Dr Doe and Business Law - Essay Example

?Business Law Table of Contents Table of Contents 2 Question a 3 Question b 6 References 9 Question a The case scenario reveals that Dr. Doe (Doe) isa respected scientist who has won Nobel Prize for his contribution towards the development of effective drugs to be used in the treatment of common cold. Eventually, Doe sends a letter to Francis Stein (Stein), who is in the presidential designation of the Giant Drug Company. The president of the company initially made a counter-offer in response to the letter of Doe for the position of vice-president with a salary of $500,000 per annum, negotiating the remuneration to be reduced to $300,000 annually. Subsequently, the counter-offer by Stein was rejected by Doe. Later, Stein sent an acceptance letter to Doe agreeing with the terms mentioned in the offer initially made by Doe. However, within the gap, Doe had already accepted the offer of MARK Drugs to work as a research director in the company, which spares various reasons to disregard the contract as valid. According to the law of contract, acceptance and offer are quite essential to be made in a transparent manner, where the intention of both the parties, i.e. the offeror and the offeree must be informed as legitimate and viable. In accordance with the scenario, it can be observed that Doe (as the offeror) and Stein (as the offeree) have informed their offer as well as acceptance/non-acceptance through postal medium to create a legal relationship. As per the contract law, parties involved in agreements are required to be legally associated in order to execute duties legally, after a confirmed acceptance has been made voluntarily by the offeree1. However, in this case, Stein made no confirm acceptance of the offer made by Dr. Doe, which makes the contract void, as it does not support any legal obligation to exist between the two parties. In simple words, there was no acceptance made to the offer, which makes the contract void. Moreover, the law of contract is also seemed to be dependent on various factors, which are identified as essential under legal considerations so that agreements amid two parties are legally recognised. In this respect, in accordance with the case, Doe made an offer to be designated for the position of a vice president in the Giant Drug Company for a salary of $500,000. The feedback provided by the president of the company implies that the offer was accepted and it is valid. But, the president of the company made a counter-offer stating that the company will recruit Dr. Doe for the position of vice president with a salary of $300,000 per annum, which certainly cannot be regarded as an acceptance by law. Correspondingly, rejection of the original offer, as prescribed by Doe, was presented with a counter-offer, which signifies that the first original offer has become void and cannot be accepted in future. In a similar case of Hyde v Wrench [1840] 3 Beav 334, it was identified that Wrench made an offer to sell to Hyde a piece of land for a price of ?1,000. Hyde made a counter offer of ?950, which was later rejected. Subsequently, Hyde accepted the original offer but it was rejected. Consequently, the (proposed) contract amid Wrench and Hyde was identified to be invalid2. Hence, in the case of Dr. Doe and Stein, the offer can be identified as a mere invitation without any legal consideration and obligation. Apparently, there was no legal binding between the parties for the service-term and appointment of Doe in the company, which can further be argued with reference to the case of Gibson v Manchester City Council [1979] 1 All ER 972. In this case, a letter was provided to Mr. Gibson by the Manchester City Council to sell the house at a rate of $2,180. During the period, there was certain change in the policy of the Council and Mr. Gibson was refused with the proposal to purchase the house. It was later determined that the letter from the Council was a mere invitation, which signified that there was no contract between the parties3. In this case, however, an acceptance was made by Stein after his counter-offer was refused by Dr. Doe. Notably, the acceptance from Stein to Doe’s initial offer was made following the counter-offer and its refusal, which makes it a void contract. Also, the acceptance of Stein was made through postal form that again levies the postal rule to a valid acceptance of the offer. According to the case of Holwell Securities Ltd v Hughes [1974] 1 All ER 161, it was identified that receiving letter of acceptance after certain determined time is identified to be invalid4;5. To be precise, there are fundamentally three reasons as to regard the contract as void. At the onset, the counter-offer made by Stein to Doe resulted in the initial invitation for a contract by Doe void. Correspondingly, the counter-offer was also rejected by Doe (as an offeree) and hence, the counter invitation to a contract also became void. However, Stein had conveyed his positive response in respect to Doe’s initial invitation of being entitled to a remuneration package of $500,000 as the vice president of Giant after his proposal (as a counter-offer) was rejected. Nevertheless, as Stein’s acceptance came for the initial offer, which was already void owing to his counter-offer made to Doe, his acceptance conveyed through postal means can accordingly be justified as irrelevant to consider the contract as valid. Question b Assuming that there was a valid contract amid Doe