Assignment on Commercial Law and Contract Law
Added on 2020-05-01
11 Pages2733 Words214 Views
Commercial LawContract Law(Student Details: )
CONTRACT LAWIntroductionThe best manner of stating what a contract is is to put is as a promise which is made between two or a higher number of parties for undertaking a task by one party and the other party paying the promised consideration (Mau, 2010). In contract formation, some specific aspects have to be present for resulting in a legally binding contact. These components include offer, acceptance, consideration, capacity, clarity and intent. The contract is deemed to have been contravened when the promise made under it, is not met (Mulcahy, 2008). Upon a dispute being raised from a breach of contract, or for any other dispute, the parties can opt for different methods of ADR, i.e., Alternative Dispute Redressal. This discussion is focused on these different aspects of the contract law. Part (i)IssueThe given case study highlights that the key issue of the case revolves around the contract formation between the different parties of this case. RuleInvitation to Treat and Offer When it comes to formation of contract, the first aspect is the offer being made byone party to the other. It is crucial to make a demarcation amid the offer and an invitation to treat. The invitation to treat is an indicator of the wish of the parties to negotiate upon a particular offer and the offer is an indicator of the intention of the parties to create legal relations (Roach, 2016). To further elucidate upon the difference amidst the two, the famous case laws prove to be of help. In Carlill v Carbolic Smoke Ball Company [1893]1 QB 256, the newspaper advertisement could be accepted through performance which led to the advertisement being deemed as an offer. However, in general, the case of Partridge v Crittenden [1968] 1 WLR 1204 is applied,
CONTRACT LAWwhere it was held that the newspaper advertisements are an invitation to treat (Latimer, 2012).Acceptance Upon an offer being made by the offering party, the party to which the offer had been made had to be accepted. It is of utmost significance that the offer which has beenmade is accepted in the manner in which it made. In case of any changes in the offer, the acceptance is not attained and instead, a counter offer is created. And as per Hyde v. Wrench (1840) 3 Beav 334, the original offer expires with the counter offer (Marson &Ferris, 2015). Felthouse v Bindley (1862) EWHC CP J35 provides that mere silence cannot be deemed as acceptance (Andrews, 2015).Another important part in acceptance is the date on which the offer is accepted and in general, it is deemed as such a date on which the acceptance reaches the offer making party. However, the postal rules of acceptance are a major exception to this rulewhereby the date of acceptance is such date on which the accepting party posts the acceptance letter (McKendrick, 2014). The reason for this is that the postal office is offering party’s agent and owing to the agency law, the acceptance of agent is the acceptance of the principal. And in case of postal rules, the date of actual receipt of acceptance letter by offering party does not matter. Holding the acceptance being present, due to these rules, in Adams v. Lindsell (1818) 106 ER 250, a contract was deemed to have been construed (Gibson & Fraser, 2013). Consideration The next requirement in contract formation relates to a valid consideration being present in a contract. The consideration is deemed as valid till the time it has an economic value (Treitel & Peel, 2015). Chappel & Co Ltd v Nestle Co Ltd [1960] AC 87 was one of such cases where the context of the case was analysed to hold if the consideration was a valid one. And due to the condition precedent, the court accepted the three wrappers as valid consideration (E-Law Resources, 2017).
CONTRACT LAWCapacity For contract formation, it is crucial that the parties have the contractual capacity to create legal relations. In this regard, the parties need to be of sound mind and need to have obtained the legal age (Miller & Miller, 2015). Intention The parties to the contract also need to show that they have the requisite intent of creating legal relationship, whereby legal liability and responsibility is attracted (Stone& Devenney, 2017). ClarityThe terms on which the contract is based need to be clear to the parties of the contract as these are the terms through which liabilities and rights are made available (Paterson, Robertson & Duke, 2012).Application The case study shows that an offer had been made on 01th Nov by Alan through his post on FB. This is deemed as an offer as the same could be acted upon by paying the price; and on the basis of Carlill v Carbolic Smoke Ball Company, this would make the post an offer. Bernard’s reply on the post on FB was a counter offer due to the change in the terms of original offer, which would mean that the original offer expired on the basis of Hyde v. Wrench. Rejecting this counter offer, the original terms were again offered to Bernard by Alan and the acceptance was attained from Bernard when he posted the money. Based on postal rules of acceptance, 04th Nov would be the acceptance date. The intent can be established as the money was asked to be looked out for by Bernard, which was done by Alan. The other elements of contract formation are assumed to be present as nothing to prove the contrary is present. Hence, a contract was formed here. The offer was never made to Charleen as she was neither Alan’s friend nor a student of Kaplan. Further, when Charleen made the offer to Alan, he was silent on it,
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