Contract and Agency Law: Analyzing Offer, Acceptance, and Disputes

This assignment analyzes contract and agency law principles, focusing on the essential elements of a valid contract: offer, acceptance, intention to create legal relations, and consideration. The paper examines these elements through a case study involving a painting project, where Benji seeks to hire a painter. The analysis explores the communications and negotiations between Benji and two potential contractors, Ah Choon and Dazzle Paint, to determine whether a legally binding contract was formed. The assignment references relevant case law, such as Ramsgate Victoria Hotel vs. Montefoire and Felthouse vs. Bindley, to illustrate key concepts like offer expiration and the requirement for unequivocal acceptance. The paper concludes by discussing how contract disputes can arise and suggests potential solutions for Benji, highlighting the importance of mutual agreement and the potential for legal recourse if a resolution cannot be reached. It emphasizes that in the absence of acceptance, no contract exists, thereby making any discussion of the contract void.

Running Head: Contract and Agency Law
Title: Contract and Agency Law
Name:
Institution
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Running head: Contract and Agency Law
1. A contract is a valid agreement, which is legally binding between the two parties.
Contracts may be verbal or in writing. ("Contracts and the Law - FindLaw", 2017)
According to the Law a contract is considered to be valid if it contains the following essential
elements:
1. Offer
2. Acceptance
3. Intention to create legal relation
4. Consideration to be paid
An offer is a proposal to another to enter into a binding contact. An offer is generally made
either to an individual or group or the world at large. An offer becomes binding only when it
is communicated and accepted by the offeree. The power of acceptance has to be given to the
offeree. ("Essential Elements of Contract", 2017). After a certain time lapse an offer
cannot be considered valid. Like in the case of Ramsgate Victoria Hotel vs.
Montefoire, there was an offer from the defendant side to purchase the shares of the
claimant company. After six months when the price had duly fallen the claimant said
he wants to go ahead with the offer to which the defendant wasn’t ready. It was held
that due to the nature of the contract it was considered as lapsed after a period of time.
In our case, the offer from Ah Choon, he also refused to do in the same price and if we
relate to this case the offer could be lapsed after a time period. ("Ramsgate Victoria
Hotel v Montefoire", 2017)
Acceptance occurs when the party agrees to accept the conditions of the offer in full by way
of an act or statement. Acceptance must be unequivocal and communicated to the offeror.
Exactly what has been offered needs to be accepted; partial acceptance is not considered as a
contract. When there is a counter offer or additional conditions are added to the same offer
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Running Head: Contract and Agency Law
then it is no longer acceptance of the original contract. It is not necessary to accept the offer
only by way of words. At times the offer is also accepted by way of action. (Stim, 2017). In
the case of Felthouse vs. Bindley, there was a deal between nephew and uncle that the
nephew was buying a horse from his uncle and if nothing is heard from the latter side then he
would consider the horse to be his. By mistake the horse was sold at the auction. The uncle
wanted to proceed and he could, as there was no contract, because of silence of the uncle,
which can’t be treated as acceptance. Similarly, in our case when Ah Choon and Dazzle Paint
quoted the price there was no response of accepting the contract from Benji’s side. So it is
treated as void agreement. ("Felthouse v Bindley", 2017)
In our case the offer was made by Ah Choon specifying that “Call now for lowest price. No
time limit, no pressure, take your time to consider our offer!” But Benji didn’t accept this
offer as his words were just that “will think about it”, which cannot be termed as an
acceptance of the offer. However, when he called Dazzle Paint they told that the price would
be $3000, and then Benji responded saying, “Ok, that sounds ok, I am not in a rush”. And he
provided his contact number and address. This is a case where there is preliminary
negotiation and not an agreement. There were no words from Benji regarding the contract
being given to them. It can just be termed as knowing the terms and conditions of Dazzle
paint. Hence, no legal contract exists with Dazzle Paint also.
