Legal Rights to Refuse to Sell Book

This article discusses the legal rights of refusing to sell a book under contract law. It explains the difference between invitation to treat and an offer, using the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd as an example. It also explores the formation of a contract.

ENTERPRISE LAW
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Question 1
Issue
The issue is to find whether Carla has the legal rights to refuse to sell the book to Brendan
under the highlights of contract law.
Rule
A valid contract would be formed between the parties when there is a valid offer and
acceptance. Further, it is essential to distinguish between invitation to treat and an offer as
any display with the price tag is not an offer and mere invitation to treat. Also, when there is
invitation to treat then the respective party (buyer) has to make an offer to the seller parry
which may or may not be accepted by seller (Taylor & Taylor, 2015). According to the
verdict of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd
[1953] EWCA Civ 6 case, the display of the medicine with price does not imply that the
medicine is offered at the written price rather it is invitation to treat. Also, the seller party has
to rights to refuse the offer of the buyer party. Further, the contract would be formed between
the parties when the offer of the buyer in the context of invitation to treat would be accepted
by the seller (Andrews, 2014).
Application
It is apparent from the case facts that Brendan wanted to purchase the ancient book which he
has seen in the display of Clayton Books Store at the mentioned price. The representative of
the store Carla has informed Brendan that the displayed book has already been sold to
someone. However, she asked him to search at the back store. Fortunately, he has found one
copy of the same book and then he has reached Carla with the displayed price to purchase the
book. It is apparent that displaying an object with price is mere invitation to treat and not an
offer. Thereby, the display for the sale of book is invitation to treat and hence, Carla has legal
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rights to refuse to sell the book to Brendan. This is because by agreeing to buy the book at the
agreed price, Brendan only made an offer and was not communicating acceptance.
Conclusion
It would be fair to conclude that Carla has the legal position to refuse to sell the ancient book
to Brendan because display of the book is mere invitation to treat and not an offer.
Question 2
Part A
Issue
The issue is to determine whether Edward has enacted a legal agreement with Greg or not
considering the presence of pre-requisite elements of agreement.
Rule
Offer would become enforceable when it reaches to the concerned offeree. However, the
enforceability of the acceptance depends on the timing as well as the mode of communication
used by the offeree to convey the acceptance towards the offer (Edlin, 2015). When postal
mode of communication is used by the offeree for communicating the acceptance, then the
acceptance would become enforceable on offeror at the moment when the offeree puts the
acceptance letter into the post mail box (Carter, 2016). In this context, the acceptance would
become valid and a contract would be formed between the parties. Here, it is not essential for
the enforceability of the acceptance that it would have received by the offeror in the given
time. The relevant case validating the above rule is Adams v Lindsell (1818) 1 B &Ald 681
(Parker & Davenport, 2014).
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Application
Edward has directed his offer to sell goods to Greg on February 4 which becomes enforceable
on February 7 when it is received by Greg. Further, Greg has accepted the offer of Edward
and thus, sent his acceptance letter through post on February 7. Here, the acceptance becomes
enforceable on the offeror at the moment when he placed the letter into the mail box. Also, at
that point only, the parties have entered into a contractual relationship and a valid contract
has been formed between Edward and Greg. Contract formation would not be affected with
the fact that acceptance letter has received by Edward on February 11 and Greg has sent an
email to Edward regarding the revocation of the acceptance. Thereby, it would be said that
Edward and Greg have enacted a valid contract on February 7 only and they have to fulfil the
contractual duties.
Conclusion
Edward and Greg have enacted a valid contract because Greg has sent a valid acceptance
through post which became enforceable at the moment when he posted the acceptance letter.
Further, revocation of the acceptance on the part of Greg would be invalid and it would not
affect the enacted contract.
Part B
Issue
Based on the facts provided, the pivotal legal issue is to determine if Peter can be held liable
for unpaid $ 50 by Edward.
