Legal Rights of Jane in Contractual Relationships with Eric, Gardening Gadgets and Grace

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Contents
Issue............................................................................................................................................................2
Relevant Law...............................................................................................................................................2
Application of law.......................................................................................................................................4
Conclusion...................................................................................................................................................7
Reference List.............................................................................................................................................8

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Issue
What are the legal rights of Jane against Eric, Gardening Gadgets and Grace?
Relevant Law
In Australia, if any party wish to establish a contractual relationship with any other party, then, it
is necessary that all the contract essentials must be comply with.
Offer – Any statement or action or conduct which is communicated by an offeror to an offeree
with the hope of approval is an offer in contract law1. An offer can be made to anyone specific or
to the public at large. As per R v Clarke2, it is necessary that the offer so made by the offeror
should comes within the notion/knowledge of the offeree to consider it complete and binding
upon the parties.3
Acceptance – When the offeree after receipt of the offer gave his approval to the same, then,
such an approval is called an acceptance in law4. An acceptance must be given by the person to
whom the offer is made and no one else.
An acceptance is complete only when the offeror is within the notion/knowledge of the
acceptance so made and is held in Felthouse v Bindley5. Silence is not regarded as an acceptance
in law. However, as per Adams v Lindsell6, when the acceptance is made by letter or post, then,
the acceptance is complete immediately and there is no need that the acceptance should come
within the knowledge/notion of the offeror.7
When the acceptance is made by email, then, the postal acceptance rule is not applicable. In
Entores Ltd v Miles Far East Corporation8 it was held that the postal acceptance rule has no
relevance in instant mode of communications for instance, emails. Thus, any acceptance send
through email is considered to be valid only when the same comes in the knowledge or read by
1 Carlill v Carbolic Smoke Ball Co [1893].
2 R v Clarke (1927).
3 Ewan McKendrick and Qiao Liu, Contract Law: Australian Edition, Macmillan International Higher Education, 25-Sep-2015.
4 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 527.
5 Felthouse v Bindley (1862) 142 ER 1037)
6 Adams v Lindsell (1818) 1 B & Ald 681
7 Paul Latimer, Australian Business Law 2012, CCH Australia Limited, 2011.
8 Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3

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the offeror or receiver. If the email is not read then the acceptance is not held to be complete and
there is no contract formation amid the parties and is held in Re Imperial Land Co of
Marseilles9.10
Invitation to treat – When the person who desires to establish a contract does not make any kind
of offers, rather, he acts in such manner so as to receive offers, then, it is an invitation to treat in
law11. An invitation to treat is not an offer, rather, the person with the help of advertisements,
auctions, tenders, etc, seek offers from the intending persons. The persons who rely on such
advertisements etc can make an offer to the inviter and when the inviter affirms the offer, then,
there is an acceptance which results in the formation of a contract amid the parties. In Fisher v
Bell12, an advertisement is treated as an invitation to treat and the person relying on the
advertisement or the brochure must make an offer to the inviter.13
Counter offer – As submitted that when the offer is affirmed by the offeree, then, it is an
acceptance in law. But, when the offeree does not give his confirmation but brings changes in the
terms of the offer, then, it is not an offer in law and is considered as a counter offer. As per Hyde
v Wrench14, the counter offer cancels the original offer and the only offer that remains is the
counter offer which must be accepted by the original offeror to make a contract amid the
parties.15
Revocation of offer – Normally when an offer is made and the same is accepted then there is a
contract amid the parties. But, when the offer is made but the same is not accepted by the offeree
and the offer remains for certain time duration, then, it is necessary that the offer must be
accepted with such time frame otherwise the offer is considered to be revoked because of lapse
of time. In Dickinson v Dodds16 it was held that if any acceptance is received after the lapse of
time of offer then it is not an acceptance in law and there is no contract that is made amid the
parties.
9 Re Imperial Land Co of Marseilles (Wall’s Case) (1872) LR 15 Eq 18.
10Simone W. B Hill, Email Contracts - When is the Contract Formed?" [2001] JlLawInfoSci 4.
11 Pharmaceutical Society v Boots Chemists (1953)
12 Fisher v Bell (1961)
13 Andrew Burrows, A Casebook on Contract, Bloomsbury Publishing, 20-Sep-2018.
14 Hyde v Wrench (1840) 49 ER 132.
15 Michael Furmston and G.J. Tolhurst, Contract Formation: Law and Practice, OUP Oxford, 25-Mar-2010.
16 Dickinson v Dodds (1876).