Contract Law Case Study: Examining Offer and Acceptance - Carl and Jo

This case study examines whether a valid contract was formed between Carl and Jo regarding Carl's stamp collection. Jo expressed initial interest but needed to assess her finances. Carl stated that he would consider her silence by Saturday as acceptance. When Jo later stated she couldn't afford it, Carl believed a contract existed. The analysis applies the principle from Felthouse v Bindley [1862], which established that silence does not constitute acceptance in contract law. Consequently, the study concludes that no valid contract was formed between Carl and Jo because Jo did not communicate her acceptance, and Carl's assumption based on her silence is not legally sufficient.

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Contract Law

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Issue
The key issue is whether a valid contract was formed between Carl and Jo?
Facts
Carl asks Jo to sell his stamp collection to which Jo replied that she is interested; however,
she needs to work out her finance before making any commitment. Carl told Jo that if she did
not give her confirmation by Saturday, he would assume that she has given her acceptance to
purchase the stamp collection. After no hearing from Jo, Carl assumed that Jo is ready to
purchase the stamp collection; however, Jo said that she could not afford it.
Law
A valid contract requires that the offeree must give a valid acceptance to the offeror which
should match exactly with the terms of the offer. The general rule of acceptance is that it
must be communicated by the parties to become effective. In the case of Felthouse v Bindley
[1862] EWHC CP J35, a nephew told his uncle that if he did not hear from him by the
weekend, he would consider that he has sold his horse to him. A horse was sold mistakenly in
an auction, and a suit was filed based on the fact whether a contract is formed between the
parties. The court provided that silence cannot be considered as a valid acceptance
(McKendrick and Liu, 2015).
Application of Law
In the given scenario, Carl considered the silence of Jo as a valid acceptance which is not
considered as valid as provided by the court in the judgement of Felthouse v Bindley.
Conclusion
In conclusion, a valid contract has not formed between Carl and Jo.

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References
Felthouse v Bindley [1862] EWHC CP J35
McKendrick, E. and Liu, Q. (2015) Contract Law: Australian Edition. London: Macmillan
International Higher Education.