Legal Aspects of Business - Law of Contract - Assignment Example

Contract Law All agreements cannot be treated as contracts. To be specific, an agreement becomes a contract only if it has some distinguished features. To begin with, in simple term, “a contract is an agreement enforceable at law made between two or more persons by which rights are acquired by one or more to acts or forbearances on the part of other or others” (Anson, 2006, p.29). Obviously, the definition insists that an agreement must be enforceable by law in order to be valid. In the given case, no such legal relation has been made between John and Kathryn. This paper will analyze the specific features that make an agreement enforceable and what makes the deal in the given case void. The first and foremost thing essential for the formation of an agreement and then a contract is an offer. Offer indicates one’s willingness to do something or abstain from doing something with an intention to obtain the assent of the other. This proposal is meant for entering into a legally binding agreement. Acceptance means the approval of the other party to whom the offer has been made. In the given assignment, John is the ‘offeror’ and Kathryn is the acceptor. The offer of John to sell a brand I-Mobile for €300 was accepted by Kathryn though with certain changes in the actual offer. Another essential element of a valid agreement and contract is the proper communication regarding offer and acceptance. As Miller and Gentz (2010, 208) point out, two parties can enter into an agreement only through the communication of the proposal or offer and its acceptance. Such a proposal made by one party to the other is called an offer. Once the other party to whom the offer is given accepts it, it becomes a promise. Acceptance is the consent of the other party to the invitation of the first party to do something or abstain from doing something (ibid). An assent or consent to the offer is termed as an acceptance. To make the communication of offer and acceptance more meaningful, the parties in a contract must have agreed upon the subject matter of the contract in the same sense and in the same manner (ibid). A mere mental resolve on the part of the offeree to accept the offer does not amount to acceptance due to lack of manifestation of the intension to do so. There should be an oral or written communication between the offeror and the acceptor regarding the acceptance or denial of the same. Here, no such offer has been made by John to Kathryn. What John has made is just a statement that he is ready to sell his last year model mobile phone which worth €250. If Kathryn wanted to accept the offer, she should have informed John that she is accepting the offer. But what she has done is sent a cheque of €250 instead. Moreover, it is not a unilateral contract for Kathryn to perform her part without letting John to know her consent. An important case law regarding the communication of offer and acceptance is shown in Fitch v/s Snedakar (cited in Law of Contracts, n.d). According to this case, Snedaker made a general offer to the public that anyone who would find and return his lost dog would be rewarded. After a couple of days, Fitch found the dog and returned it to the original owner Snedaker in ignorance of the offer made by him. The verdict of the court was that Fitch would not be entitled to the reward. The reason was that Fitch did his part in ignorance of the offer made by the owner and so the offer has not been communicated to him. So, it was not acceptance and he cannot claim the reward offered by Snedaker (ibid). Another important case law is Felthouse v/s Bindley. The matter of this case was such that Felthouse offered to buy his nephew’s horse for €30 saying that if he no more heard about it he would consider the horse as his. His nephew did not write to him at all, instead informed his auctioneer who was selling his horse not to sell that particular horse as it had been sold to his uncle. The auctioneer accidentally sold the horse. The act of the auctioneer made the nephew angry and he sued against the auctioneer. However, the holding of the court was that no action can be taken against the auctioneer as the offer of Felthouse was not accepted by his cousin verbally or orally. In the case of communication by an indirect mode of communication such as post or email, an offer is complete as far as the acceptor is concerned when he or she puts it in a means of transmission. Here what happened is the acceptor failed to discern the statement from offeror and sent the cheque without letting the offeror know the acceptor’s assent. Kathryn should have mailed John regarding her consent and sent the cheque later on. If john had made a proper offer and Kathryn accepted it with good faith, they would have entered into a legally binding contract. For the enforcement of an agreement in the court, there should be clear evidence that such a contract has been made in front of some witnesses. Here, in the given case, this very important formality, that is the compliance of legal requirements in written format, has not been taken place. So there is no evidence available for Kathryn to sue John in the court of law. However, the general rule of law is that a mere oral communication is good enough for the formation of the contract and no written agreements are required in all the circumstances. Even then, it is not a legal point available for Kathryn to sue John as no communication of acceptance was taken place instantly. Another important point is that while John made the offer that he was willing to sell his brand I-Mobile for €300, instead of accepting the offer, Kathryn replied that she would accept the offer if the Price is €200. Here it is obvious that the offer was countered be Kathryn. So, the first offer has been made invalid by a counter offer. In the second case, John did not make an offer but stated that if Kathryn liked he would sell another piece for €250. Even if the counter offer of Kathryn is regarded as a new offer, John again counters it with a new price of €250. Thus, both the times the offers were countered and thus became void contacts. So, the acceptance of the offer by Kathryn does not amount to acceptance; and hence, these offers and acceptance do not form any contract in the strict sense of law. Even if Kathryn sues John regardless the counter offers both made to each other made, it will not stand in front of the court. Another law point that is favourable to John to defend himself is that the offer he made in the advertisement is not specific offer that aimed at Kathryn alone but to the general public. Being a person working in a shop, John has to deal with a good number of people. Since the offer is not specific, he will have to fix the deal with any of the customers who approach him and are ready to accept the offer instantly. Moreover, a declaration that a person is planning to do something gives no right of action to another. Such a declaration means that an offer will be made or invited only in future and not an offer made at once. An advertisement for a sale of something does not amount to an offer. If Kathryn was so particular with the mobile, she should have made a direct contact with Jon and fixed the deal. A well known case law regarding this context is shown in Harris v/s Nickerson (cited in Blackburn, 1873). An auctioneer advertised in the newspaper that a sale of used office furniture would be conducted. Seeing the advertisement on the newspaper, a broker came from a distant place to attend that auction. But meanwhile such an auction has been cancelled. Raging at this the broker sued against the auctioneer for losing his time and money. However, the verdict of the court was infavour of the auctioneer. The reason was that a declaration of intention to do something does not create a legally binding contract with those who acted upon this (ibid). While analyzing this case with all the available and relevant facts, nobody can find fault with John for what he did. He was a business man and acted as any other business man would do. It was the carelessness or ignorance of Kathryn regarding the formalities of a contract that forced her sues John. In total, Kathryn cannot sue John in a court for breach of contract as there was no valid contract between them. Unless and until there is a valid contract, no court and law recommends john for the specific performance of the deal. References Anson, W., 2006. Law of contract. In: PK. Goel, ed. Business Law for Managers, 2006-07 Ed. New Delhi: Dreamtech Press. Blackburn, J., 1873. Harris v Nickerson, [online] Available at: [accessed 20 March 2012]. Law of Contracts. n. d., Indianbizinfo.com. [online] Available at: [Accessed 20 March 2012]. Miller, RL & Jentz, GA., 2010. Contracts: Nature, classification, agreement, and consideration. In. Business Law Today: The Essentials. USA: Cengage Learning. Read More