Contract Law: Validity of Contracts and Authority of Agents

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Contents
Solution 1....................................................................................................................................................2
Issues.......................................................................................................................................................2
Relevant Law...........................................................................................................................................2
Application..............................................................................................................................................3
Conclusion...............................................................................................................................................3
Reference List.............................................................................................................................................3
Solution 2....................................................................................................................................................5
Issues.......................................................................................................................................................5
Law..........................................................................................................................................................5
Application..............................................................................................................................................6
Conclusion...............................................................................................................................................6
Reference List.............................................................................................................................................8
Bibliography................................................................................................................................................9

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Solution 1
Issues
i. Whether Ming is having a valid contract with the 40 customers who are there when
the Notice is displayed by Ming?
ii. Whether the 10 customers who knew about the promotion but did not produce the
advertisement paper can get hair cut @ $10 by enforcing agreement?
iii. Can Ming deny the hair cut @ $10 by stating that the same is not adequate
consideration as for a haircut generally the charges are @ $60?
iv. Whether after displaying the notice at the window about revocation of offer is Ming
safeguarded?
Relevant Law
A Contract is an accord that has the force of rule an agreement is concluded between two parties
(offeror and offeree) when the proposal is sent by an offeror and the same is acknowledged by an
offeree. But an agreement is said to be a contract when there are other elements such as,
consideration, intention and capacity. (Latimer, 2016)
An offer is an intention of an offeror to enter into an agreement with an offeree. It must be simple
and clear and must be communicated to an offeree, it is then only said to be completed. An offer
can be to a precise being or generally. In the leading case of (Carlill v Carbolic Smoke Ball Co,
1893), a proposal to the general public can be made and is valid in law. An offer can be made
orally or it can also be in written mode and is analyzed in (Smith v Hughes , 1857).
Whenever an invitation is given to invite offer, then, the same is not termed as an offer, rather, it
is termed as a request. In this concept, the inviter invites offers from people and upon receipt of
an offer if he accepts the same then there is a concluded contract. In (Carlill v Carbolic Smoke
Ball Co, 1893)the concept of the public offer being accepted by acting upon it is explained.
Further, auction sale, advertisement etc are also considered as invitation to offers and are
analyzed in (Pharmaceutical Society Of Great Britain v Boots Cash Chemists (Southern) Ltd ,
1953). (Gibson & Fraser, 2014)
An Acceptance is said to occur when the offer is assented to by an offeree. An acceptance is
complete when the same is communicated to an offeree(RA Brierley Investments Ltd v
Landmark Corp Ltd , 1966).
An acceptance must be equal to an offer. If it is not same with the terms of an offer, then, a
counter offer is made and is not termed as an acceptance (Hyde v Wrench, 1840). The counter
offer cancels the initial offer so made. An acceptance must be in proper mode as stated in the
offer. If the acceptance is not in same manner then the said acceptance is not considered as an
acceptance. In case of general offers the acceptance can be made by the offeree by acting upon
the offer (Manchester Diocesan Counci, 1970).
Acceptance must be prior to expiry or revocation of an offer. Likewise, when any offer is made
by a person then such person is liable to revoke such offer provided there is no accepted (Byrne v
Van Tienhoven, 1880). But when an offer is made through an advertisement then its revocation
must also be made through advertisement to reach the public large.

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A Consideration is the value which is paid for the performance of promise under the contract. A
consideration must be sufficient even if it is not adequate, then; also it is a valid consideration
and is analyses in (Biotechnology Australia Pty Ltd v Pace , 1988).
The Intention to be in legal relation means that the parties must have legal intention to be in
contract with each other.
A Capacity of parties must be present, that is, parties must be major and of sound mind.
Application
Ming gave an advertisement in paper which stated that the person who will bring the paper will
be given the haircut @ $10.
Hence the advertisement is not an offer but invitation (Pharmaceutical Society Of Great Britain v
Boots Cash Chemists (Southern) Ltd , 1953). But, this is a unilateral offer and Ming had given an
offer by which the customer can avail the haircut @$10. If a person brings an advertisement then
he had acted upon the advertisement so there is deemed acceptance by the person (Carlill v
Carbolic Smoke Ball Co, 1893).
Now, the issue are resolved:
a) There exists a contract between the forty customers who had bought the advertisement as
they had acted upon the same and followed the mode which was described in the paper.
Hence Ming is bound to them (Carlill v Carbolic Smoke Ball Co, 1893).
b) No advertisement is bought by the ten customers who cannot be termed as an acceptance.
As the mode of acceptance was not followed by them as prescribed by Ming. Hence
Ming is not bound to them (Manchester Diocesan Counci, 1970).
c) A consideration is valid even if it is not adequate and hence on this principal Ming will
not be able to back out from his commitment that the consideration of $10 is insufficient
(Biotechnology Australia Pty Ltd v Pace , 1988).
d) In case of display notice, Ming is not safeguarded as he will have to advertise the
revocation of his advertisement and then only he can be safeguarded. As he had
advertised it to general public so he must inform general public by the same mode and
then only take back his promotion.
Conclusion
Ming is thus bound to forty customers and get away with ten customers who did not carry the
advertisement. Moreover consideration of $10 is sufficient and valid as per law and Ming cannot
back out from his commitment on this basis.
Reference List
Articles/Journals/Case laws
Gibson, A., & Fraser, D. (2014). Business Law. 8th ed. Sydney: Pearson Publications.