A legal contract can be described as
an agreement between entities involving a client and contractor “(Lawteacher.net, 2016)”. Client
outlines the project objectives for the contractor to carry out the work under
required terms and deadlines.
An advertisement can be used as a tool to offer the loyal
consumers and therefore, forming a form of contract between the client and the
contractor. However, such a contract depends upon the terms or rules subject to
the offer and the acceptance. Generally, considering an offer has been accepted
and the acceptance has been communicated the offerer has to comply with
whatever has been offered. The classic case examples are of Felthouse vs
Bindley and Carlill vs Carbolic Smoke Ball Co.
An invitation to treat, however, is different from an offer.
An invitation to treat presents an offerer with option of further negotiation.
It can be argued that an invitation to treat provides a general public to make
an offer and does not guarantee any promise. An advertisement can be regarded either as an
invitation to treat or as an offer, depending upon the intentions of the
parties involved “(Law
Buddy, 2014)”. The leading case example
is of Pharmaceutical Society of Great Britian vs Boots.
Unilateral contract is formed when a contractor offers to
carry out the project in the offer. In
this particular scenario the acceptance does not need to be communicated and
can be accepted through the completion of the project or the performance of the
required act. For example, in the case of Carlill v Carbolic Smoke Ball
Co and O’Brien v MGN Ltd.
Ben (appellant) claims his rights against Mojo Beverage
(respondent), that the advertisement is a unilateral offer. Therefore, an
appellant can accept the offer and can claim that the respondent has revoked
the offer wrongly before completing respondent acceptance. The appellant can
argue that the advertisement is a unilateral offer and respondent published having
an intention of a binding agreement. In the advertisement, the respondent has
included the exact time, date and conditions. People can clearly identify by
looking at the advertisement that the respondent had a serious intention of
having a binding agreement. Considering Ben entered in the unilateral contract
with Mojo Beverage and regarded advertisement of Mojo Beverage as an offer,
therefore, he is eligible for reward after catching the Lord Harry. This is similar to the case of Carlill vs
Carbolic Smoke Ball Co (1893). The
wording of the advertisement clearly indicated the intention of Mojo Beverage
to make an offer and be bound by it to anyone who catches Lord Harry. However, the
contract will not be binding if the error in the advertisement was communicated
to Ben. In such circumstances, Mojo Beverage is not obligatory to comply with
the initial offer. As it is mentioned in the case that a Mojo Beverage
representative was on hand to certify the catch but did not communicated the
catch prize. Considering this, if Ben pursues the case, then it is a high
possibility that the claim will be successful.
A bilateral contract is one where a promise by one party is
exchanged for a promise by the other. The exchange of promises is enough to
render them both enforceable. Thus in a contract for the sale of goods, the
buyer promises to pay the price and the seller promises to deliver the goods.
An offer can be regarded as a statement issued by an entity
indicating willingness to enter into a contract on stated terms. Thus an offer
has to be communicated to the other party for example, Taylor v Laird. There is
a difference between an offer and an invitation to treat“(Lawteacher.net, 2016)”. The difference is
primarily based on intention, for instance, offer is an intention to be bounded
by an acceptance of the offered terms without further negotiations, such as
Gibson vs Manchester City of Council. Where as an invitation of treat can be regarded
as a continued negotiation process.
An offer can be
withdrawn before acceptance such as in the case Routledge v Grant. The
withdrawn of the offer shall be regarded as revocation. However, under any such
circumstances, the same must be communicated to the offered either directly or
indirectly. For instance, in the case of Byrne v Van Tienhoven the withdrawal
of the offer was treated as communicated after the telegram was received.
However if before acceptance a counter offer can be made which can be regarded
as a rejection of an offer, for example Hyde v Wrench. An offer can also be
terminated with lapse of a provided or set time“(Lawteacher.net, 2016)”, for example Ramsgate
Victoria Hotel v Montefiore. Particularly, as indicated by the case study
of Routledge v Grant, offer can be withdrawn if communicated to be open for
specific time period. An offer shall not be considered open if it lacks a
promise of consideration after a certain time.
Counter offer shall be considered as an offeree’s intention
to the acceptance of the offer with possible changes in the terms of the offer.
When an offeree makes a counter offer,
he forgoes his power of acceptance unless there is an evident intention of the
offeror to ask for the counter offer. The dissimilarity between a counteroffer
and an enquiry is; a counteroffer withdraws or revoke the original contract by
introducing new terms, however, a mere inquiry would be just request for the
different terms such as in case of Moss
vs Old Colony Trust and Routledge v Grant. The classic case of Hyde v Wrench
offers a detailed insight on the traditional offer and acceptance problem. The
law regards the acceptance of an offer final and legally binding only when the acceptance
matches the offer and the offeree agrees to comply with all terms of the offer.
