Aspects of Business Offers and Proposals - Assignment Example

Aspects of Contract and Negligence for Business CASE 1 Offers and Counter Offers According to English Contract Law, an offer or proposal is defined as an appearance of eagerness to contract upon certain terms. An offer permits the other party to accept the offer and provides the basis of the agreement. In order to form or enter into a particular contract, there is requirement of an offer along with acceptance (New Age International, n.d.) As observed in the case of “Storer v Manchester City Council” (1974), a counter offer implies a refusal of the original offer which is thereby damaged and cannot be accepted later. Moreover, a counter offer acts as a statement made by the offeree that has got the lawful effect of discarding the initial offer or proposal and offering fresh and new offer to the offeror (University of London, 2012). The Operation of the Postal Rule According to English Contract Law, it has been recognised that the communication done through post ultimately gives rise to various practical problems. The offer that is posted and the letter of acceptance which takes several days to arrive is one of the problems by communicating through post. With reference to the case of “Household Fire Insurance v Grant” (1879), in order to overcome this difficulty, the courts established the rule of ‘postal acceptance’ which depicts that acceptance of offer is complete when it is posted (University of London, 2012). The Time of Communication of Electronic Messages According to Article 4, the communication through ‘Electronic Messages’ are regarded as the communication that the parties engaged in an agreement or an offer made by means of data messages. The conception of data messages include information or data created, despatched, received or accumulated by visual, electronic or magnetic means (United Nations, 2007). The Revocation of an Offer As identified in the case of “Byrne v van Tienhoven” (1880), an offer can be rescinded in any situation or condition before accepting the offer but the revocation should be informed and corresponded to the offeree, though it is not obligatory on behalf of the offeror. It can be stated that a particular offer can be withdrawn in any condition or situation (United Nations, 2007). Advice In this particular case study, the primary consideration would be that whether a contract has already been formed or not between Jones Ltd and Smith Plc. From the case study it has been identified that, Smith Plc is not obliged to go for any such agreement in order to perform servicing to all the photocopying machines of Jones Ltd because no such contract has been formed and that was just a proposal or an offer. It is due to the fact that Smith Plc accepted the offer of Jones Ltd and the acceptance can be termed as good and thus there is a formation of contract. However, later, Jones Ltd altered its intention and in this connection, the question arises of applying the rule of postal acceptance. If there was application of postal acceptance rule then a contract would have been formed. Jones Ltd’s change of mind at a later stage could not have disturbed the contract. Therefore, non availability of postal acceptance ultimately led to the withdrawn of the offer. In this case study, Jones Ltd has withdrawn the offer or proposal from Smith Plc through rapid form of communication i.e. through telephone than the post. If there lays no application of postal acceptance rules then no contract would be formed before replying upon accepting the offer by Smith Plc. Thus, it can be stated that the withdrawn of the offer should be determinative and no such contract arises in this situation and Smith Plc is not obliged to enter into a contract with Jones Ltd. CASE 2 Consideration The conception of consideration is viewed as one of the most important approaches in which the law courts make suitable judgements regarding whether an agreement along with offer and acceptance should be lawfully implementable. With reference to the case of “Currie v Misa” (1874-75), with regard to law, a significant consideration consists of certain interest, right, benefit or profit which is accrued to one party or certain damage has been delivered or provided to the other (Oxford University Press, 2012). The different factors of consideration in an agreement include that consideration must be adequate and it should have certain lawful and material value not having adequacy in relation to a ‘fair’ charge for the contract (Oxford University Press, 2012). Past Consideration “Past Consideration” is one of the necessary parts of consideration. The term “Past Consideration” is defined in a legal view as an act that has been provided already or certain proceedings that has been executed which cannot be encouraged by the other party’s thing, act or promise in exchange and is not truly an undertaking of consideration (Oxford University Press, 2012). It has been identified that past consideration is valid only if it is given by the promisee at the desire of the promisor. Though past consideration is a valid consideration, there lay strong controversies regarding whether past consideration is good or bad (Oxford University Press, 2012). The Rules of Intention to Create Legal Relations The conception or the rule of intention to create legal relations forms the primary component of any valid contract in various jurisdictions