or deed (Jones 2017, 121). On the other hand, commercial arrangements are assumed to have
been created with the intention to make them binding, unless when parties agree to not make
them binding or the provide an honor clause (Jones 2017, 124). A classic case in nature was the

Author 3
case of (Albert v MIB (1971) 3WLR 291). The court denied a claim that the there was no
binding agreement between a worker collegue and the deceased Docker.
Application
Find whether the arrangement made between Alfonso Andretti and Mobcap Oils Ltd were
intended to constitute a binding agreement require application of the rules stated above. The first
step would be classifying the arrangement as either arising from a commercial context or social,
family or domestic. From the facts given, there had been previous commercial dealing between
the parties. In addition, there was previous agreement that Mobcap Oils were to be paying
Alfonso weekly payments in return for his participation. After finding a commercial context, the
next thing is to analyze whether the parties had an agreement or an honor clause rebutting a
binding agreement (Jones 2017, 124). Since there isn’t, a conclusion can be made that the
agreement was intended to be binding.
Conclusion
There was a binding agreement between Alfonso Andretti and Mobcap Oils Ltd, and he is
entitled to $500,000 first prize.

Author 4
References
Chen-Wishart, Mindy. 2018. Contract Law. 6th ed. New York: Oxford University Press.
McKendrick, Ewan. 2017. Contract Law. 12th ed. UK: Macmillan International Higher
Education.
Authorities
Brinkibon Ltd v Stahag Stahl GmbH (1983) 2 AC 34
Entores Ltd v Miles Far East Corporation (1955) EWCA Civ 3
Gunthing v Lynn (1831) 2 B7 Ad 232.
Mondial Shipping and Chartering BV v Astarte Shipping Ltd (1995) CLC 1011
Albert v MIB (1971) 3WLR 291 House of Lords
Balfour v Balfour (1919) 2 KB 571