Contract Formation Analysis
Added on 2020-03-28
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Running head: BUSINESS LAWBusiness lawName of the StudentName of the UniversityAuthor Note
BUSINESS LAW1Issue The issue in this case is to find out whether there has been an agreement which can bindFramOnline Pty Ltd (Farm) and Livestock Seller to its terms as per the rules and provisions ofcontract law and particularly the rules for offer and acceptance. Relevant LawA contract is a legal necessity which is required to make the promises done by two partiesbecome binding on each other. A contract is a form of agreement which becomes binding legallyonly if the parties to it are able to establish that agreement has all the necessary components tomake it a contract. the basic component which would be required by any agreement between theparties to become legally binding includes a valid offer made by the offeror, valid acceptancemade by the offeree, a consideration to be performed by the parties in relation to a promisesmade to each other, the legal capacity of the parties to get into a contract and the intention of theparties to create a legal relationship (Knapp et al. 2016, p. 03-05). An offer is a statement through which one party signifies its willingness to get into alegally binding transaction with another. An offer has certain requirements for the purpose ofbeing legally valid. Firstly as provided by the landmark case of Smith v Hughes [1871] LR 6 QB597an offer for the sale of goods have to be complete which means that it must have elementslike, price, delivery, nature of goods and time of its validity. In case such terms are missing froman offer the offer would be regarded as an invitation to treat, such invitation has no legalsignificance. An acceptance is the next step towards a contract. An acceptance occurs when the person towhom the offer has been made signifies a willingness to be bound to the terms of the offer. Just
BUSINESS LAW2like that of an offer the acceptance also has certain legal criteria to be met before it can beconsidered as a valid offer. The acceptance primarily has to be totally in accordance to the termswhich have been provided by the offer. For instance of the offer provides for the sale of X goodsfor $20 each on Monday, than a proper acceptance cannot take place if the offeree signifies topurchase X goods for $ 19.9 each on Monday. Thus a mirror image of the offer has to be createdthrough the acceptance by the offeree. In addition the acceptance has to be expressly signified bythe offeree to the offeror through the process of due communication. In case a particular mode ifacceptance has been asked for by the offeror than only such mode of acceptance can be utilizedto make a valid acceptance (Poole, 2016, p. 34). An offer can also come to an end as soon as the time provided in relation to its validitylapses as provided by McKendrick (2014, p. 122).Where an acceptance has not been made according to the terms of the offer and there areadditional terms which are added to the acceptance which were not present in the offer theacceptance itself becomes a counter offer and the offeree becomes the offeror. In addition assoon as a counter offer in relation to the original offer has been made the original offer is rejectedand comes to an end. This means that the offer is no longer open to be accepted. These principleshad related to offer acceptance and counter offer had been discussed in the case of Hyde vWrench (1840)
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