Rule
Presence of mutual consideration is a pivotal requirement for enactment of a legally binding
contract. In cases, where modification in original contract may be required, the new contract
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would be enforceable only when both contracting parties have incentive in the form of
consideration. Where there is existing payment obligation, a typical amended contract that
may be enacted relates to the payment of part debt. The question thus arises is whether these
contracts would have valid consideration for the creditor (Parker & Davenport, 2014). A
relevant case in this regards is Foakes v Beer [1884] UKHL 1 where it was indicated that a
modified contract agreeing for part payment of debt would be declared void since there is no
consideration involved for the creditor. It also indicated that part payment of debt would
always lead to losses for the creditor and thereby could never serve as valid consideration for
amending the contract. Such kind of contracts is only agreed reluctantly by the creditor
(Carter, 2016). However, there has been a change in this understanding in recent times as
highlighted by the verdict in Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 case. It
was outlined in this case if the practical benefit derived from payment of part debt is greater
than the remedy for breach of contract, then payment of part debt can serve as a fair
consideration.
Application
The facts provided highlight that Edward has sold goods worth $ 450 on credit to Peter who
needs to make payment by February 28. By February 20th, it has come to light that Peter’s
financial situation is deteriorating. As a result, Edward was concerned since it could happen
that Peter would default on the whole payment. Instead, Edward gave a offer to Peter to pay
$ 400 instead of $ 450 to discharge the existing debt. This was accepted by Peter and the
payment was made. Clearly, there is consideration present for Edward in the acceptance of
part payment of $400. This is because if Peter by 28th February would declare himself
bankrupt then potential recovery would be $ 0. However, by giving a discount of $ 50,
Edward has been able to recover $ 400. Hence, the contract is enforceable and unpaid
amount of $ 50 cannot be demanded by Edward later on.
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Conclusion
The discussion above highlights that the amended contract would be valid and legally
binding. Therefore, Edward cannot demand the unpaid amount of $ 50 from Peter.
Part C
Issue
The issue is to highlight if the contract regarding the sale of the goods would be enforceable
between Edward and Peter if they are connected through domestic relationship.
Rule
Intention of the parties to enact a legal contract is a crucial element for the enforceability of
the contract. When the parties are not linked through any domestic relationship, then it has
been assumed that the parties have intention to form legal commercial contract relationship.
However, this aspect becomes essential if the parties are in family relationship or are friends
as evident from the verdict of Jones v Padavatton [1968] EWCA Civ 4 case (Gibson &
Fraser, 2014). Thus, actions of the parties that shows that parties want to make transaction of
commercial nature is essential aspect to analyse in regards to find that parties had intention to
create legal relation. The underlying assumption in domestic agreements is that the intention
to create legal relations is not present (Paterson, Robertson & Duke, 2015).
Application
In this case, it is apparent that Edward and Peter are connected through domestic relationship
as they are cousins. Thus, the pivotal aspect is to find whether the parties have intention to
create legal relationship or not. Here, no evidence is present that shows that Peter and Edward
have signed any written contract or have made oral statements indicating intention to legally
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enforce the agreement. Thus, it can be said that parties did not have any intention to make
legal contract relationship. Hence, the sale contract is not enforceable on the parties.
Conclusion
Based on the above discussion, it can be concluded that there is no intention of Peter and
Edward to enact legal contractual relationship and hence, the contract enacted for the sale of
the goods would become void and thus, no contractual liabilities would arise for them.
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References
Andrews, N 2014, Contract Law, 3rd edn, Cambridge University Press, Cambrisge
Carter, J 2016, Contract Act in Australia, 3rd edn, LexisNexis Publications, Sydney
Davenport, S & Parker, D 2014, Business and Law in Australia, 2nd edn, LexisNexis
Publications, Sydney
Edlin, D 2015, Common law theory, 4th edn, University Press Cambridge, Cambridge
Gibson, A & Fraser, D 2014, Business Law, 8th edn, Pearson Publications, Sydney
Paterson, J Robertson, A & Duke, A 2015, Principles of Contract Law, 5th edn, Thomson
Reuters, Sydney
Taylor, R & Taylor, D 2015, Contract Law, 5th edn, Oxford University Press, Oxford
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