Business Law

Topics: Offer and acceptance, Contract, Option contract Pages: 2 (638 words) Published: June 9, 2013
Question 1
The issue of this question is whether Scott and Kyle can bring legal action against Wayne for what they feel is a breach of contract.

Under the law governing offer and acceptance, a valid offer has been made through an advertisement. In order for an offer to be accepted, the party must entirely accept the offer. The rules governing acceptance has to be positive not passive. Silence does not forms acceptance. The general rule of acceptance is that the acceptance must be received by the offeror, otherwise it has no effect. An offer made to a particular person can be rightfully accepted by him alone and in order to avoid complications, acceptance is to be in writing received by the offeror or if it is orally, it must be heard by the offereor. In applying the law to the facts of the case before us, Wayne has made a valid offer to sell his house for $2 million dollars. In this case, Wayne is the offeror and Scott, Kyle and Magdelene are the offeree. Scott offers to buy the house for $1.8 million dollars and Wayne said nothing. In this case, Scott has now become the offeror and Wayne is the offeree as a counter offer has been made. Looking at the principles of acceptance, an acceptance made must be positive not passive. Wayne said nothing about the offer therefore there was no communication between them of any sort of acceptance. This would highlight that the fact that silence does not form acceptance as per case of Felthouse v Bindly (1862) The offeror cannot impose acceptance just because the offeree does not reject the offer. Therefore, Scott wanting to take legal action towards Wayne is not valid as there was no form of acceptance in either form of writing or orally. When Kyle came to view the property, he agrees to Wayne’s offer of $2 million dollars but “subject to contract”. Wayne agreed. The definition of subject to contract is that both parties are agreeable to the terms of the offer but propose that they negotiate a formal contract on the...
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