Legal Analysis of Contract Law: Tenders and Business Agreements

This case study delves into several contract law scenarios. It examines the legal implications of university tender processes, analyzing offers from Greenland, Enviro, and Plant Forever, focusing on the postal rule and the necessity of clear acceptance. Furthermore, it assesses the correspondence between Footloose, Famous Footwear, and James Shoes, determining the validity of offers and acceptances in a business context. Finally, the study evaluates Richard's claim against Cube Laboratories Pty Ltd, emphasizing the importance of explicit offers and acceptances in establishing contractual obligations. The document provides detailed legal analysis and conclusions for each scenario.

Running head: LAW OF CONTRACT
Law of Contract
Name of the Student
Name of the University
Author Note

1LAW OF CONTRACT
Question 1
Facts
The university called for tenders to supply green seeds, last date of submission being
1st June. Greenland delivered its tender personally on 29 May which was added to the tender
box. Enviro sent its tender by post on 15 May which reached the University on 17 May and
got stored in a file by the administrative assistant as it reached early. However, the assistant
forgot to add it to the tender box and it was lost within the files. Plant forever posted the
tender on 30 May that reached the university on 2 June and was still dropped into the tender
box.
Issue
To determine the contractual position of the university with Greenland and Enviro and
Plant forever.
Rule
Under the English common law of contract, AGC (Advances) Ltd v McWhirter (1977)
1 BLR 9454 the tenders are not regarded as offers if there incomplete and mere invitation to
treat or invitation to offer. An invitation to treat or an offer is not legally binding as it is just
an invitation to the world and it does not involve a promise. A tender can be held as an offer
only when it comprises of specific legal or commercial terms like consideration/price,
completion date, mode of delivery, and other important terms that are important for the
contract. Moreover it is not compulsory to accept a tender offer except for cases where it is
mentioned that the lowest tender price would be selected.

2LAW OF CONTRACT
Under the common law of contract the postal rule of acceptance of an offer says that
when the letter of acceptance is posted by the sender ant travels via post, the acceptance is
said to be made the moment the letter was posted.
Application
 Greenland:
Greenland hand delivered its offer of the tender invitation on 29 March which was
within the last date of submission. However its offer was rejected even being the second
lowest price on the basis of the rumour regarding its unreliability. The University has no legal
obligation to Greenland as it is not necessary or mandatory to accept an offer of a tender.
 Enviro:
This company sent its tender early which got lost in the files. It can be held that the
university never accepted Enviro’s offer. Therefore the University and Enviro have no
agreement between them.
 Plant forever:
The tender offer that Plant forever sent by post on 30 May reached the university on 2 June.
However the last date of submission was crossed yet as per the principles of postal rule it
would be considered that the offer was made why plan forever on 30 May itself for they
posted the letter on that day. Moreover, Plant Forever did not get the acceptance letter of the
university as it was damaged by a worker, which signifies a proper relationship between the
university and Plant forever and the university is eligible to demand compensation from plant
forever for committing its full stock to a regional council.
Conclusion

3LAW OF CONTRACT
Therefore it is clear that the University has no obligation with Greenland and Enviro,
instead has a contract with plant forever.
Question 2
Issue
To ascertain the legal effects of correspondence of footloose with that of famous
footwear and James shoes.
Rule
As per the English Common law, a contract that lacks specific offer terms cannot be
considered as a binding agreement. In the case of Smith vs Huges (1891) LR 6, QB 597, the
court held that as to whether an agreement is complete or not is to be judged as per the
objective. Test.
An invitation to an offer comprises of an offer which is not complete and therefore,
has no legal effect on the parties. The acceptance needs to match completely with the terms
of the offer as any change in the offer makes the acceptance invalid as well. When a party
gives a counter offer, the original offer stands terminated.
In the case Hyde v Wrench (1840) Beav 334, it was held that a contract needs all its
essential elements to be marked as valid and enforceable, and offer and acceptance is one of
the most vital among them. The criteria for a proper offer and its appropriate form of
acceptance is necessary to make a contract binding.
Application:
The advertisement given by Footloose is not an offer but an invitation to offer.
Moreover, no specific information was given in the advertisement pertaining to the mode of

4LAW OF CONTRACT
payment, quantity of goods and the delivery date. Therefore, the advertisement is not an offer
but an invitation to offer.
Famous Footwear in its letter stated that they accepted the offer of Footloose and wish
to buy 500 pairs as per the company’s price. The letter of Famous Footwear also contained a
delivery date. However, the letter of famous footwear would not constitute an acceptance as
an advertisement is not an offer and therefore and acceptance of advertisement amounts to
nothing.
While, on 4 October James’s shoes responded to the invitation of offer of Footloose
and stated that it wants to buy 2000 pairs of sling back sandals, for $ 30000 including GST.
This constitutes a valid offer.
Footloose sent a direct offer to James’s shoes offering them to sell 2000 pairs for
$30000, excluding GST. This constitutes a counter-offer. The final contract came into force
on 10 October when James shoes would collect their delivery of the sling back sandals on 1
November. This is a mark of a valid contract as offer and acceptance is one of the most
essential elements of a valid contract that needs to be fulfilled.
Conclusion
The communication of the companies, between 1 to 8 October did not lead to a valid
offer and acceptance. However, on 10 October a valid contracts was established between
Footloose and James’s shoes on the basis of a valid offer and acceptance.

5LAW OF CONTRACT
Question 3
Issue
To determine whether Richard has a claim against Cube Laboratories Pty Ltd.
Rule
A valid contract agreement would involve a proper offer and acceptance between the
parties. An assurance or a word of mouth cannot be held as an offer or even a promise. An
offer must be clear and unambiguous.
Moreover, an offer without a proper acceptance extinguishes the offer itself.
Application
In the given case, Richard himself proper that he would like to continue with the
company, while Warren himself did not offer Richard to continue. Therefore, there is no offer
from Warren to Richard. It was Richard who stated about his desire to continue with the
company and Warren agreed to it. Therefore, it constitutes no contractual obligation between
Richard and Cube.
Conclusion
Therefore, Richard has no claim against Cube.

6LAW OF CONTRACT
Reference
AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454
Smith vs Huges (1891) LR 6, QB 597
Hyde v Wrench (1840) Beav 334