Problem-Solving - Assignment Example

Name: Lecturer’s Name: Paper Name: Date: In deciding this case one needs to identify if there was a valid contract among the parties. The likely outcome of this case is that the binding agreement was between John and Monica. The reason behind this is that for a valid contract to be in place, all elements of an agreement must be present so as to have an enforceable contract. The elements of a valid agreement are simply an offer and acceptance. According to law offer is invitation by an individual to another to buy or do something while acceptance is the act of taking another person’s offer1. An agreement is valid if one party makes an offer and the second party makes an acceptance to take the offer. Therefore, in this case John made an offer to Monica to sell an antique and he gave her time to think about the terms of the agreement. John’s offer was valid because it had the elements require to satisfy a valid offer which include the offer should be promissory, sufficiently complete, it should not be expired, intention to result into a contract if accepted and have to be addressed to a specific person or a group 2. All this elements were satisfied because John made an offer to Monica and promised to give her time to think about the terms of the agreement. By accepting this meant that Monica had already accepted the offer and had to look into the terms of the agreement again. This meant that they were in a contractual agreement and John could not sell the antique to any other person. Therefore, in deciding this case one needs assess if there was a promise between the parties involved. This is to decide whether this promise would have led to an agreement resulting to a contract. The promise is present that John could wait until Monica thinks about the terms of the agreement. This promise could have led to a valid contract between the two and, therefore, John was not in any position to enter into another agreement regarding the same antique he was selling to Monica. This could result to an illegal agreement which is an offence. Marks offer was invalid in that John’s offer to Monica was not expired and John had promised to wait on her to think about the terms of the agreement. Mark made the offer knowing that John had offered to sell the antique to Monica. This was clearly stated in their memorandum of sale. John informed Mark that he had to wait until he sought advice on any contractual ties between him and Monica. John seeking legal advice on any contractual agreements between him and Monica shows that John and Monica had an intention of entering into a contractual agreement as required by the law. This meant that the agreement between the two was valid and doing otherwise could lead to a breach of the agreement which had consequences. Intention to be legally binding is one of the elements that satisfy a valid contractual agreement3. The agreement between John and Mark cannot be contractual binding because Mark did not wait for John to give the feedback about any legal obligation he might be having with Monica. It is clear that Mark went ahead and drew a memorandum of sale while he was aware that John had made an offer to sell the antique to Monica. This shows that John was aware that there were elements that could lead to a contract in her dealings with Monica. The contract between Mark and John was invalid because it is Mark who made an offer to John and yet he did not own the antique. Mark wanted to rush and seal the deal and yet there was a condition put forward by John about their contractual obligation with Monica. John was aware that this could bring him problems because there was a contractual agreement between him and Monica. As they say ignorance of law has defence Mark could not defend himself because he was aware that there was an offer made to Monica to sell the same antique he was buying. The inclusion of the term about John’s agreement with Monica in the memorandum of sale shows clearly that Mark ignored the law. In this case the antique belonged to Monica who had an agreement with John about the sale of the antique. Promises are very strong in making a legal contract, for example, in the case of Wakeling v Ripley (1951) 51 SR (NSW) 183, Ripley, an elderly man who lived in a big house in Sydney. Wrote a letter, to his sister and her husband (Wakeling) who lived in England to come and live with him, in Sydney. He promised them that they will not pay any rent, and they will inherit his house. This led them to selling their house in Cambridge and left their jobs to reside in Sydney. A year later they disagreed, and he sold the property and excluded them on the will. The Wakeling’s saw this as a breach of contract and sued him4. The issue was, was promise to be considered as to make the agreement legally binding. The court decided that it was legally enforceable because the letters between the parties were clear that the plaintiff could not migrate until they had a legal bargain. Therefore, John’s promise to Monica that she will give her enough time to think about the terms of sale could be considered in making a legally binding contract. Question B. If the condition about John seeking legal advice about any contractual obligation he could be having with Monica was not included in the memorandum of sale the outcome would have different from the one above. The reason behind this is that there would have been a valid agreement between John and Mark. This is because Mark made an offer to buy an antique and John accepted the offer. For an agreement to be valid there must be an offer and acceptance of the offer. Mark made an offer which was accepted by John this makes a valid agreement. There also other elements which validate an agreement which are present in this case. The drawing of the memorandum of sale meant that the two parties were willing to enter into a legal binding agreement. In this case one could assume that Monica did not accept the offer as it was made by John and that is why she could not immediately accept the offer but had to think about the terms before accepting it. This can be treated as offer rejection and that is why John had to move on to sell the antique to Mark who was willing to pay for it. This means that John and Monica were not in any contractual agreement because she had not accepted the offer to buy the antique. It is stated in the case that there were negotiations between John and Monica which means Monica did not accept the price John had offered her. This could be treated as a counter offer which is rejection of the original offer. This could mean that John was not in any way in a contractual agreement with Monica. In a similar case of Henthorn v Fraser [1892]2 Ch 27, Fraser offered to sell a certain house to Henthorn for a sum of £750 million giving Henthorn 14 days to accept the offer. Henthorn accepted the offer a day after receiving it by posting a letter to Fraser. Fraser received a higher price and attempted to withdraw the offer from Henthorn after the acceptance letter was posted. He argued that acceptance by mail was not acceptable, and the offer could be withdrawn before its acceptance. The issue for the court was whether the offer was already accepted by Henthorn before Fraser tried to withdraw it. The court held that acceptance of an offer occurred immediately the letter was posted and this took place before Fraser tried to withdraw the offer. The court said that the law does not require acceptance by post be authorized, and it is, therefore, effective when the letter is posted. The contract was complete as soon as the acceptance letter was posted. Therefore, in this case without the clause that mentions Monica negotiation with John to sell her the antique, Monica could not have any claims of the antique whatsoever because she had not seen any acceptance of the offer made by John. On the other hand all the procedures of making a legal contract and agreement were satisfied because Mark made an offer to John who accepted it. The two parties went ahead to make it legal through writing a memorandum of sale which had all the terms of the sale. Therefore, in this case Mark could be the rightful owner of the antique after going through the right legal procedure of acquiring it. Works cited Goldman, A.J. and Sigismod, W. Business Law: Principles and Practice. Sydney: Cengage. 2010. Lambiris, M. (2012). First Principles of Business Law.Sydney CCH. 2012. Miller, C. and Cross, J. Business Law: Text and Cases 11th edition. Sydney: Cengage. 2004. Read More