Common Law Assignment
Student No. 17004217
In a letter dated 14/02/2011, the manager (Dave) of Excellent Foods (EF) outlined conditions in writing to the manager (Ben) of Safe Foods (SF) in relation to the purchase of EF. These conditions were that SF must pay the valued amount of EF, which totaled $120,000, $30,000 more than the original amount that SF had been prepared to pay and stipulated during earlier negotiations. At the time of the earlier negotiations, SF also had set a purchase requirement, which was that EF’s sales must increase by 20% over the next two months and if this requirement was met, SF would be prepared to pay the $90,000.
After earlier negotiations, EF had their business valued at $120,000 and notified SF of the valuation and that they now required this amount, not the $90,000 that SF had offered. SF did not reply to EF.
Whilst EF met the sales increase target and forwarded the record of sales to SF along with the transfer of business contract as well as a new condition of the contract being that EF require 10% of the 120,000 within 14 days, SF responded in writing stating they no longer were interested in purchasing EF. It would appear that EF are no longer interested in purchasing SF due to the $30,000 price increase and the term that they would now need to pay 10% within 14 days.
An important aspect in forming a legally binding contract is giving and receiving the acceptance of an offer. The requirement of acceptance with every binding legal contact is tied closely to the concept of unqualified mutual assent. Only when both parties have given their mutual consent does the law consider a binding legal contact to have been formed. Hence, if the offeree remains silent, their silence cannot constitute an acceptance.
Another important aspect when creating a legally binding contract is that the acceptance of the offer...