Understanding Commercial Law: Elements of a Contract and Legal Positions

Running head: COMMERCIAL LAW 1
Commercial Law
[Author Name(s), First M. Last, Omit Titles and Degrees]
[Institutional Affiliation(s)]
Author Note

COMMERCIAL LAW 2
Abstract
A contractual agreement becomes enforceable if all the three essential elements of a
contract are present. These elements include an agreement made of an offer and acceptance, a
valid consideration and an intention to be bound by the terms of the contract. A legitimate offer
entails the offer who is the party making the offer, an intention to make the offer, and terms that
go with that offer upon its acceptance. On the other hand, a legitimate acceptance entails a
communication of intention of the offeree to accept the offer with all its terms. Where the offeree
responds with different terms, that is called a counter-offer that destroys the original offer.
Despite being the rules, the law of contract may lender a contract invalid even if all these
elements exist. For the purpose of this paper, the circumstances that would be covered involve a
contract made with a minor or one made through misrepresentation.
Keywords: Offer, Acceptance, Rescission, Counter-Offer

COMMERCIAL LAW 3
Case Introduction
The intention of this paper is to provide an explanation of the legal position of the issue
of Bernard and Alan, Charleen and Alan and Damien and Alan. All the issues started with Alan’s
post on Facebook on 1st November his intention to sell his “Introduction to Business Law in
Singapore” textbook together with his notes for $200. Alan asserted that both the book and the
notes made him score a High Distinction grade, and whoever was keen to reply before 5th
November. Bernard replied on 2nd November asking whether the book could cost $150. Alan
replied on 3rd November to him stating that the price remained at $200, and he had even made the
offer to someone else. Even though, Bernard places $200 to an envelope that reaches Alan on 4th
November. Alan took the cash, and on 7th November, he passed just the Book to Alan asserting
that the notes were written inside thee book.
Charleen was the Alan’s younger sister who read the post, and informed his brother that
he would be purchasing the book and the materials. Being young and on her GCE “O” levels,
Alan took her less seriously and he just nodded his head on 2nd November when Charleen asked
him whether he could pass the $200 on 6th November. On 6th November, Charleen then placed
the $200 on Alan’s table.
The issue of Damien arose from the same post, but for this time Damien read the post
from Bernard, and took with him Alan’s phone number. Damien then sent Alan his intention to
purchase the book, and made the payments of $200 for both the book and materials on 4th
November. Alan took the money, purchased a new book, and together with the materials, he
passed them to Damien on 7th November. However, Damien and Bernard later realized that the
book was available for free at school.

COMMERCIAL LAW 4
Bernard Legal Position
Issue
Whether an offer remains available after a counter-offer.
Rule of Law
The rules that apply to counter-offers were set in (Hyde v. Wrench, 1840) that an offer
should be replied with an acceptance for there to be a contract. However, where the offeree
replies with other conditions instead of accepting the conditions that were given by the offeror,
that becomes a counter-offer (McKendrick, 2012, p. 84). A counter-offer resets the entire
negotiation and changes the initial offeror to the offeree and the initial offeree to the offeror.
Notably, once there has been a counter-offer, the offeree who gave the counter-offer cannot
move back to accept the offer which he already displaced.
Application of the Law
On application, the legal principles relevant issues of counter-offer would be applied to
the situation to the issue of Alan and Bernard. While looking at the rules set in (Hyde v. Wrench,
1840), the Court’s opinion was that the parties never made a binding contract since the counter
offer killed the original offer. Similarly, Alan offer was terminated when Bernard replied with a
counter-offer.
Like the facts of the case of (Hyde v. Wrench, 1840), Alan already informed Bernard that
the price remained at $200. This infers that Alan rejected the counter-offer that Bernard was
making for $150. The case of (Pickfords Ltd v. Celestica Ltd, 2003) also offers sufficient
confirmation to Bernard situation. In the case, the court affirmed that counteroffers introduce
new terms. On matters of Bernard’s counter-offer, we can conclude that the parties did not make
a conclusive contractual relationship.