Peculiarities of the US Law - Essay Example

Us Law Essay In business agreements, it is generally presumed by courts that there is an intention to create legal relations unless the parties insert a clause that their agreement shall not be binding in law but shall be binding in honor only. For that commercial agreement, it shall be binding in law since there was no clause that it shall be binding in honor only. A contract is an agreement between two or more persons which is intended to create legally binding obligations. The word 'binding' is used for there are some contract which are valid but are not enforceable contract, certain basic requirements must be present. There must be an agreement based upon genuine consent of parties, supported by consideration and unable for a lawful object between competent parties. (Hussain, 2002) The following are rules of offer: An offer may be made to a specific person or to any member of a group of persons or to the world at large, but it can not form the basis of a contract until it has been accepted an ascertained person or group of persons. An offer may be made by word of mouth, in writing or by conduct and a person making an offer is called offeror and the person to whom the offer is made is called the offeree. An offer must be contemplate giving rise to legal consequences if accepted. The term of the offer must be certain and free from vagueness in expression. Every offer must be communicated; for a contract to arise, two parties must be of the same mind, and so it cannot be accepted by a person who does not know that it has been made. The offer cannot bind the other party without his consent and lastly, The offeror may attach any conditions to his offer, but must communicate them to the offeree, before they bind by his acceptance of the offer. For this case, the owner of happy acres made an offer to sell his property on March 15th to an interesting buyer. He offered to sell his property for $200,000, closing to take place 18 days of acceptance, time being of essence. The offeror added that if the offeree sent him a non refundable $4000, the offer would remain open for 30 days from the date thereof. This meant that if the offeree paid a non-refundable $4000, the offer would remain open for 30 days. The owner of Happyacres was told by a business acquaintance that he thought that would pay up to $275,000 for Happyacres on March 25th and he changed his mind and wrote a letter on March 26th. The offeror was actually revoking the original offer of March 15th. This revocation can not be more binding because it does not apply to the two rules of revocation. The rule of revocation states that, the revocation by post does not take effect until it is actually received by the offeree. The second rule of revocation stated that, where offeror promises orally or in writing to keep his offer open for a specified time, he is not bound by it. I.e. he can still revoke it at any time before the expiration of that time unless: The offer has already been accepted. The promise to keep the offer open is supported by consideration i.e. the offeree paid some money or money's worth to the offeror to keep his offer open for a specified period. The promise to keep the offer was made under seal. A promise under seal does not require consideration. (Hussain, 2002) For this case, the original offer cannot be revoked sine the offeree had accepted the original offer on March 24th when he mailed a check of 4,000 to the offeror. The acceptance is considered complete immediately the letter of acceptance is posted, even if it is lost or destroyed in the post so that it never arrived. As long as the offeree can prove that he posted the letter of acceptance, the court will enforce the contract. (Hussain, 2002) Even Though the acceptance of the original offer was received on 30th by the owner, the contract became binding when the acceptance was posted on March 24th. For this case, the owner of Happyacres has no right if revoking the original offer because it had been accepted by the offeree. An offer becomes effective when it reaches the offeree, not when the letter of offer is posted. For this case, the offeror revoked the original offer when he wrote to the buyer on March 25th hence the new offer would have become effective when it reached the offeree, not when the letter was posted. According to this case, the new offer and revocation was received on March 27th when the offeree had already accepted to the March 15th offer hence it would not be binding or enforceable in the Court of Law. A similar case studied is that of: Bryne v Van Tienhoven, 1880 On October 1, the dependant posted an offer to sell some goods to B in New York. B received the offer on the 11th and immediately telegraphed his acceptance. On 8th the dependant wrote to B, revoking his offer and this was received by B on 25th. Held that the revocation, though posted on 8th, was of no effect until it reached B on 25th and the contract was completed on 11th when he telegraphed his acceptance. (Hussain, 2002) Acceptance of offer by post becomes effective as soon as the acceptance is posted, while revocation takes effect when it is actually received by the offeree. Hence, in this case the contract was completed on March 24th when the offeree mailed a check to the owner of the Happyacres. On April 10th, the owner in a telephone conversation told the buyer that she would accept $250,000 if closing could take place on or before April 11. The Buyer reluctantly agreed to the owner's terms. This was not an offer even though the buyer reluctantly agreed to the owner's terms. This was a declaration of intention and a mere supply of information which must be distinguished from an offer. Declaration of intention is where a person expresses or declares his intention to do a thing or an act. It does not bind him to another person who suffers damage because he fails to carry out his intention despite the fact that someone relied on his declaration and acted on it. Mere supply of information is a mere statement to the lowest price at which a person will sell property or goods containing no implied condition to sell at that price to the person making such enquiry. The buyer even though reluctantly agreed to owners terms during the telephone conversation, he knew too well that the original offer was binding hence enforceable in the court of law because the contract was completed when he mailed his acceptance on March 24. Having mailed a check of $4,000 the offer remained open for 30 days hence when he tendered $200,000 on April 11th, it was still within the agreed time and the owner should have accepted the check. Consideration is an act of forbearance of one party, or a promise thereof, is the price for which the promise of the other is bought, and a promise thus given for valuable is enforced. One of the rules of consideration says that consideration must not be past meaning some past act or forbearance which took place before the promise was made. However there are exceptions to this rule that past consideration is no consideration when a debt, the payment of which is barred by statute of limitation, is reviewed by a fresh promise in writing and such promise forms a valuable consideration. (Hussain, 2002). For this case the owner of Happyacres called the creditor of an old debt which was barred by the statute of limitation and he ought to have revived this by a fresh promise in writing. Hence it is not binding thus not enforceable in the Court of Law. The creditor cannot sue the buyer because consideration must move from the promise. This means that unless he has been a party to a contract, and provided consideration to the promise. In other words, a stranger to consideration can not sue on the contract although made for his benefit. Hence, the creditor can not sue the buyer of the Happyacres even though he would benefit by being paid his due after the sale because he was not a party to the contract between the buyer and the owner of the Happyacres. Hussain, A. (2002): General Principles and Commercial Law, East African Educational Publishers, Nairobi. Read More