Legal Framework Case Study: Contract Law and Postal Rule Analysis

This case study analyzes a legal framework concerning a contract dispute between FramOnline Pty Ltd and Local Livestock Seller. The central issue revolves around the breach of contract related to the sale of beef cattle. The assignment explores the application of the postal rule in contract law, detailing its principles and relevant case precedents like Adam v Lindsell. It examines the communication between the parties, including the offer, counteroffers, and acceptance, and determines whether a legally binding contract was formed. The analysis considers elements of a contract such as offer and acceptance, consideration, capacity, legal intention, and certainty. Ultimately, the case study concludes that FramOnline Pty Ltd breached the contract by selling the cattle to a third party, potentially exposing them to legal action from the Local Livestock Seller. The document references key legal cases to support its findings.

Running head: LEGAL FRAMEWORK
Legal Framework
Name of the Student
Name of the University
Author Note

1LEGAL FRAMEWORK
Table of Contents
Issue.................................................................................................................................................2
Rules................................................................................................................................................2
Application......................................................................................................................................3
Conclusion.......................................................................................................................................6
Reference.........................................................................................................................................7

2LEGAL FRAMEWORK
Issue
According to the case study the issue has been arises whether FramOnline Pty Ltd has
breached the terms of contact with the buyer called Local Livestock Seller for selling the cattle?
Rules
The postal rule is a part of contract law which describe the terms of contract for the
acceptance of an offer has communicated through any posting rules like email or phone or letter
for establish a legally binding contract between the two parties. Another term under the posting
rule is when an offer has been given by host or letters it will not effective until another person
received the letter but as soon as it has been received and the acceptance will take place the
contract effective from that moment. When the contract want to be repeat revocation therefore it
is should be received by the party for making the offer before they send a post the letter of
acceptance.
In the case of Tallerman & Co Pty Ltd v Nathan's Merchandise (1957) the court has
found the rule of posting rules of the contract but it is not completed until the offers should be
accepted by the party through the communication of a letter or email. Therefore a contract is not
formed until and unless the posting of a letter of acceptance cannot able to justified by the offer
when it could be contemplated and intended to application of such acts (McKendrick, 2014).
Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH House of Lords
[1983] is another case of Postal rules where the plaintiff has take legal action against the offering
for breach of contract and according to the application of the postal rule in this case has not
formed but instead of it a general contract has been formed.

3LEGAL FRAMEWORK
In another case Bressan v Squires Supreme Court of New South Wales [1974] the
application of posting rules has been applied because the parties have communicate through
using mails for the formation of the contract.
Adam v Lindsell [1818] is one of the most significant cases of the postal rule where it
has first applied in this case. The court has found that a contract has been formed through a mail
between the parties where both of having common intention and accept the offer but later the
acceptance could not be determined. Therefore plaintiff has take legal action against the
defendant for causing lots of problem and breach the terms of Postal rule of acceptance.
In the cases of Entores Ltd v Miles Far East Corpn (1955) and Holwell securities Ltd v
Hughes (1974) the same transaction of postal rules has been establishes through the
communication in relation to the acceptance by the parties (McKendrick, 2014).
Application
The postal rule has one of the important part in the contract law where it has been found
the one of the quickest form of business communication through the post services under the
contract law. There are several forms of communication which define most fastest way of
Communications like telex, phone, message and email. Through the postal rule the contract has
been formed under the basic terms of contract which includes offer and acceptance,
consideration, capacity to contract, legal intention and certainty. The postal rule is a part of
contract law which describe the terms of contract for the acceptance of an offer has
communicated through any posting rules like email or phone or letter for establish a legally
binding contract between the two parties. Including this features it also made some rules which
are the offer which has been given through the postal letter should not effective until it has been

