First Principles of Business Law Interactive Tutorials - Assignment Example

Four Step Process Student’s Name Institution Part A Question 1. The issue that arises from the scenario is; whether Sally accepted Peter’s counter offer. As a rule, the offeree must communicate his/her acceptance to the offeror (Lambiris, 2012). It is not effective if it is uncommunicated. Consequently, a valid agreement cannot be said to exist between the persons concerned. If the offeror stipulates how the acceptance is to be communicated, this must be followed. The acceptance will not be effective if it does not follow these stipulations (Lambiris, 2012). These stipulations may be as to the form, time or means of communicating the acceptance. If the parties use instantaneous means of communication, then communication is considered effective when it is sent (Lambiris, 2012). The recipient will be considered to have received the communication the moment it is sent. Communication of acceptance electronically is governed by S. 13 of the Electronic Transactions (Victoria) Act (2000). It stipulates that acceptance is effective when an email of acceptance is sent. However, both parties should contemplate the use of emails. The recipient is deemed to have received the acceptance even when he/she has not read the email. The above rule was applied and upheld in the case of Brinkibon v Stahag Stahl. The message in question was sent by telex. The recipient did not receive it immediately. The contention was on whether the postal rule applied in cases of instant communication. The court stated that the rule is inapplicable in such cases. Communication was deemed to be effective after the telex was sent. This was the case even though the recipient did not receive the message instantaneously. The law allows a party to revoke an offer before it is accepted. Once acceptance has been effectively communicated, it cannot be revoked (Lambiris, 2012). The revocation should be communicated in accordance with the rules stipulated above. The revocation of an offer that has already been accepted is not effective. An effective revocation will therefore, depend on whether there was a valid acceptance. In the present scenario, Peter had stipulated how and when Sally was supposed to send her acceptance. Sally sent the email accepting Peter’s counter offer 15 minutes before the stated time lapsed. She, therefore, adhered to Peter’s stipulations. This is as far as time and means of communication apply. The parties corresponded via email. This was, therefore, their preferred means of communication. The law deems acceptance by email to be effective when the email is sent. For this reason, Sally’s email accepting Peter’s counter offer was effective. This is despite the fact that Peter did not read it until three days later. The conclusion is, therefore, that Sally accepted Peter’s counter offer. Peter purported to revoke his counter offer to Sally before the bicycle was delivered. However, the law does not allow one to revoke an offer once it has been accepted. Sally’s acceptance was effective. Therefore, an enforceable agreement existed between them from the moment the email was sent. Consequently, Peter’s “revocation” is ineffective. He has an obligation to receive the bicycle and pay for it. Sally has a right to enforce these obligations against Peter. Burt, on the other hand, rejected Sally’s counter offer. Sally had not stipulated time within which the offer was to be accepted. The fact that he did not respond until the following day at 4pm does not invalidate his rejection. A rejection of an offer is sufficient to terminate it. Burt’s rejection of Sally’s counter offer was effective the moment he sent the email. Therefore, there is no agreement that exists between them. Burt does not have an obligation to receive or pay for the bicycle. Question 2. The issue to be considered in this scenario is what terms were agreed upon by the parties.When parties enter a contract, they agree on the terms that govern their agreement. These terms can amount to either a condition or warranty. A condition is a term that is essential to the contract (Lambiris, 2012). It goes it its root. If it is not satisfied, the contract may not make sense anymore. In many cases, conditional terms induce one to enter the contract. They may be the only reasons why one enters a contract. A warranty on the other hand, does not go to the root of the agreement. The consequences of its breach are less serious (Lambiris, 2012). The violation of a warranty may not change the contract fundamentally. Terms may not be very clear, especially when the parties exchange a series of correspondences. In such a case, the law stipulates that the whole agreement should be looked at to establish the terms. This position was stated in the case of Maxitherm Boilers Pty Ltd v Pacific Dunlop Ltd. A series of communications had passed between the parties in this case. The term, therefore, could not be clearly established. Court stated that the whole communication should be scrutinized to establish the terms agreed upon. For a statement to be considered a condition, the parties must be aware of it before concluding the contract. A term will not bind a party if it is unknown at the time of contracting. An exemption clause must be a part of the contract to be effective. The other