throughout the world. The term legal relations signify that the parties generally analyse their agreements as a lawful enforceable contract. It is very much necessary that all the parties that are engaged to an agreement must possess the rule to generate lawful relations in order to make the agreement to execute better (MacMillan & Stone, 2009). As observed in the case of “Jones v Padavatton” (1969), the rule of generating lawful relation is very practical and relevant especially in communal and domestic agreements. These agreements may be between the friends or between the family members. In this regard, there is an existence of an offer on behalf of one party which is being accepted by the other party along with the support of consideration (MacMillan & Stone, 2009). Advice It is not obligatory for Carol to enforce or to keep the promises which she made in the case study. The reason is that Carol did not make any contract or agreement with her friend as well as her hairdresser in order to keep her promise. Moreover, there lies no valuable consideration which consists of certain interest, right, benefit or profit which is accrued to one party or certain damage, tolerance, loss of accountability given, experienced or undertaken by the other (Dannemann, 2004). In addition, Carol did not make any contract or an agreement which is lawfully enforceable. This particular case study involving Carol is related to the rule of generating lawful relations because it is a matter of promise which is made between Carol’s friends that is often regarded as communal or domestic support of consideration. Thus, form the above discussions, it can be stated that Carol cannot be forced to keep her promises which she made. CASE 3 Privity of Contract “Privity of Contract” implies that only such parties who engage into a particular contract or an agreement may go to court or take any lawful action and certain obligations are implemented upon them. This “privity of contract” engages such contracts in many situations where a benefit or right is likely to be presented for a third party. In other words, ‘privity’ is a lawful term for a common shared and mutual relationship of property or power in order to enforce a warranty and a promise (Oxford University Press, 2012). According to the case study of “Dunlop Tyre Co v Selfridge” (1915), the significant elements of “privity of contract” include that there must be a consideration which has been provided by the promise and the applicant must adhere to enforceable “privity of contract”. It has been identified that in certain situations or conditions, “privity of contract” generates certain sorts of injustice and inadequacies for the contracting parties to a significant extent (Oxford University Press, 2012). Capacity The capacity of both natural and lawful persons verifies whether they might make compulsory amendments to their various obligations, duties and rights and other legal responsibilities. In other words, capacity is a characteristic of status and is defined as a personal law of the individuals (Chen & Wishart, n.d.). As observed in the case of “Barnes & Co v Toye” (1884), the idea of capacity in general is the ability to conclude a valid as well as a enforceable contract although a few of the major factors like lack of knowledge, understanding and maturity or any other such incapability may permit the contracting parties to discard or ignore a particular contract (Chen & Wishart, n.d.). Advice From the case study, it is apparent that the case relating with Frank and John is based upon “privity of contract”. It is due to the fact that in the case study there has been a written contract or agreement between Mrs Patel and Mr Jones regarding erecting of the aerial in the land of Mr. Jones for internet access and television reception. Moreover, this particular case study is based on “privity of contract” because the written contract between Mrs Patel and Mr Jones was made in such a situation where a benefit is likely to be presented to the third party i.e. Frank and John. Relating to the case study, after the death of Mrs Patel, Mr Jones violated the written contract or agreement in order to construct the aerial for internet access and television reception. In this regard, Frank & John may go to court and take any lawful measure against Mr Jones for making violation regarding the agreement to construct the aerial and can also impose certain obligations against Mr Jones. Since the contracting parties such as Mrs Patel and Mr Jones entered into a written contract or agreement, Frank and John have got the full authority to take Mr Jones into the court and take necessary legal steps against him for refusing the contract. Thus, it can be stated that Frank and John should go to the court and take lawful action against Mr Jones and there is a possible chance for Frank and John to win the case on their behalf as there was already a written agreement or contract made between Mrs Patel and Mr Jones. Frank’s 16 year aged son according to the case study is regarded as a minor i.e. a person who is less than 18 years of age. In the cases study, Frank is seriously concerned regarding the lawful capacity in various terms of different activities that would be performed by his son in his upcoming days. In this context, the law accepts or implements a greater defensive attitude towards children (Chen & Wishart, n.d.). According to the