Validity of Agreement between Simon and Julie

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Question 1
Issue
The issue is to comment whether Simon and Julie have enacted a valid agreement for the job
in February or not.
Rule
Legal offer and acceptance are considered to be the two main essential elements of an
agreement. The offer would get enforceable for contract formation when it would have been
received by the concerned offeree. However, this aspect is not necessary in case of
acceptance and would be differ based on the type of communication used for conveying the
acceptance. When instantaneous mode (electronic mode) such as email, SMS, calls, telex and
fax would be used by the offeree then the acceptance would become enforceable only when
the offeror’s device has received the acceptance1. The verdict of Entores Ltd v Miles Far East
Corporation2 case is the testimony of this as the acceptance sent by the offeree through
instantaneous mode became enforceable and a contract was enacted between the parties.
Also, it is imperative that the offeree accepts the offer before it gets revoked by the offeror.
Further, it is noticeable that offeree can use any method to send his/her acceptance towards
the offer unless the offeror has specified about the mode of communication as evident from
verdict of Yates Building Co. Ltd v RJ Pulleyn & Son (York) Ltd3.
Application
Julie (offeror) has directed an offer to Simon (offeree) through email which contained the
quotation amount for the job in February that had been inquired by Simon. Julie has also
indicated that the offer would remain valid for acceptance until the week end. Simon also
obtained quotation from other service providers and decided to take the service from Julie as
her quote was lowest. He was worried that she would check the mails on weekends or not and
hence, he used electronic mode of communication i.e. SMS and sent his acceptance for the
offer. The SMS was successfully received by Julie. Based on the common law, it can be said
the instant in which the SMS was successfully received by her, then only the acceptance gets
enforceable and valid contract is enacted. Further, Julie has not specified the mode of
conveying acceptance and thus, sending SMS would not impact the contract formation.
1 Andy Gibson and Douglas Fraser, Business Law (Pearson Publications,2014, 8th edition ) 174
2Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3
3Yates Building Co. Ltd v RJ Pulleyn & Son (York) Ltd (1975) 237 EG 183
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Conclusion
Simon and Julie would be bounded with a valid contract because the offer gets accepted
before it being expired and thus, both the parties have to satisfied the contractual liabilities.
Question 2
Issue
The issue is to comment whether Peter and Julie have enacted a valid agreement for the job in
the local fundraiser. The presence of consideration for the parties along with the intention to
enter into legal contractual relation would also be discussed based on the given scenario.
Rule
Consideration for the contracting parties is another very essential element for a valid contract
formation as no contract would be formed if the parties do not have valid consideration.
However, the adequacy of consideration for the parties is not necessary. Further, the
consideration for the parties must be mutually agreed based on their course of action and also,
it should not be defined by the courts4. Anything which is agreed by the parties would be
considered as valid consideration as evident from the verdict of Chappell & Co Ltd v Nestle
Co Ltd5 case where a chocolate wrapper was considered as valid consideration for
contracting parties and a valid agreement had formed between them based on this
consideration. Further, the intention to form legal contract needs to be proved only when the
contracting parties are connected through domestic relations6.
Application
Peter and Julie are not related through domestic relationship which implies that both the
parties have intention to create legal contractual relationship. Also, it can be seen that both
the parties have valid consideration as Peter would obtain the traffic service for the fundraiser
event and Julie would get an Ester goods hamper which is not proportional nor adequate.
However, presence of adequate consideration is not necessary for contract formation and
thus, a valid contract is formed between the parties. No family relationship is between the
4 Shayne Davenport, Business and Law in Australia (Thomson Reuters, 2014, 5th edition) 96
5Chappell & Co Ltd v Nestle Co Ltd [1959] UKHL 1
6 Ibid. 1
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