Business Law Assignment: Contract, Offer, and Consideration Issues

This business law assignment addresses three key legal issues. The first issue examines whether a claim for $100,000 against Mojo Beverages is valid, considering the rules of offer revocation, unilateral offers, and the formation of contracts through advertisements. The second issue assesses th...Read More

Running Head: BUSINESS LAW
Business Law
Name of the Student:
Name of the University:
Author Note

1BUSINESS LAW
Answer 1
Issue
Whether Ben can claim $100,000 from Mojo Beverages in the light of rules relating to the
revocation of an offer
Rule
In the case of Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 it had been stated by
the court that once a unilateral offer which has been made through an advertisement is acted
upon a contract is formed. The case also stated that renovation has to be in a similar way as
compared to the offer.
It had been ruled by the court in the case of Payne v Cave (1789) 3 TR 148 that an offer can be
withdrawn through the process of revocation of offer. The court stated that a revocation of offer
can be done any time before there has been an actual acceptance of the offer.
In the case of Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344 it had been stated by
the court that the revocation of offer has to be directly or indirectly signified to the offeree(s). In
this case the defendant sent a letter for revocation and claimed the postal rule to enforce the
revocation which did not reach the offeree. The court stated that revocation has to be received to
be valid.
In addition it had been stated by the court in the case of Dickinson v Dodds. (1876) 2 Ch D 46
that it is not necessary for an offer to be sufficiently communicated and the revocation is valid
even if the information for the revocation has been provided by a third party. In this case it had

2BUSINESS LAW
been stated by the court that where a reasonable person would have believed that the offer had
been revoked than an offer would be actually revoked effectively.
In Errington v Errington Woods [1952] 1 KB 290 the court ruled that once the party had relied
upon the offer and embarked upon it the offer is no longer available to be revoked.
Application
It has been provided through the situation that Mojo has made an advertisement that any person
who caught a special fish form the river would be entitled to receive a price of $10000. As per
the case of Carlill v Carbolic Smoke Ball Company once a unilateral offer which has been made
through an advertisement is acted upon a contract is formed thus when the fish was caught by
Ben the contract was formed. However in the case of Payne v Cave the court stated that offer can
be withdrawn through the process of revocation of offer before acceptance is made. Thus if Mojo
effectively withdraws the offer there is no contract. In Byrne & Co v Leon Van Tien Hoven &
Co the court ruled that the revocation may be direct or indirect. Here there are chances of
indirect revocation through rumors. Moreover in the case of Dickinson v Dodds the court held
that revocation is valid even if the information for the revocation has been provided by a third
party. However a reasonable person would not have believed on rumors. In addition the
representatives of Mojo did not notify Ben about the flaw in the pricing which was attempted to
be changed from $100000 to $1000. Thus it can be stated that the offer was not revoked and as
soon as Ben caught the fish the contract was formed.
Conclusion
Ben has a valid claim against Mojo

3BUSINESS LAW
Answer 2
Issue
Whether a valid contract has been formed between Livestock Brokers and Dorper Sheep Sellers
Pty Ltd based on the provisions of rejection of offer and electronic communication of
acceptance.
Rule
In the case of Hyde v Wrench (1840) 49 ER 132 it was held by the court that where are counter
offer has been made by one of the parties to the correspondences the original offer is destroyed
by such counter offer and cannot be any longer accepted by the offeree. In this case an offer has
been made by the defendant to sell his farm to the claimant at a price of 1000. In reply to the
offer the claimant signified his wish to purchase the farm at a price of 950 which had been
refused by the defendant. The claimant then made an attempt to accept the original price of 1000
in order to purchase the Farm. The defendant has refused to sell the farm to the claimant. An
action for specific performance brought by the claimant in this case was rejected by the court
based on the above principles.
In the case of Stevenson Jaques & Co v McLean (1880) 5 QBD 345 the court had made a ruling
that when only and enquiry is made by a party in relation to an offer it cannot be treated as a
counter offer. An enquiry can be form of a simple question which the offeree has asked in order
to clarify any doubts with respect to the offer.
The postal rule of acceptance signifies that up on the posting of a correctly address letter of
acceptance of contract is formed between the parties as for the case of Adams v Lindsell (1818)
1 B & Ald 681. To the contrary of this ruling in Entores Ltd v Miles Far East Corporation [1955]
2 QB 327 the court provided that this case is not applicable in modern communication through

4BUSINESS LAW
fax and email. Under the principles of this case when the acceptance has actually entered the
system of the other party and acceptance is made irrespective of whether it has been read or not.
An offer is deemed to have ended when other party does not accept offer within the stipulated
time according to the case of Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Ex 109.
Application
In this case there was an offer made by Dorper Sheep Sellers Pty Ltd for the sale of dorper sheep
flock to Livestock Brokers. The offer had provided for the number of days to be sold and also
stated that the offer was valid only till 14 days from 1st June. An enquiry had been sent by
Livestock to know about whether usual terms for applicable to the sale on 6th June. However
there was no reply made by Dorper Sheep. As per the case of Hyde v Wrench counter offer
rejects the original offer. However, as provided by the case of Stevenson Jaques & Co v McLean
an enquiry cannot be considered as a counter offer. Where no counter offer has been made the
offer which had been made by Dorper Sheep was still valid to be accepted till 14th June.
However in the case of Ramsgate Victoria Hotel v Montefiore it has been stated by the court that
an offer is deemed to have ended when other party does not accept offer within the stipulated
time. In order to successfully form the contract with Dorper Sheep, Livestock have to accept
offer before or on 14th June. However it has been stated in the scenario that the fax of
acceptance has been sent on 14th December which is way beyond the deadline set out by the
offer. In the given situation as the time of the offer has passed it cannot be any longer accepted.
Therefore no contract has been formed between Dorper Sheep and Livestock
On the other hand where an assumption is made that Livestock had made a Fax to Dorper Sheep
on 14th June itself but the fax had not reached the fax machine of Dorper Sheep different rules