4LEGAL FRAMEWORK
received by the other party or the offer after the acceptance of the offer. It will effective from
that moment and form a legal contract between two parties. For the effectiveness of revocation
the contract should be formed and the offer which has been received by the offered person before
they post the letter to the acceptance.
The fact of the case is FramOnline Pty Ltd has run a business of sale of beef cattle to a
firm called Local Livestock Seller. They send a letter to the local seller for selling a beef kettle in
total which price should be paid $1,500 and asked to reply to accept this offer. The local seller
has replied back where they want to drop the price and make it $1,200 per head. However again
the FramOnline Pty Ltd reply them that they are not able to less the price not more than about
$1,400 per head for a beef kettle. However they did not get any reply from them. After few days
the local seller has replied them that they want they accept the offer but in meanwhile the
FramOnline replied by back saying they are not interested to make the business and they also
entered into the process of selling the cattle to another purchaser. Therefore as per the terms of
contract the FramOnline Pty Ltd has breached the terms of contract and the local seller has rights
to take legal steps against them (McKendrick, 2014).
The basic five elements of a contract are:
 offer and acceptance which defines that it should be an offer and other party will accept
the offer which form agreement between two parties
 the consideration switch stated that the contract has been made in the exchange of money
or any property between the two parties

5LEGAL FRAMEWORK
 the capacity to contract define the parties who are entitled to enter into the contract
should be capable to form the contact which includes that they must be sound mind and
complete the age of minority
 the legal intention define that the purpose of the agreement should create a legal intention
for formation of an agreement where a legal relationship will be established between the
two parties
 The certainty defines where the contract has been se formed for a particular of time and
must be completed under the terms of the contract.
In the postal rules a contract can be formed through a medium of communication which
would be email, letter or phone. Therefore as per the terms of contract and postal rules a contract
has been satisfying the terms of contract where make an offer to another party which satisfied the
term of capacity legal intension and certainty. Therefore according to the first letter of
FramOnline Pty Ltd which was sent to the local seller that they want to form the contact by
accept the offers on 14 October but before the acceptance of the offer both of the parties has
bargain about the business material and on the date of 14th October the local seller has accept the
final offer. Therefore contract has been formed but before the acceptance FramOnline Pty Ltd
has breached the terms and from another contract with different purchaser. Therefore they breach
the terms of contract.
According to the terms of the postal rule the effectiveness of the contract has applicable
when the acceptance has been communicated through a mode of communication. Therefore it is
defining the basic rule of the agreement for the communication of acceptance is received. When
a letter has been post therefore an offer has been given and reply to the letter to the offer make
the acceptance of the offers (McKendrick, 2014).

6LEGAL FRAMEWORK
In the case of Adam v Lindsell [1818] the postal rule has first decided by the court. In this
case the defendant has posted a letter to the plaintiff by offering to sell some wool and requested
to reply the acceptance of the offer to the post. However the letter which has been posted by the
defendant has gone to a wrong address and plaintiff didn’t make any knowledge about the letter.
Therefore due to the misrepresentation the defendant did not get any reply from plaintiff and
they sold the wool to a third party. Therefore the court has raises the question whether the
contract has any effectiveness due to the arrived of the letter to the address and they sell the wool
to the third party. Therefore there is no reason to revocation of the offers. Therefore in this case
there was a contract has exist before the sale of the wool to the third party even though the letter
has not received by the defendant but the defendant was liable to breach the contract.
Therefore as per the terms of contract FramOnline Pty Ltd has breach the contract with the
local seller while selling the cattle to the third party. Though they do not have any knowledge
about the acceptance by the first party of the offer but while selling it to third party it make a
contract and FramOnline Pty Ltd has breach the terms of contract towards the Local Livestock
Seller (McKendrick, 2014).
Conclusion
As per the case study it can be concluded that due to the breach of the terms of contract
the local seller can take legal action against FramOnline Pty Ltd for selling the beef cattle to the
third party.

7LEGAL FRAMEWORK
Reference
Adam v Lindsell [1818] B & Ald 681
Bressan v Squires Supreme Court of New South Wales [1974] 2 NSWLR 460
Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH House of Lords [1983] 2
AC 34
Entores Ltd v Miles Far East Corpn (1955)
Holwell securities Ltd v Hughes (1974)
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK).
Tallerman & Co Pty Ltd v Nathan's Merchandise (1957) 98 CLR 93, 111-112