Kaplan Higher Education: Contract Law Analysis & Dispute Resolution

This case study delves into several contract law issues arising from Alan's attempt to sell his textbook via Facebook. It analyzes scenarios involving Bernard, Charleen, and Damien, evaluating whether valid contracts were formed with each party. The analysis considers legal concepts such as offer, ac...Read More

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Contents
Solution............................................................................................................................................2
The Issues raised..........................................................................................................................2
Applicable Law............................................................................................................................2
Application of Law......................................................................................................................3
Conclusion...................................................................................................................................7
Reference List..................................................................................................................................8

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Solution
The Issues raised
i. Is there any valid contract that is formulated amid the parties. If yes, then who are the
contracting parties?
ii. Evaluation of Bernard status and remedies if available?
iii. Evaluation of Charleen status and remedies if available?
iv. Evaluation of Damien status and remedies if available?
v. Kinds of Alternative dispute resolution and their pros and cons.
Applicable Law
The law of contract is an instrument with the help of which two classified parties enter in
contractual association. It is an instrument created by an offeror and an offeree. (Handbook
2015)
An offror is the primary element which starts the process of contract formation by making an
offer. Any statement in the form of conduct, oral or wrotten when made by the offeror
specufying his intention (in the form of terms) with an expectaion of sanction is an offer. it is
made to an offeree and is considered to be valid and complete when the offeree is in the notion
of the same (Gibson v Manchester City Council (1978).
The offeree consent to the offer terms is an acceptance. To become any acceptance as valid it is
necessary that the acceptance respond to the terms of the offer (Empirnall Holdings Pty Ltd v
Machon Paull Partners Pty Ltd (1988). The respond should not bring any changes to the offer
terms because if any changes are made it terminates the offer so made resulting in a counter
offer (Hyde v Wrench (1840). The original offer stand terminate when the counter offer is made.
(Latimer 2012)
When an offeree gave confirmation to the offer, it is necessary that such approval such come in
the knowledge of the offeror to make the acceptance binding in nature. Intention to make an
acceptance without any communication is nothing and is held in (Felthouse v Bindley (1862).
At times, there is no offer that is made by the parties, but, acts are undertaken to receive offers in
form of issue of advertisements, display of good, tenders, actions, etc. Such acts are invitation to
treat and are not categorized as an offer in law and are analyzed in (Pharmaceutical Society v

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Boots Chemists , (1953)). In invitation, offers are expected by the inviter and upon receipt of the
same if an acceptance is made then there is a concluded contract otherwise not and is analyzed in
(Fisher v Bell (1961). (Robert & Bibi, 1998)
The parties to the contract must make the promises with legal intention. In commercial contract
the legal intention is presumed to be present and the same is absent on domestic contract and is
held in Balfour v Balfour [1919] (Luke 1970)
The promises so made must be supported with something of value called consideration. Also, the
parties must be major and of sound mind. (Latimer 2012)
Application of Law
Alan was a student of Kaplan Higher Education. He took commercial Law and scored good. He
is wishing to sell out his textbook Introduction to Business Law in Singapore. Alan is not
intending t sell his textbook to any person but only to his facebook friends. On 1st November
2015, he posted a statement on his facebook page that all of his friends who are registered in the
Kaplan Higher Education are invited to buy the textbook of Alan. Notes are also provided with
the textbook. The price of selling the textbook was mentioned @$200 and he also stated that
invitation that is made by him is only valid till 5th November 2015.
All the said facts, submits that the action of Alan is nowhere offer. it is an action of invitation to
treat. In Partridge v Crittenden [1968] an advertisement was disregarded as an offer and is
considered on the footing of an invitation.
Also, as per Carlill v Carbolic Smoke Ball Company (1892) the invitaion is made only to specific
prople, The statements by Alan on his facebook page are invitation that are made to specific
people that is, to his friends. So, no other person is permitted to make offer to Alan and the
offers which are received from the friends of Alan are the genuine offers.
Considering all the facts, the above raised issues are dealt individually
Issue i
On 4th November (evening), Damien gave money to Alan which was heartily accepted by Alan.
Though the offer is not made against the invitation that is made by Alan on his facebook, but, it