party should have notice of its existence before forming the contract. This is the opinion that the court voiced in the case of Olley V Marlborough Court Ltd. The exclusion clause was held not to constitute a part of the contract. This is because it was not known by the hotel’s guests before they booked their room. In the case study provided, there are various statements that amount to conditions. The advertisement stated that the model of the bicycle was a Cadel Evans “GF”. If the model that is delivered is different, then the contract ceases to exist. The model goes to the root of the contract. It is, therefore, a conditional term of the contract. The bicycle was also said to be “restored and refurbished”. This is also a conditional term. This is because this statement assures the buyer that it will be in a usable condition. If this turns out to be untrue, the buyer will not be able to use it. When Peter enquired about what being restored meant, he was told that the gears had been refurbished. This is a conditional term. This is because the bicycle is useless if the gears do not work properly. The statements that present the bicycle as in good condition are conditional terms. The bicycle in question is a second hand machine. This being the case, the buyer needs assurance that it has been repaired and is in good condition. Peter wanted a bicycle he could use immediately it was delivered. It was, therefore, essential that the bicycle be in good condition. He was going to use it for his work and to go to school. Comfort was, therefore, essential. By delivering a bicycle with an uncomfortable seat, Sally violated a conditional term. The bicycle had been advertised as having a dashing green colour. However, the bicycle that Peter received was of a different shade of green. He also found out that the bicycle was not a “joy to ride”. The advertisement had stated that it would be a “joy to ride”. Peter had considered all these statements before he made his counter offer. These statements do not amount to conditional terms. A different shade of green does not make the bicycle fundamentally different. This would be the case if the model was different. However, the colour does not prevent Peter from using the bike as he intended. The colour would be a condition in certain circumstances. For example, if Peter’s work required the use of a bike painted in dashing green colour. The contract was in this case, not significantly altered by the change in colour. The statement that riding the bicycle would be a joy is also not a conditional term. The exemption clause appeared in the document just before the signing clause. It would, therefore, be argued to have come to Peter’s notice before the contract was formed. However, a contract already existed the moment Sally accepted Peter’s counter offer. This clause was not known to Peter before he made the counter offer. It was, therefore, not within his knowledge before the contract was formed. For this reason, the clause did not form part of the contract that Sally and Peter entered into. It was not a term of that contract. Part B In the course of their work, judges have to interpret many Acts of parliament. Interpreting a statute correctly is essential to their functions as judicial officers. Gross injustice can result from an incorrect interpretation of legislation. Judges are guided by a set of rules and principles when interpreting statutes. As a rule, judges should restrict themselves to the wording in the statute when interpreting it. This is usually the case when applying the literal rule to interpret legislation. This rule restricts judges to the literal or plain meaning of words used in the statute. However, there are instances when judges look outside the statute for guidance. Judges will look outside the Act a literal interpretation of the words result in an absurdity. In such a situation, a judge will seek the true intention of parliament. A judge may also focus on the “mischief” that parliament sought to regulate. When general words follow specific words in a statute, the ejusdem generis rule may be applied. The judge will derive the meaning of general words from the specific ones (Lambiris, 201 Judges consult both intrinsic and extrinsic evidence when interpreting statutes. Intrinsic evidence is information that judges obtain from within the Act. An example is a list of definitions contained in the definition section. Another example is information contained in the long and short titles of an Act of parliament. Extrinsic evidence comes from sources outside the Act. These sources must be related to the Act. They should assist the judge to make a rational interpretation. An example of such a source is the Hansard (Lambiris, 2012). Judges are allowed to look outside the Act for information that may assist them to interpret a statute. The Interpretation Act, however, limits the exercise of these rights. This can only be done if finding the intention of parliament is necessary. The documents that can be referred to are listed. These are; the Hansard, reports of special committees and other parliamentary records (Lambiris, 2012). These are records containing debates in parliament when the law was being made. Reference Lambiris, M. (2012). First Principles of Business Law Interactive Tutorials and Source Book. Sydney: CCH. Read More