5BUSINESS LAW
need to be applied. This situation can be resolved by applying the rule which has been provided
by the case of Entores Ltd v Miles Far East Corporation. The case stated that when the
acceptance has actually entered the system of the other party and acceptance is made irrespective
of whether it has been read or not. Therefore as there was a transmission error and the fax had
not reached the system of Dorper Sheep there was no acceptance in the situation. As there was
no acceptance it can be stated that no contract was formed between the parties.
Conclusion
There has not been any contract form between Dorper Sheep and Livestock in both the situation
is due to different reasons. In the first situation the contract has not been formed because the
offer has elapsed by time. In the second situation the contract has not been formed because the
fax has not reached the system of Dorper Sheep and it was an incomplete communication.
Answer 3
Issue
The issue in this case is whether Stuart is liable to pay the shortfall of $300 per week of the Year
to Westphalia Marts Pty Ltd
Rules
Part consideration is not a good consideration or not at all a consideration. The rule have been
established primarily through the Pinnel's case 1602 5 Rep, 117. In this case Cole the defendant
had to pay Pinnel the plaintiff a certain amount of money. The plaintiff had filed a case to
recover the debt owed by the defendant. On the request of the plaintiff the defendant had paid a
lesser amount but before the due date and claim that this would entirely discharge his debt. The

6BUSINESS LAW
Court ruled in this case that in general a part payment cannot entirely settle the due. However
when the part payment is accompanied by an additional chattel or has been made before the due
date on the request of the plaintiff this would be a valid consideration.
Another case where this issue had been discussed is the case of Foakes v Beer (1883-84) L.R. 9
App. Cas. 605. In this case adjustment has been made against the defendant that he has to pay a
certain amount to the plaintiff. The defendants went into an agreement with the plaintiff that he
will pay the amount in installments. The plaintiff sued the defendant for the interest due on the
installments. The court in this case held that the plaintiff was entitled to the interest as no
consideration has been provided in relation to the agreement.
The doctrine of promissory estoppel prevents a person from going back from his promise. The
Doctrine falls under the provisions of equity. The Doctrine has been established through the
obiter dicta of the case of Central London Property Trust Ltd v High Trees Ltd [1947] KB 130.
In this case it was stated by the judge that intervention would be made by equity where a promise
had been made and it would not be in the ends of justice let the person to ignore his promise.
The Doctrine has been applied in the case of Combe v Combe [1951] 2 KB 215 where the
decision of the court signified that there has to be an existing legal relationship between the
parties to apply the doctrine of promissory estoppel. In addition it has been stated by the court
that the doctrine has to be used only as a defence and not as a provision for bringing a claim. The
Doctrine has been described not as a sword but as a shield.
Application
In this case Stuart was in a legal relationship with Westphalia Marts Pty Ltd with respect to a
lease. The lease terms provided for a payment at the rate of $1000 per week. However the

7BUSINESS LAW
businesses of Stuart have declined. He has signified the lessor that he would have to terminate
the five year lease early if the lease price is not reduced to $700. The lessor agreed to this bust
latter made a claim for the entire amount. By applying the Pinnel's case it can be stated that the
lessor would be entitled to full payment only if no additional consideration is provided with the
part payment. However in this case the action of Stuart not to cancel the lease early can be
regarded as a valid chattel. This would make the part payment valid.
In addition by applying the case of Combe v Combe it can be stated that as Stuart was in a legal
relationship with Westphalia Marts Pty Ltd, and it would not be in the ends of justice let the
Westphalia Marts to ignore the promise. Thus the doctrine can also be used to defend the claim
Conclusion
Stuart is not entitled to pay Westphalia Marts Pty Ltd

8BUSINESS LAW
References
Adams v Lindsell (1818) 1 B & Ald 681
Byrne v Van Tienhoven (1880)
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
Central London Property Trust Ltd v High Trees Ltd [1947] KB 130
Combe v Combe [1951] 2 KB 215
DICKINSON V. DODDS [1876] 2 CHD 463
Entores Ltd v Miles Far East Corporation [1955] 2 QB 327
Errington v Errington Woods [1952] 1 KB 290
Foakes v Beer (1883-84) L.R. 9 App. Cas. 605
Hyde v Wrench (1840) 49 ER 132
Payne v Cave (1789) 3 TR 148
Pinnel's case 1602 5 Rep, 117
Stevenson Jaques & Co v McLean (1880) 5 QBD 345