Contract Formation and Alternate Dispute Resolution Techniques

This article discusses the formation of contracts and the various Alternate Dispute Resolution Techniques available to resolve disputes. It also analyzes a case scenario to understand the application of law in contract formation.

1
Contents
Solution............................................................................................................................................2
The Issues raised..........................................................................................................................2
Applicable Law............................................................................................................................2
Application of Law......................................................................................................................3
Conclusion...................................................................................................................................5
Bibliography....................................................................................................................................7

2
Solution
The Issues raised
i. Whether any contractual relationship is established amid the parties. Who are the parties
who have formulated the contract?
ii. Whether there is a contract that is made amid Bernard and Alan?
iii. Whether there is a contract that is made amid Charleen and Alan?
iv. Whether there is a contract that is made amid Damien and Alan?
v. The various alternative dispute resolution options available and the pros/ cons with these
options
Applicable Law
The offeror and the offeree are the guiding parties who together by making an offer and
acceptance might result in the contract formation, if there is legal intention and consideration to
support the promises. (Tan, 1999)
An offer is made by an offeror to an offeree specifying the terms that he inteds to be comply with
by the offeree absolutly. The offeror can either verbally or textually or by actions can
communicate the offer to make it valid and is held in (RBC Properties Pte Ltd v Defu Furniture
Pte Ltd , 2015).
The confirmation of the offer by an offeree is an acceptance and is held in (Empirnall Holdings
Pty Ltd v Machon Paull Partners Pty Ltd, 1988). An acceptance is valid provided it is
communicated and is in the notion of the offeror and is held in (Woo Kah Wai v Chew Ai Hua
Sandra, 2014). If the acceptance is intended by the offeree but the same is not communicated to
the offeror by any means (written, spoken or conduct), then, such intention has no relevance in
law and is not an acceptance and is held in (RI International Pte Ltd v Lonstroff AG, 2014). An
acceptable by post is an instant acceptance and is complete even when the offeror is not aware
of the same and is held in the leading case of (Adams v Lindsell , 1818). (Latimer, 2012)
Instead of making offers, when offers are received by display of goods, or auctions or with the
help of advertisement or tenders, etc, then, it is an invitaion to treat and is held in
(Pharmaceutical Society v Boots Chemists , (1953)). There is no offer made and the inviter
expects the receipt of the offer. If the inviter upon receiving offer confirms the offer, then, it is
acceptance resulting in contract and is held in (Midlink Development Pte Ltd v The. Stansfield
Group Pte Ltd, 2004). (SMU, 2014)
The offer and acceptance shoukd be combined with some benefit called conisderation which
makes the contract neforcebale and is held in (Chwee Kin Keong v Digilandmall.com Pte Ltd ,
2005)
The promises which are made by the offeror and the offeree must be made with legal intention.
In hosuehold contract the intention is missing and is held in (Balfour v Balfour , 1919) but in

