Business Law

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

1BUSINESS LAW
Question 1
Issue
The issue is to give advice to Robert pertaining to Cameron’s rejection of his offer of
buying 50 metric tons of wheat for $ 250 per metric ton, after accepting the offer initially.
Rule
To make a contract valid and binding it is important to who maintain a proper system
of offer and acceptance which may either be in writing or oral or implied. An offer must be
communicated by the offeror to the Offeree who then has the responsibility to either accepted
or rejected as per his convenience. Communication of offer is considered to be complete as
soon as the offeror shares the information and the offeree gets to know it personally. While
the communication of acceptance depends and vary is in case of the offeror and the offeree
(Stone and Devenney 2017).
According to the postal rule of communication, the communication of offer is
complete when the offeree comes to know the fact that the offeror has offered him an
agreement. While as per the postal rule communication of acceptance differs; in case of the
offeror, the communication of acceptance is completed even though the acceptance letter of
the offeree still with the postal authority and is in transmission. However in case of
communication of acceptance for offered, it becomes complete when it comes to the
knowledge of the offeror that the offeree has accepted his offer (Beale et al 2018).
The significance of communication of offer and acceptance is to shield the parties to
the contract who made face challenges pertaining to their contractual relationship and issues
that may arise from it as discussed in Henthorn v Fraser (1892) 2 CH 27. Modes of
communication can be divided as instantaneous and non instantaneous where the former is a
faster method to communicate while the latter takes time. Face to face communication,

2BUSINESS LAW
interaction by way of emails and telephonic conversation helps the offeror and the offeree to
communicate much effectively and efficiently with each other and the communication of
offer and acceptance becomes easy as well, for it leaves no doubt regarding the requirements
of the parties as well as their expectations from each other. On the other hand non
instantaneous mode of communication like exchange of letters can be extremely time-
consuming as its takes longer duration to reach the recipient. In case of communication made
through post it is considered that the offeree accepts the offeror’s offer exactly when he hi
force his letter of acceptance addressing the offeror irrespective of the fact that the letter has
not reached the offeror yet (Stone and Devenney 2017).
In the case of Bressan v Squires (1974) 2 NSWLR 46, postal rule is an exceptional rule
where the parties choose to you communicate by way of letters which usually takes longer
period of time to reach the recipient. The postal rule states that the communication of offer is
complete as soon as the offeree receives the offer letter from the offeror while the
communication of acceptance is complete as soon as the offeree posts his letter of acceptance
stating that he agrees to offeror's offer. Therefore be it instantaneous or non instantaneous
mode of communication it is important to follow the rules so that the disputes pertaining to
the validity of the contract arising out of such cases could be dealt easily (Beale et al 2018).
Application
In this case Robert offered to sell 50 metric tons of wheat to Cameron at a price of
$250 per metric ton. The offer was made through post on September 5 that Cameron on
received on September 7. On receiving the offer letter Cameron replied on the same day by
writing a letter of acceptance and posted it but such letter contained a query pertaining to the
inclusion of the price of delivery along with the price of the wheat. On receiving Cameron’s
letter of acceptance on September 8, Robert e-mailed Cameron stating that the price of the
wheat included the delivery charges. On receiving the email Cameron readily accepted