Commercial & Corporation Law Assignment (Doc)
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Added on 2020-03-23
Commercial & Corporation Law Assignment (Doc)
Added on 2020-03-23
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CASE STUDY2IssuesThe key issue in this case relates to whether or not a valid contract was formed between Ben and Fiona. The potential issues in this case are related to the offer and acceptance, invitationto treat, and consideration, along with the ability of the agent to bind the principal, revocation and breach of contract. Rules and ApplicationA contract is a promise made, whereby one part offer another party some terms, and the other party accepts the same for a consideration value. With the intention of forming any contract, there is a need to for the contract to have certain requirements, and these include offer, acceptance, consideration, intention, capacity, clarity and consent (Clarke & Clarke, 2016). The first step in contract formation is an offer being made, where one of the contracting parties has to offer certain terms to the other party. There is a need to understand that an offer differs from an invitation to treat (Ayres & Klass, 2012). This is because an invitation to treat results in an offer and it shows that the parties want to negotiate. An offer, however, shows that the parties want to start a contract and create legal relations (Andrews, 2015). In case of an invitation to treat, the selling party is not obligated to go actually make the sale, as was held in Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401. In general, the advertisement which is placed in newspaper or in any other mode, is deemed as an invitation to treat and a leading example of this is Partridge v Crittenden [1968] 2 All ER 421. Though, where such advertisements constitutes to a unilateral offer, it is taken to be an offer and an instance of this is
CASE STUDY3Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 and in such case, it is crucial to upholdthe terms of the advert (Latimer, 2012). In the given case study, the advertisement which had been placed by Harper and Associates in the local newspaper for the sale of their business would be deemed as an invitation to treat. This is because unlike Carlill v Carbolic Smoke Ball Company, this advertisement does not have a unilateral offer, which can be accepted by merely performing upon it. And so, it would be deemed as an invitation to treat, based on Partridge v Crittenden and applying verdict given under Pharmaceutical Society of Great Britain v Boots, Harper and Associates would not be liable to go through with the sale of business as per the advertised terms. When it comes to binding Ben with this advertisement, the agency law comes to play. Under the agency law, for the actions which had been embarked upon by the agent, the principal is legally responsible to the third party (Thampapillai et al, 2015). So, for the advertisement placed by Harper and Associates on Ben’s behalf, Ben would be liable. Had this advertisement been deemed as an offer, it would have been Ben’s offer. Though, this was not the case, so the advertisement placed by Harper and Associates would be deemed as an advertisement placed by Ben owing to the applicability of agency law. An agent has to work as per the authority which has been granted to him, and this authority is broadly classified into actual and apparent authority(Giliker, 2010). In this case, Harper and Associates had been given implied actual authority to arrange for business sale. And it was implied that Harper and Associates could do whatever was necessary for the sale of business, which included placing the advertisement. So, Harper and Associates acted within their authority and right placed the advertisement in the newspaper.
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