3
commercial the same is present and is held in (Esso Petroleum v Commissioners of Customs &
Excise, 1976) The presumption is rebuttable. (SMU, 2014)
Application of Law
The facts of the factual scenario submit that Alan was studying in Kaplan Higher Education and
was the student of commercial law. He was having a test book of the said course along with the
notes. In order to sell the book, a post is made on his face boo page addressing to his friends who
are part of the University to avail the book and the notes for $200. The post was made on 1st
November and the interested party must confirm their intentions by 5th November. Now, the post
on facebook page is a kind of advertisement and thus as per (Partridge v Crittenden , 1968) an
invitation is made to specific people, friends of facebook. If any person is interested in the
invitation can make an offer to Alan
Issue i
Damien on the evening of 4th November meet Alan at the university and handed over $200 for
the book. Thus as per (Carlill v Carbolic Smoke Ball Company, 1892) an offer is made. This
offer is accepted by Alan when he received the money from Damien and the acceptance is valid.
So, there is offer and acceptance with legal intention and consideration of $200. Hence there is
valid contract amid the parties.
Issue ii
In order to understand whether there is a contract between Bernard and Alan, it is important to
understand the communications that took place amid them.
Bernard is the friend of Alan and was also part of his facebook friend list. Bernard also enrolled
in the University. Thus, the invitation that is made by Alan fits in with Bernard and thus makes
his eligible to make an offer against the invitation that is made by Alan. On 2nd November 2015,
by relying on the invitation that is made by Alan, he communicated with Alan and expressed his
interest of buying the book. But, he quoted the price of buying the book at $150 (Alan has given
the price quote on his facebook page @ $200 for the book). But, what Bernard has done is the
request to Alan. There is only an expression of showing interest and there was no formal offer
that was made by Bernard to Alan, the acceptance of which will result in contract amid the two.
Thus, as per (Stevenson, Jaques, & Co v McLean, 1880), Bernard has not communicated any
kind of offer to Alan.
Alan upon getting aware of the request of Bernard, on 3rd November communicated to him that
the only price on which he is interested in selling the book is $200. So, the reply of Alan is also
no wheree any kind of offer, but is only the statement that is made to the quest of Bernard. Thus,
till now, it is only the invitaion of Alan that exist amid the parties. Further, on 3rd November,
Beranard posted his acceptance the acceptance is valid as soon as the letter is posted. He also
enclosed a money $200. But, the acceptance by Bernard is of no value as he gave acceptahnce to
an invitaion of Alan. There is no offer againt which an accepatnce is given.
So, the acceptance of Bernard has no value and thus there is no contract amid the two.

4
Issue iii
In order to understand whether there is a contract between Charleen and Alan, it is important to
understand the communications that took place amid them.
Charleen is sister of Alan. She is facebook fried of Alan and is enrolled in the University. Thus,
the invitation by Alan is applicable to Charleen. On 2nd November Charleen stated to Alan that
she is offering to buy the book for $200 but there is no acceptance that was given by Alan,
rather, he just smiled. Charleen spoke further and showed her intention of giving money by 6th.
However, Alan was no where interested in the talks of Charleen and simply nodded but, this
nodding of head is no acceptance and the acceptance by the offeree should be communicated and
as per (Balfour v Balfour , 1919)there should be intention of accepting the offer when the same is
made. But, this intention of acceptance is missing from the side of Alan. Both Charleen and Alan
are sister- brother and there is a conjecture that there is no legal intonation that is present amid
them to hold the offer and acceptance legally binding in law. So, there is no contract that takes
place between the two because of lack of acceptance and legal intention on the part of Alan.
Issue iv
In order to understand whether there is a contract between Damien and Alan, it is important to
understand the communications that took place amid them.
Alan has given invitation to his friends on facebook who are enrolled in the University. Now,
Bernard who is friend of Alan on facebook is also the friend of Damien. Bernard told Damien of
the invitation of Alan. But, Damien is not able to make offer to Alan as the invitation is not
meant for him.
But, Damien text Alan of his intention to buy the book with reference that he can send the
money. On November 4th evening Damien met Alan and handed him $200 for the book. This is
an offer which is made but Damien which has no relation to the invitation made by Alan. Alan
by accepting the money gave has consent by conduct. Thus, an offer by Damien is accepted by
Alan resulting in contract.
Issue v
The various alternative dispute resolution options available and the pros/ cons with these options
In everyday life, there are various contracts that are established by the parties. When the parties
to the contract comply with their obligations in the contract, then, the contract cease to exist on
the basis of performance of the contract. However, when the parties are not willing to fulfill their
obligations in the contract, then, the contract cease to exist on the basis of breach of contract. one
of the remedies that is normally availed by the non defaulting party is to sue the defaulting party
in the court of law. a litigation proceeding is filed and both the disputes parties decide the dispute
in the court and the judgment is binding on the parties.
But, it has been found that the process of litigation though has various advantages, but, it also
suffers from range of disadvantages. It is found that the process of litigation is a very lengthy
procedure method making it very time consuming and complicated in nature. The pre trial stages
in itself take much long time and thus the whole process of deciding the dispute amid the parties

