Business Law - 4 steps process assignment

Topics: Contract, Invitation to treat, Contract law Pages: 8 (2348 words) Published: April 16, 2015
Question 1
Step 1
The legal issue is whether the element of agreement can be established to form a contract between Jordan and Will.

Step 2
Making a contract requires three elements, which are agreement, intention to be legally bound and consideration (Do and Duperouzel, 2014). However, the element of agreement will be discussed here. An agreement is a meeting of the minds of both parties in which they comprehend what essential terms for the contract are. It is made of offer and acceptance. Offer is made by offeror to express the willingness to contract on certain terms, whereas acceptance is the assent to these terms of offeror (Do and Duperouzel, 2014). An offer requires several rules to contract.

Firstly, it must be sufficiently complete and promissory (Do and Duperouzel, 2014). For instant, in Harvey v Facey [1893] AC 552 case, Harvey and Facey discussed about a possible trade of the Bumper Hall Pen using telegram. Harvey asked Facey to sell him a Bumper Hall Pen and would pay for the lowest cash price. Facey then replied the lowest cash price which was £900, also by telegram. Harvey agreed to that price but Facey refused to sell, which led to him being sued by Harvey, thought that they had agreed on a contract with that price as an offer. However, the court held that it was not a legally enforceable promise, as it was merely a statement providing information on what Harvey had asked, not a promise to sell him the pen. Secondly, an offer must be intended to form a contract if accepted, so an advertisement are not generally considered as an offer (Do and Duperouzel, 2014). In Partridge v Crittenden [1968] 2 All ER 421 case, Partridge put an advertisement in a magazine stated “Bramblefinch cocks and hens, 25/-each”. He then was charged with unlawfully offering wild birds for sale. Nevertheless, the court held that it was not an offer, but merely an “invitation to treat”, where people who are interested are the one to make an offer to buy. Next, an offer can be addressed to a specific person or the whole world (Do and Duperouzel, 2014). For example, in Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 case, the company published an advertisement offering 100 pounds for any person who used the smoke ball three times per day as instructed and caught influenza or any other disease afterward. Carlill, after getting influenza for using smoke balls as instructed in the advertisement, asked the company to pay him 100 pounds as promised. However, the company refused to pay and the issue was brought to court. The court said that this advertisement is indeed an offer because it is addressed to a particular person capable of accepting this offer. Therefore, it was intended to be legally binding. Finally, an offer must be open for a reasonable time. It can be lapsed by expiration, withdrawal of the offeror before acceptance or if a counter-offer is made (Do and Duperouzel, 2014). On the other hand, acceptance is unconditional and absolute agreement on the terms of an offer. It must be identical with the offer and communicated to the offeror by the person to whom the offer was made (Do and Duperouzel, 2014). The timing is very important to decide whether an acceptance is effective. Generally, an acceptance occurs when it is communicated to the offeror and the contract is reached at that time and that place where the offeree receives the acceptance. However, there is exception, which is when the acceptance is made by post (The postal acceptance rule). It is, when the parties intend to have the acceptance communicated by post, the offer will be accepted at the time a properly addressed and stamped letter is given to the post office, and a binding contract will be formed at the time when and the place where the letter of acceptance is posted. Such as, in Adams v Lindsell (1818) 106 ER 250 case, Lindsell offered Adams some wool and asked for a reply by post. Unfortunately, the offering letter was delayed. After Adams had posted a...
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