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Case Study on Commercial Law Assignment

   

Added on  2020-05-01

11 Pages2850 Words213 Views
Running Head: CASE STUDY

2CASE STUDYIntroductionWhen two or more parties come together and promise each other, where one side holds the promise of doing something and the other side promises to pay the consideration amount to the other party for doing this thing, a contract is formed (Clarke & Clarke, 2016). However, apartfrom a mere promise, there are certain ‘components’ which have to be present for giving the legal validity to this contract, and these are the offer being made, which has to be given an acceptance, where the promise needs to have a value of consideration, there has to be clarity in terms of contract, intention of the parties and lastly, their contractual capacity to result in contract formation. Where the promise on which the contract had been made is not upheld, the contract is deemed to be breached. When a dispute is caused due to such breach, the parties can refer the matter to be solved through an alternative dispute redressal method (Treitel & Peel, 2015). Here, these very facets would be discussed, particularly in context of the case study given.Part i.Issue:The key issue of this case revolves around the presence of a contract between the parties of the case study.Rule:In order to create a contract, the first requirement is for the contract to have an offer. An offer covers certain terms which the party offers to the other party. An offer is different from an invitation to treat, which comes before an offer and covers the negotiations for the possible contract. An offer shows the intent of the party to create legal relations, which is not present in

3CASE STUDYan invitation to treat. This differentiation is of particular importance in context of the advertisements (Bonell, 2009). These are deemed as an invitation to treat in general and in Partridge v Crittenden [1968] 1 WLR 1204, this rule was upheld by the court of law, as a result of which the defendant was not held liable. However, in case the wordings of the advertisement are such that can be accepted through performance, it is deemed as unilateral example and a leading example of this is Carlill v Carbolic Smoke Ball Company [1893]1 QB 256, as a result of which the company had to pay the promised sum to the plaintiff (Latimer, 2012).The next step in formation of contact relates to an acceptance being garnered on the offer made. The offer has to be accepted in the exact wordings in which it had been drawn. Where the communication of acceptance covers any changes in the offered terms, instead of being deemed as an acceptance, it would be deemed as a counter offer (Carter, 2007). Hyde v. Wrench (1840) 3 Beav 334 dictates that upon such occurrence, the original offer no longer stands (Marson & Ferris, 2015). The acceptance has to be communicated properly, or else it would be valid; particularly a silence is not deemed proper acceptance as was held in Felthouse v Bindley (1862) EWHC CP J35 (Andrews, 2015). The date of acceptance is a major part of acceptance and is deemed as such date on whichthe communication of acceptance sent by the accepting party, reaches the offering party. But, when it comes to the postal rules of acceptance, they act as a key exception (Elliot, 2011). These rules provide that the date of acceptance is the date on which the party posts the letter containing the acceptance. This is because the postal office is given the status of being the agent of the offering party, when they elect to get the acceptance through mail. The date on which this letter actually reaches the offering party, is not of importance (Ayres & Klass, 2012). Adams v.

4CASE STUDYLindsell (1818) 106 ER 250 resulted in the contract being deemed as valid, owing to the formation of contract (E-Law Resources, 2017).The third requirement in formation of contract relates to consideration. This requirement presents that the contract needs to have a valid consideration, in terms of having economic value and can be mutually decided between the parties (Paterson, Robertson & Duke, 2012). Even though wrappers do not have economic value in general and are treated as garbage, in Chappel & Co Ltd v Nestle Co Ltd [1960] AC 87 these were deemed as valid consideration owing to condition precedent (Australian Contract Law, 2010a). The contracting parties also need to have the capacity to created legal relations and need to have attained majority and be of sound mind. There is a need for the terms of contract to be clear and the parties to have the intent of entering in legal relation (Frey & Frey, 2005). Application:This case depicts that through a post on facebook, Alan had made an offer to the students of Kaplan and to his friends and the date of offer was November 01. The reason for treating this as an offer was that by paying the asked sum, a person could accept the offer, as per Carlill v Carbolic Smoke Ball Company.The reply made by Bernard on this facebook post has to be taken as a counter offer. The reason for this lies in the changes being demanded in the original offer posted on the facebook. And Hyde v. Wrench would state that the earlier offer expired when this comment was posted, for Bernard. Another counter offer was made by Alan to Bernard reiterating the original offer. This offer was accepted by Bernard through post on November 04, through post, making it the date of acceptance, instead of November 05 when Alan got the letter. Alan had the intent of

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