law, the fundamental rule is that the legal capacities of the minors in form of a contract are not obligatory on the minor unless the minor is ratified by himself. However, the legal capacities of the children are not void but enforceable. In the case study, Frank is concerned about his 16 year aged son regarding the legal capacity in terms of various activities such as making out loans, purchasing goods or starting to work and various other activities (Chen & Wishart, n.d.). In this connection, there are certain contracts which are designed regarding the lawful capacities in terms of various activities that include taking out loans and purchasing goods among others for 16 year aged son of Frank. The contracts relating with supplying necessaries, contracts involving loans and purchasing goods can allow the 16 year old son of Frank to get benefit from the above mentioned contracts (Chen & Wishart, n.d.). CASE 4 Commencement of a New Business under Contract Law Types of Contractual Agreement and their Importance to Businesses According to United Kingdom Company Law, there lie various categories of contractual agreements that include research contract, partnership, joint venture, license agreement, contract or sub contract, consulting agreement and limited partnership (Kulakowski & et. al., 2006). The importance of contractual agreements towards businesses lies in certain facts and information such as the contractual agreements provide a strong foundation or basis for the commencement of new business among the business partners. Moreover, the contractual agreements create probable chance to form any legal or court measures among the business partners while commencing a new business (Kulakowski & et. al., 2006). Contents of a Valid Agreement and the Law on Standard form Business Contracts As observed in the case study of “Foakes v Beer” (1884), the various contents of a valid contract or agreement necessitates that there must be a contract in all major conditions of the contract and there should be certain sort of consideration in which each party will establish certain obligations to the other party. Moreover, the other contents of a valid agreement include there must be a capacity or competence among the contracting parties for legally agreeing and fulfilling the contract and there lie a legal purpose of the contract which has to be established (Kulakowski & et. al., 2006). The law on standard form business contracts is one of the common characteristics of commercial relationships because it offers the benefit of lower transaction costs which raises competition between the business firms (Kulakowski & et. al., 2006). Terms of a Business Contract and Exclusion Clauses The agreements or the contracts regarding the transaction of services and commodities are fundamentally made between the consumers, organisations and other non-commercial bodies. In this regard, “Unfair Contract Terms Act” 1977 refers towards business such an agreement which includes a line of work along with the performance of any local or public authority (Kulakowski & et. al). The ‘Exclusion Clause’ of a business contract implies that it is totally upon the business individuals who negotiated with the business contract or agreement to judge upon the question regarding the terms of the agreement that are reasonable (Kulakowski & et. al., 2006). References Chen, M & Wishart, No Date. Contract Law. Incapacity. [Online] Available at: http://www.oup.com/uk/orc/bin/9780199570058/01student/01chapters/chenwishart3e_webchapters.pdf [Accessed February 28, 2012]. Dannemann, G., 2004. An Introduction to the English Law of Contract. Consideration: Definition. [Online] Available at: http://www.google.co.in/url?sa=t&rct=j&q=consists+of+certain+interest%2C+right%2C+benefit+or+profit+which+is+accrued+to+one+party+or+certain+damage%2C+tolerance%2C+loss+of+responsibility+given%2C+suffered+or+undertaken+by+the+other.&source=web&cd=2&ved=0CDIQFjAB&url=http%3A%2F%2Fwww.iuscomp.org%2Fgd%2Fcourses%2Fcnt04sli.doc&ei=6zxPT6jHF8XkmAWVk6S3Cg&usg=AFQjCNGk3dxxs5wQEkw0k_F2WkZg25YFMA&sig2=W3JaNiyHnYy-p0RdK3bUAQ [Accessed February 28, 2012]. Kulakowski, E. C & et. al., 2006. Research Administration and Management. Jones & Bartlett Learning. MacMillan, C & Stone, R., 2009. Elements of the Law of Contract. The Intention to Create Legal Relations. [Online] Available at: http://www.londoninternational.ac.uk/current_students/programme_resources/laws/subject_guides/law_contract/contract_chs1-4.pdf [Accessed February 28, 2012]. New Age International, No Date. Law of Contracts. Offer and Acceptance. [Online] Available at: http://www.newagepublishers.com/samplechapter/001048.pdf [Accessed February 28, 2012]. Oxford University Press, 2012. Contract I: Essential Features of a Contract. Consideration. [Online] Available at: http://www.oup.com/uk/orc/bin/9780199579464/marson_ch02.pdf [Accessed February 27, 2012]. United Nations, 2007. United Nations Convention on the Use of Electronic Communications in International Contracts. Sphere of Application. [Online] Available at: http://www.uncitral.org/pdf/english/texts/electcom/06-57452_Ebook.pdf [Accessed February 28, 2012]. University of London, 2012. Offer and Acceptance. Acceptance of the Offer. [Online] Available at: http://www.londoninternational.ac.uk/current_students/programme_resources/laws/subject_guides/law_contract/contract_ch2.pdf [Accessed February 28, 2012]. Read More