Business Law Group Assignment
15 Pages2499 Words339 Views
Added on 2020-05-11
Business Law Group Assignment
Added on 2020-05-11
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CONTRACT LAWPage 2 of 15Question 1Issue (a)Whether the four elements required for creating a contract were presented between Lila and the store; and Dina and Lila, or not?RuleA contract is to be defined as an undertaken promise where one side of the party promise to pay the contractual consideration and the other side promises to undertake the contractual promise1. For creating a contract, there is a need for the presence of certain elements, which includes offer, acceptance, consideration and intention of the parties. For creating a contract, the first step is for an offer to be made. It is important to differentiate between an offer and acceptance, as the former shows intent of creating a legal relationship and the latter denotes the intent of negotiating upon the offer. The advertisements in general are deemed as an invitation2. It is also important to differentiate between an offer and a request for information. Harvey v Facey3 was a case where the Privy Council stated that answering about the lowest price of pen was a request of information and not an offer as there was a lack of intention. Also, the offer can be revoked before the same is accepted by the other party4.This offer has to be then accepted by the party to which the offer had been made. The date of acceptance is such date on which the acceptance is attained by the party which made the 1 Neil Andrews, Contract Law (Cambridge University Press, 2nd ed, 2015)2 Jill Poole, Casebook on Contract Law (Oxford University Press, 2016)3 [1893] AC 5524 Michael Furmston and G.J. Tolhurst, Contract Formation: Law and Practice (Oxford University Press, 2010)
CONTRACT LAWPage 3 of 15offer. However, the postal rules of acceptance prove to be an exception and provide that the date of acceptance is such date on which the acceptance letter is posted and the date of receipt remains irrelevant5. This is because the postal office is considered as an agent of offering party, as per Byrne v Van Tienhoven & Co6, which means the receipt of postal office is the receipt of the offering party. The postal rules of acceptance are applicable on the electronic mails as well; so the date of sending the email is the date of particular offer/ acceptance based on section 14 of the Electronic Transaction Act, 19997. Also, the offer has to be accepted as had been made. If anything is changed in it, it is deemed as a counter offer as per Hyde v. Wrench8 which leads to the expiry of original offer. The next requirement is for the contract to have a valid consideration, which has economic value. Lastly, the parties need to have the legal intention of getting into the contract. Once all the four elements are present together, a valid contract is formed9.ApplicationLila and Store In this case, an offer was made by Lila to the store for the phone at $1000 on which a counter offer was made by the store to Lila to purchase the phone at $1500. This was because theconsideration had been changed and as per Hyde v. Wrench, the original offer expired with this counter offer. However, even this counter offer was not accepted as the products changed later on to add an iPad and scanner. So, a new contract was formed at this stage, where the three 5 Paul S Davies, JC Smith's the Law of Contract (Oxford University Press, 2016)6 (1880) LR 5 CPD 3447 Electronic Transaction Act, 1999 (Cth)8 (1840) 3 Beav 3349 Andy Gibson and Douglas Fraser, Business Law (Pearson Higher Education AU, 2013)
CONTRACT LAWPage 4 of 15products were to be bought by Lila at $2500. The discount voucher was not something which had been purchased and so, it did not form a part of the contract. This discount promotion was instead an offer which could be accepted by Lila in the next six months period. And since the offer was revoked through email three months ago, the date of revocation would be three monthsago. Hence, due to the lack a standing offer and an absence of a contract in this regard, a contractwas not formed between Lila and the store for the discount promotion. Dina and LilaThere was no offer made in this case. The advertisement which was given in the newspaper was an invitation to treat. On this, an offer could have been made, had it not contained a question. An offer has to explicitly state the terms which are being offered. Here, there was uncertainty about the furniture being how old. Hence, this was not an offer. And neither was the reply of Dina an offer as this was only information given before the contract was formed. This entire communication was a pre-contractual negotiation. And without an offer, a contract cannot proceed.Conclusion Hence, no contract was formed between Lila and store, and Dina and Lila, owing to lack of valid acceptance in first case and lack of offer in second case.Issue (b)Whether the advertisement was an offer to sell the item or not?
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