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is an independent offer that was made by Damien to Alan which was approved by Alan by
conduct, that is, when he accepted the money. So, an offer is reciprocated with accepted. Thus, a
contract takes place amid Alan and Damien.
Issue ii
In the given issue the status of Bernard is evaluated.
Alan has made an invitation to offer to his friends which are part of the facebook and those who
are also resisted in the Kaplan Higher Education. Bernard comply with both the criteria as he
was one of the friends on the facebook of Alan also registered in the university.
It is clear that Alan has made an invitation and all the intending persons must make an offer to
Alan. The invitation is also made to Bernard. Bernard, on 2nd November 2015, considering the
invitation of Alan has asked Alan as to whether can he purchase the book @ $150. This is not an
offer that is made by Bernard to Alan. It is a request of seeking the correct information on the
price and thus as per Stevenson, Jaques, & Co v McLean, (1880) there is no offer that is made by
Bernard.
Alan in response to the query that is made by Bernard submitted that he is not willing to sell the
book at such a low cost and is only intent to sell the book to any person who offers him $200. So,
on 3rd November, Alan has communicated the reply to the query. But, at this stage there is no
offer that is made by Bernard to Alan against the invitation that is made by Alan.
Now, the only invitation that is remaining in existence is what is made by Alan initially that is,
@$200. Bernard on the night of 3rd November in order to gave his acceptance made a post along
with money specifying that he is confirming the accept the book of Alan @200.
But, it is stated that till now the only possible action that valid was the invitation that was made
by Alan initially on his facebook. Till date there was no acceptance that was made by Bernard
and thus how can he accept an invitation without an offer.
The acts of Bernard have no relevance in law and thus Bernard does not have any legal bondage
with Alan under which he can sue Alan.
Issue iii

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In the given issue the status of Charleen is evaluated. Alan has a younger sister Charleen. She is
also registered in the University of Alan and is also part of the friends of Alan on his facebook.
So Charleen also comply with both the criteria as she was one of the friends on the facebook of
Alan also registered in the university. Thus, the invitation that is posted by Alan for his friends is
also applicable to his sister.
On relying on the invitation that is made by Alan on the facebook, Charleen on 2nd November
made an offer to Alan specifying that she is indenting to buy the book @ $@200. Alan though
that his sister must be joking and he just smiled at her. Charleen expressed to pay the money by
6th. But, at that time, Alan was not listening to her and thinking something else and smiled
nodded his head.
Thus, even though an offer is made by Charleen to Alan but the approval/acceptance that is
given by Alan to Charleen is not valid in law. as per Balfour v Balfour [1919], the law has
presumed that there cannot be legal intention amid parties who are in domestic relation unless
the presumption is negated. In the given case also, Charleen and Alan are siblings and the
exchange of expressions amid the two only submits that there was legal intention on the part of
Alan to make a contract with Charleen. In absence of intention, there is no acceptance that was
made by Alan and Charleen. Also, when the acceptance is made then as per it should be
communicated and as per Felthouse v Bindley (1862) silence is not an acceptance in law.
Thus, no acceptance is made by Alan to Charleen so even if Charleen has given money to Alan
on 6th November, it has no relevance and there is no contract that is made amid the two.
Issue iv
In the given issue the status of Damien is evaluated.
Damien is also registered in the University of Alan and but he was not the part of the friends of
Alan on his facebook. So Damien does not comply with both the criteria as he was not one of the
friends on the facebook of Thus, the invitation that is posted by Alan for his friends is not
applicable to his sister.