Consideration is the price paid by the promisee in exchange for their promise. Consideration
may be some right, detriment, loss or responsibility given, interest or benefit going to one
party or forbearance suffered or undertaken by the other party. ("Contracts and the Law -
FindLaw", 2017). In our case thought there is consideration in both the case of Ah Choon
and dazzle Paint but the discussion with Ah Choon and Dazzle Paint cannot be considered as
a legal contract as there was no acceptance of the offer. Mere talking about the policies
cannot be termed as a contract.
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Running head: Contract and Agency Law
For a contract to exist the parties must intend to create a legal relation. Generally, the
consideration is an evidence of this, where the promise agrees to pay a certain amount to the
promisor on the fulfillment of the agreement. For ex- A friend offers a ride to home and the
other friend accepts it, this is not a contract as there is no intention to enter in a legal binding
agreement, However, if we hire a cab and pays him the fare for it then it is a binding contract.
Here, though there was an intention to enter into a legal contract but due to the missing of
acceptance clause it was never a contract. Benji never accepted the offer provided by both the
parties.
2. Contract disputes happen whenever the minds of the contracting people are is disagreement
regarding some of the conditions of the contracts. (Akhbari, 2017). For a contract to be
valid, all the parties should mutually agree to the points of the contract. There was no contract
in this case i.e. it was void from the very beginning due to the absence of the basic
requirements of a contract. Still if the matter isn’t resolved Benji has to take out ways to solve
this matter. In this case he is right that he didn’t accept Dazzle Paint’s offer as it was a mere
pre negotiation and there was no acceptance from his side. But also, he cannot ask Ah Choon
to complete his work on the same price, which he had earlier offered as after a reasonable
time period an offer can deemed to be expired. And, also Ah Choon cannot force Benji to get
his work done from the former, as there was no contract between them and only a discussion.
Benji can talk and resolve the matter. If they agree to a price, which is acceptable for all the
three of them, Benji can give half contract to Ah Choon and half to Dazzle Paint. If still there
is no consensus among them then Benji has the right to sue them and the matter will be
solved in the court.
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Running Head: Contract and Agency Law
References
Akhbari, K. (2017). Contract Dispute Lawyers. LegalMatch. Retrieved 15 August 2017,
from https://www.legalmatch.com/law-library/article/contract-dispute-lawyers.html
Contract agreement - Offer and acceptance. (2017). E-lawresources.co.uk. Retrieved 15
August 2017, from http://www.e-lawresources.co.uk/Offer-and-acceptance.php/
Contracts and the Law - FindLaw. (2017). Findlaw. Retrieved 15 August 2017, from
http://smallbusiness.findlaw.com/business-contracts-forms/contracts-and-the-law.html
Contracts Law: Offer and Acceptance. (2017). Retrieved 15 August 2017, from
http://www.4lawschool.com/contracts101/offer.htm
Essential Elements of Contract. (2017). E-law.bc.ca. Retrieved 15 August 2017, from
https://www.e-law.bc.ca/art_essential.html
Felthouse v Bindley. (2017). E-lawresources.co.uk. Retrieved 17 August 2017, from
http://www.e-lawresources.co.uk/Felthouse-v-Bindley.php
Formation of A Contract | Lecture Notes. (2017). Lawteacher.net. Retrieved 15 August 2017,
from https://www.lawteacher.net/lecture-notes/agreement-lecture.php
Ramsgate Victoria Hotel v Montefoire. (2017). E-lawresources.co.uk. Retrieved 17
August 2017, from http://www.e-lawresources.co.uk/Ramsgate-Victoria-Hotel-v-
Montefoire.php
Stim, R. (2017). What Constitutes Acceptance of a Contract Offer?. www.nolo.com.
Retrieved 15 August 2017, from http://www.nolo.com/legal-encyclopedia/acceptance-of-
contract-offers-32651.html
Study Material-1: (1) OFFER AND ACCEPTANCE. (2017). Sol.du.ac.in. Retrieved 15
August 2017, from https://sol.du.ac.in/mod/book/view.php?id=644&chapterid=361
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Running head: Contract and Agency Law 6