5
becomes excessive time consuming. The cost of litigation is very high and it requires payment of
fees to the attorneys, court fees, etc. the parties to the dispute are deciding their problems in court
which is an open yard and is accessible by various people. There are several evidences and facts
which are exchanged amid the parties which are of secretive nature. Thus, deciding the dispute
through litigation results in breaching the confidentiality of the parties. (d'Ambrumenil, 1997)
Considering the various problems that are attributed to the process of litigation, there is another
mechanism that is availed by the parties. A non formal court hearing process which requires the
presence of a third party of independent nature which has given the power to resolve the civil
disputes amid the parties and is popularly known as Alternate Dispute Resolution Technique.
The Alternate Dispute Resolution Technique compruses of several methiods which can be
selcted by the parties to the dispute to reach at a just concudion. The techniques includes,
conciliation, mediation and arbitration.
In the process of concilitaion, a concilitor is applointed who has been assigned the power to
resolve the dispute that exist amid the parties. the only problem that exist with the process of
concilitaion is that the decision which is lay down by the conciliator is a non binding decision
making the process as non effective in nature. the role of the concilitor in reaching at the
conclusion is more interveneing in nature comprared to the role of a mediator. The conclito
provides soilution to the problem The parties can reject the decision of the conciliator and take
their own recourse.
A step ahead there is another Alternate Dispute Resolution Technique known as mediation. In
the presence of a meditaor, which si an indepenent third party appinted by the disputes parties,
when the parties reach at the baragain, then, it is an act of mediation. The main aim of mediator
is not t impose any kind of decision on the partie but to stimulate the discussion amid the parties
so that the parties themselces reach at a just conclusion which is acceptable by both the parties.
the process of mediation is not much time consuming and less exensive. There are less cahnces
of seekinga ppeal as the parties have themsekves rtecahed at just concludion. But, the major
drawbac is that the decision that is reached is not bining in natuiree. Thus, if any party at later
stage decides to make an appeal then he can do so resuting in extending the process of dispute
resoilution. The main aim of the meditaion process is to try to maintain the relationhsip amid the
parties.
Yet another Alternate Dispute Resolution Technique is the process of arbitration which is an
adverial process and the decision that is laid down by the arbitrator is binidng in nature. the main
difference that exist amid the process of arbitration and litigation is that the settlement of the
dispute takes place privatly unlike litigation which takes place at a pubkic forum. The arbitrator
is appiinted by the parties who by using the adversial process resolves the dispute which is
bindin on the parties. thus, no appelamcan be made making it as a time consuming dispute
resilution mechanism.
After considering all the Alternate Dispute Resolution Technique, it is suggested that the best
technique is the process of arbitration not only becauise the decsion is bidning but beacause the
dispute is resoled in closed doors and thus preserving the confidentialty of the parties.

6
Conclusion
There are several negotiations that are taken by Alan. But it is the exchange of offer and
acceptance with Damien that has resulted in the formation of contract. Also, arbitration as a
Alternate Dispute Resolution Technique is the better technique when comapred woith
conclitaion and medaiation as the decision is binding and retains confidentiality of the parties.

7
Bibliography
Adams v Lindsell (1818).
Balfour v Balfour (1919).
Carlill v Carbolic Smoke Ball Company (1892).
Chwee Kin Keong v Digilandmall.com Pte Ltd (2005).
d'Ambrumenil, P. (1997). Mediation & Arbitration for Lawyers. Cavendish Publishing.
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988).
Esso Petroleum v Commissioners of Customs & Excise (1976).
Latimer, P. (2012). Australian Business Law 2012. CCH Australia Limited.
Midlink Development Pte Ltd v The. Stansfield Group Pte Ltd (2004).
Partridge v Crittenden (1968).
Pharmaceutical Society v Boots Chemists ((1953)).
RBC Properties Pte Ltd v Defu Furniture Pte Ltd (2015).
RI International Pte Ltd v Lonstroff AG (2014).
SMU. (2014). The Contract Law. Retrieved October 5, 2018, from
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=3631&context=sol_research
Stevenson, Jaques, & Co v McLean (1880).
Tan, K. (1999). The Singapore Legal System. Australia: NUS Pres.
Woo Kah Wai v Chew Ai Hua Sandra (2014).