Law of Contract

Topics: Contract, Contract law, Contractual term Pages: 5 (1651 words) Published: September 5, 2008
contract but do not appear to be a relevant issue here.
While it is possible for offers to be "made to the world”1, K's advertisement is an "invitation to treat"2. It cannot be construed as an offer as it shows no intention on K's part to be bound to its terms, in contrast to the wording of the advertisement in Carlill v Carbolic Smoke Ba// Co3.

Thus A's letter to K dated 21 April is the first possibility of an offer. However the terms of this letter are too vague to be construed as an offer. This is because an offer must contain all the terms necessary for the contract to come into existence4. Offering to work for a fee "between $12000-$20000" is not certain enough to constitute an offer and the letter is more appropriately seen as a supply of information only5. Thus K's letter to A on 24 April is, contrary to K's belief, merely an offer, not an acceptance. The nature of K's letter implies a clear intention to be bound by the terms of the enclosed contract and the letter sets out the method by which the signed contract is to be returned. As this is an offer, not acceptance, A is considered to have received the offer on 28 April.

This raises a question as to whether:
(a) the offer is the letter itself, with the "contract" document to be signed an event that does nothing more than put the already agreed terms in writing; or
(b) the enclosed contract is itself the offer made by K.
These issues are similar to those dealt with by the High Court in Masters v Cameron6. However that case dealt with the issue of what constituted acceptance and so is not a direct precedent for the issue in this case.

1 See eg Carhill v Carbolic Smoke Ball Co. (1893) 1 QB 256
2 Eg Boots Cash Chemist (1953) 1 QB 401
3 Op. cit.
4 G. Scammell & Nephew Ltd v H.C and J.G Ouston [1941] AC 251: but cf. Hillas & Co. Arcos Ltd [1932] All ER 494
5 Eg Harvey v Facey (1893) AC 552
6 (1954) 91 CLR 353
In any event K directs A to sign and return the contract "by express mail". A attempts to first fax the contract and then mails it. We must determine if such actions constitute an effective acceptance.

In order for acceptance to be effective it must be unqualified7 and communicated8. Unless there is evidence to the contrary communication will be determined objectively by the courts9. There is no issue of conditional acceptance in this case as A merely signs the contract and attempts to return it.

However A's first attempt to communicate acceptance is by fax. The courts have held that whether such acceptance has been communicated is by determining the time at which the fax is received by the offerer10. In this case, no fax is in fact received by K due to A’s faulty fax machine. Thus there has been no acceptance communicated by this action. It is well established that an offeror can stipulate the means of acceptance by the offeree11. In this case the letter, though it mentions the avoidance of delay does not set a time period in which acceptance must take place. It does however stipulate "express mail". The facts are unclear whether A uses normal or express mail. In the event that she has not her acceptance may not be effective.

In the event that A uses express mail, or the courts find that using normal mail is a means of acceptance that is not more disadvantageous than the stipulated means12 the postal acceptance rule will result in the acceptance having been effectively communicated on 28 April, the date of posting13.

On the other hand, following Brogden v Metropolitan Ry Co14 and Empirnall Holdings v Machon Paull15, an unsigned contract may still create contractual obligations if the parties act consistently with its terms. In this case this argument is even stronger because not only have both parties acted consistently with the terms of the document but K has drafted it and A (and possibly K) have signed it.

Thus the facts disclose both an effective offer and acceptance. Consideration also appears to be satisfied as A is providing its services in...
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