The Doctrine of Privity under the Contract Law - Essay Example

a) Under the English Law, a contract is an agreement which actually gives rise to certain rights and obligations when two parties enter into an agreement or a contract. It is critical to note that a written deed is often required in order to make an agreement however; it is not a strict requirement under the law as the verbal agreements can also become contracts under the law. (Stone). It is also important to note that there are certain requirements under which a contract can be enforceable at law. Three most important conditions under which the overall legality of a contract is judged are: 1. Offer 2. Acceptance 3. Consideration Considering the above three essential conditions, Natalie has made an offer to purchase the 40 boxes of Lemonade however, this offer was conditional based on the fact that Natalie has to get 15% discount against this purchase. However, a counter offer has also been made under which the BD has actually asked Natalie to keep the offer open and if she does, she will get 12 tall glasses also. Considering the above situation, it may be important to ascertain whether Natalie has accepted the offer made by BD. Under this situation, it is important to ascertain the acceptance of the offer and its communication in order to make a formal contract. The offer has been accepted by BD on 18th however, it reached to Natalie on 21st however, under contract law an offer is accepted once the letter of acceptance has been posted if postal acceptance is made. In Adams V Lindsell1 and Henthorn v Fraser2, court decided that an acceptance is complete as soon as the acceptance is posted. Under these conditions Natalie will have to perform her part of the contract and purchase the bottles of Lemonade according to the offer made by her. 2(B) One of the key issues in this case is to decide whether it’s an invitation to treat or an offer to the world which Cruisey Liners plc has made. Under the case law, the advertisement made by the companies is generally considered as an invitation to treat and as such they are not liable to contract on the terms mentioned in the advertisement. An invitation to treat is therefore considered as a willingness of the individuals to negotiate and enter into contract. It is also important to note that in order to become a binding contract, it is critical that the acceptance must be definite in nature. The lack of this therefore may not render a contract binding on other party. (Stone and Cunnington) It is however, important to make a distinction between the invitation to treat and an offer to the world. Under unilateral contract, one party to the contract makes a promise for a reward on the performance of certain act. When an offer is made to the world, its acceptance only occurs when the complete performance of the act is done. (Elliot and Quinn). Considering this, the case of Caroline may not require damages for the firm because she has not performed the act. However, in case of Stephen Spider, the same may not be the case as the acceptance of the offer has been made through the performance of the act. It also however, has to be decided as to whether the revocation of offer should be communicated through same channels or not. As a general rule however, the revocation of the offer has to be properly communicated through the same channels. Q#2 The doctrine of privity under the contract law outlines that the rights and obligations arising under the contract can only be imposed on the persons who are party to the contract. As such rights and obligations cannot be enforced on others who are explicitly or implicitly not part of the contract. (McKendrick) The doctrine of privity therefore is also critical under the current environment also as the same help to identify the rights and obligations of third parties under the contract. There are wide range of laws which are covered under the doctrine of Privity and are decided till today according to this doctrine. Issues such as trusts, estates, collaterals etc are still governed by the doctrine of privity. In Tweddle Vs Atkinson3 court clearly identified and set the rules for determining the rights and obligations of third parties to the contract and their overall role in the contract. Court ruled that third parties are not required to bear any burden on them not it can be imposed on them. This suggests that the doctrine of privity is critically important from the perspective of even today. 3) Under the case of Martin with MC, it is important to note that Martin has made a counter offer to MC which was subsequently accepted. When a counter offer is made, a new agreement arises and replaces the old one. However, it is also important to note that an offer under an old contract needs to be revoked in order to make a fresh contract. (Stone). Since Martin replaced some windows earlier and than demanded extra money therefore the earlier contract has to be terminated before a new one is formed. As such there are two contracts against a single consideration and since Martin has not revoked his earlier offer, he may be liable to perform the contract as per earlier contract’s terms and conditions. As for as the second offer is concerned, MC can actually claim that the contract was made under undue influence and the whole contract may be termed as null and void under the law. This may be based upon on the doctrine of inequality of bargaining power as MC was forced to come into second contract. In case of Tim, Martin’s offer was not conditional since its performance was not based upon the performance of Martin’s work with MC and subsequent receipt of funds from MC. Martin therefore will have to pay Tim the agreed amount as the contract was not conditional on anything. In case of Pamela, Martin may also not be entitled to receive the amount since he accepted Pamela’s offer to accept lesser amount. However, Martin can consider the issue of undue influence under which the contract was made and can than claim damages from Pamela. Contract under undue influence is considered as a contract under pressure and therefore in case of Pamela, Martin may take advantage of this provision in law. Bibliography Elliot, Catherine and Frances Quinn. Contract Law. London: Longman, 2003. McKendrick, Ewan. Contract Law: Text, Cases, and Materials. Oxford: Oxford University Press, 2010. Stone, Richard and Ralph Cunnington. text, cases and materials on contract law. London: Routledge-Cavendish, 2007. Stone, Richard. The Modern Law of Contract. London: Taylor & Francis, 2009. Read More