The postal acceptance rule is effective since 1818. The rule
was established during the Adams v Lindsell study. The offeree (plaintiff)
failed to communicate the acceptance of offer on time and the goods were, therefore,
sold to another party by the offeror (defendant). The defendant was charged
with the breach of contract on the basis that acceptance was effective at the
time of posting. However, the
instantaneous means of communication are treated differently in the postal rule
and do not favor the consumer because it regards the modern means as
acknowledged. According to Australian law a contract is not legally completed
unless an acceptance is communicated to the offeror. The acceptance shall be in
any form and it is not essential that a posting of a letter of acceptance is
required, unless offeror specify it or intends it“(Lawteacher.net, 2016)”. The classic example is the case study of
Tallerman & Co Pty Ltd v Nathan’s Merchandise.
Electronic acceptances and negotiations have
become commonplace and all the critical aspects of contract formation and
validity is applicable. In this particular case, it can be argued that Liveststock
Brokers perhaps benefit from postal rule because telex, or fax are excluded
from postal rule as they are considered as instantaneous modes of communication
rather than an email or in this particular case a reply letter, which is
subjected to marginal delays. Hence, there is a possibility that rejection of
an offer on the grounds time lapse may not stand valid.
in this particular scenario the Livestock Brokers in its reply letter put up a
mere inquiry and hence must not be regarded as a counteroffer. Considering that
reply letter was not a counteroffer, therefore the offer of the original
contract shall not be terminated.
Presuming that livestock Brokers sent
the fax on June 14 but Dorper Sheep Sellers do not receive it may perhaps not
benefit from the postal rule as telex and faxes are excluded from the postal
rule. In this case particular case Dorper Sheep Seller’s claim of Livestock
Brokers late response of an acceptance of the offer has a possibility of being
According to the Australian law a lease
shall be considered as a commercial or retail lease if the premises is
permitted to be used for the commercial business or the retail business and is
treated as being entered into after the execution of an offer and acceptance of
an offer among the involved parties.
The parole evidence rule preserves
integrity of a written document. The rule protects the terms of contract and
prevents entities to change the terms through oral declarations that are not
stated in the original contract or document. The classic example is the case of
Henderson v Arthur where the plaintiff was the seller and the defendant was the
tenant and the agreement promised to pay the certain amount at certain time. Also in the case Hutton v Warren the rule is
to provide a notice period.
Consideration can be considered as a
price of a promise. It is not an
important aspect of a contract however, according to the law the payment must
be provided to make the agreement binding “(Consideration. Parol Evidence to Show True Consideration in
Deed, 1924)”. However, gratuitous promises or considerations are not to be
regarded as enforceable.
According to the rule a consideration
is not regarded as consideration if it is voluntary, in such a case the
consideration is regarded as in the past and shall not be enforceable
“(Australiancontractlaw.com, 2016)”. For example in Roscola v Thomas the
promise was not binding. However, an exception can be seen in the case of Pao
On v Lau Yiu Long, where the past consideration can be regarded as good
consideration provided it was done at the request of the promisor.
The Stilk v Myrick case shed light on
the existing duty rule. According to the existing duty rule a new promise is
not binding unless it varies from the original promise offered by the offeree. This
law shall weaken the claim of the promisee until the promise varies to a large
extent from the original binding promise Therefore, the new promises that are
not different from old promises will stand invalid under law.
This doctrine states that promisor is
inequitable if it fails to hold to the promise“(Australiancontractlaw.com,
2016)”. The Promissory Estoppel is only applicable in the case of pre-existence
of a contractual relationship between the entities involved. The law of
Promissory Estoppel affirms to assert offeror with their offer or promises. The case of Legione v Hateley led to the
inclusion of the doctrine of Promissory Estoppel in the Australian law. It also
includes preconditions that the defendant must provide a promise. The doctrine
was developed in the case study of Central London v High Trees. The concept of
Estoppel is based on the concept of consistency. This means that in the court a
person has to be careful regarding his statements and must not under any
circumstances make claims that are inconsistent with the previous claims or statements.
Thus in Australian law the doctrine still presents challenges and is subjected
Considering Stuart entered in a written
lease of 5 year to provide $1000 per week; the lease is legally binding upon
him till the end of 2015. The parole evidence rule will make the written
document binding and will protect the terms of the written document. Moreover, considering that Westphalia Marts
Pty Ltd reduced the lease as a voluntary consideration, hence an oral promise
of a reduced lease is not enforceable upon the Westphalia Marts. However, a
claim under implied terms to issue a notice period may be possible. It is not
clear from the scenario whether any prior notice on behalf of Westphalia Marts
was issued or not. Furthermore, several cases such as Wigen v Edwards and
Watkins & son v Carrig recognized the existence of existing duty rule and
ruled off any claims on the grounds of validity of new promises. Considering
the case of Stuart, the new promise to pay reduced lease until the improvement
in business does not vary from the original promise to pay the said amount. If
Stuart pursues a claim against Westphalia Marts there is a possibility that the
claim may not be successful.
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