and Stein, on the basis of which, Doe’s proposal for the post of a vice president has been accepted by Stein, the president of Giant Drug Company (Giant). Accordingly, Doe has accepted to work for MARK Drugs as a research director, due to its lucrative contracts. According to communication of acceptance, the main objective is to inform an offeror about the acceptance of offer, as there can be no contract amid two parties where the information in relation to acceptance of an offer is not communicated by the offeree or other authorised agents to the offeror. In the similar case of Powell v Lee (1908), it has been identified that communicating letter of acceptance and information to an offeror from unauthorised individuals, not assigned by the offeree, will lead to invalid contract6;7. The postal rule signifies that letter of acceptance should be properly addressed as well as stamped. Moreover, the postal rule reveals that on posting letter of acceptance implies that offer has been accepted so the letter may be considered to be valid8. In this case, the letter of acceptance has been properly addressed, stamped and sent by the president which made the contract valid. With the validity of the contract, Doe accepting the offer from MARK Drugs may lead to breach of contract, held with Stein. Under such circumstances, Doe can be prosecuted owing to the breach of contract by joining MARK Drugs irrespective of already being into contract with Giant on the basis of the same legal relationship. Correspondingly, the rule of anticipatory breach can be considered in this regard, which implies the incapability of an individual to execute his obligations as per the contractual agreement, as a major ground to advocate actions against breach of contract. As for an example, X has contracted Y to sell a car but he renounces the agreement or contract by selling the car to Z. Similarly, in this case, breach of contract amid Doe and Stein can be recognised as an anticipatory breach, as Doe has stated that he will be unable to join the Giant for accepting the offer made by MARK Drugs. In the case of Hochster v De La Tour (1853), it was identified that the defendant had initially agreed to appoint the claimant for a courier service. But, the defendant was later identified to repudiate the contract, which entitles the claimant to opt for legal proceedings on the grounds of breach of contract9;10. Thus, Stein has legal right to opt for legal proceedings owing to the damages, which will be caused for the breach of contract made by Doe. Contextually, there are certain legal effects that can be posed due to breach of contracts. Breach of contract will facilitate the injured party with the right or option to recover the damages suffered for renouncing agreement by the other party and his/her/their incapability to execute the required obligations as per the contract. Again, in case of serious consequences arising due to repudiation and breach, the injured party can avoid and end the contract in order to opt for legal proceedings for the damages caused. In this respect, with breach of contract, the injured party is entitled to acquire damages caused. In this regard, the fundamental rule is that the injured party is required to be compensated with the losses suffered due to the breach. Illustratively, in the case of Jarvis v Swans Tours Ltd (1973), it has been identified that due to breach of contract, the claimant was provided with certain monetary compensations, on courts order11;12. In this context, in accordance with the case scenario, Giant can obtain compensations for the monetary damages it had to incur owing to Doe’s acceptance of the offer made by MARK Drugs, in breach to the contract between him and Stein. However, Doe cannot be forced to join the Giant Drug Company as a counter measure to his breach. References 4LawSchool, 2012. Hochster v. De La Tour Case Brief. Contracts. [Online] Available at: http://www.4lawschool.com/contracts/de.shtml [Accessed September 03, 2013]. Beale, H. G., & et. al., 2007. Contract. Oxford University Press. Lawnix, 2013. Balfour v. Balfour – Case Brief Summary. Cases. [Online] Available at: http://www.lawnix.com/cases/balfour-balfour.html [Accessed September 03, 2013]. Lawmentor, 2013. Acceptance of an Offer. Glossary. [Online] Available at: http://www.lawmentor.co.uk/glossary/A/acceptance-of-an-offer/ [Accessed September 03, 2013]. Legalmax, 1979. Gibson v Manchester City Council. Contents. [Online] Available at: http://www.legalmax.info/members2/conbook/acknowle.htm#gibson_v.htm [Accessed September 03, 2013]. Legalmax, 1974. Holwell Securities Ltd v Hughes. Contents. [Online] Available at: http://www.legalmax.info/members2/conbook/acknowle.htm#holwell_.htm [Accessed September 03, 2013]. Legalmax, 1973. Jarvis v Swans Tours Ltd. Contents. [Online] Available at: http://www.legalmax.info/members2/conbook/acknowle.htm#jarvis_v.htm [Accessed September 03, 2013]. Mckendrick, E., 2012. Contract Law: Text, Cases, and Materials. Oxford University Press. Marsh, S. B., & Soulsby, J., 2002. Business Law. Nelson Thornes. Oxford University Press, No Date. Contract I: Essential Features of a Contract. Chapter 2. [Online] Available at: http://fds.oup.com/www.oup.com/pdf/13/9780199579464.pdf [Accessed September 03, 2013]. Wardhaugh, A., 2012. Hyde v Wrench (1840). Law. [Online] Available at: http://www.supplymanagement.com/law/court-reports/2011/classic-court-report-hyde-v-wrench-1840/ [Accessed September 03, 2013]. Read More