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Bernard and Damien were friends. So, since Alan has never made an invitation to Damien and it
was only to specific persons, that is, those who are friends with him on facebook, But, Damien
was not the facebook friend of Alan and thus he has no authority to make any offer to Alan.
Damien independently of the invitation that was made part of the facebook heard of the fact that
Alan is intending to sell his book through Bernard. He message Alan that he is interested to
baying the book. He even messaged that he is even willing to send the money on 4th November.
In the evening of 4th November, Damien saw Alan and he gave $200 to him. It is an offer which
is given by Damien without any assistance to the invitation that is made by Alan on facebook.
Alan accepted the money by taking it from Damien, so, it is an acceptance by conduct. So, an
offer is reciprocated with accepted. Thus, a contract takes place amid Alan and Damien.
Issue v
Kinds of Alternative dispute resolution and their pros and cons
When any two parties enter into any kind of contractual relationship, then, one of the dispute
resolution mechanism that is normally favored by the parties is litigation, since time immoral this
is a kind of technique that is used by the parties to resolve their disputed. But, it is found that this
mechanism is very expensive, time consuming, non confidential and thus people have started
looking for another mechanism which is more confidential, quick and cheap. (Clarb 2014)
Once of the techniques that is identified by the parties to the conflicts is through Alternate
Dispute Resolution Mechnism (ADR). It comprises of varios other techniques such as,
arbitration or mediation or concillaitaion, but the core of Alternate Dispute Resolution Mechnism
is that it resolves the dispute amid the parties with the help of a process that is determined by the
parties themsleves. It is now important to understad the basic distinction that exista amid
Arbitration and mediation.
An arbitration is an Alternate Dispute Resolution Mechnism wherein the parties decides a third
party who is appointed to deal with the issues raised amid the parties and he acts like a quasi
judicial officer. The decisoon made by him is final and is only after analysis of facts and
evidence that the decision is reached at.

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Through arbitraion, confidentaily exisst as the procedure is dealt by an indeoendent person in
closed doors and amid the parties who are themselves the part of the dispute. The process is not
lengthy as the decsion is binding. But, it can be time consuming as aforma procedure is followed.
Also, at times the decision that is made is not acknowledge by the oarties but still have to abide
by the same as it is binding. (Michael 2013)
Mediation on the other hand also resolves dispute with the help of third person but is not as
formal as arbitration. It is quick and cheap. But, the decision is non –binding and thus parties can
go to courts for appeal making it lengthily and expensive process. The confidentially is then less.
(Michael 2013)
Conclusion
Thus, a contract is made amid Alan and Damien. Further, both arbitration and mediation are
effective ADRs but arbitration is more powerful because of its confidentiality and binding effect.

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Reference List
Books/Articles/Journals
Clarb (2014). ADR, Arbitration, and Mediation. Author House.
Luke, Hk (1970). The Intnetion to create Legal Relations. The Adelaide Law Review
Latimer, P (2012), Australian Business Law 2012. CCH Australia Limited.
Michael, L (2013). The Future of Dispute Resolution. LexisNexis Butterworths
Robert, M., & Bibi, S (1998), NetK. Retrieved May 20, 2017, from Contract Law Lecture -
Formation of Contract - Offer and Acceptance: http://netk.net.au/Contract/02Formation.asp
Case Laws
Balfour v Balfour [1919] 2 KB 571.
Carlill v Carbolic Smoke Ball Company (1892).
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988).
Fisher v Bell (1961).
Felthouse v Bindley (1862).
Hyde v Wrench (1840).
Gibson v Manchester City Council (1978).
Pharmaceutical Society v Boots Chemists ((1953)).
Partridge v Crittenden [1968] 2 All ER 421
Stevenson, Jaques, & Co v McLean (1880).
Online Material

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Handbook, T. L, 2015, The Law Hand Book. Retrieved May 20, 2017, from Elements of a
contract: http://www.lawhandbook.org.au/07_01_02_elements_of_a_contract/