Rule and Application in Business Law - Essay Example

Business Law By Presented to Business Law Rule An offer is a ment presented from one person to another with a willingness to enter into a contract with the other person. This contract is based on stated terms that are provided for in advance (Kelly 2011). These terms have to be in turn accepted by the other party to whom the offer is addressed before it can be considered complete. These offers can be made in different forms including oral or written documents. The offeree is the person to whom the offer is addressed and may respond by accepting of rejecting the offer. For an offer to be complete, the offeree must accept the terms with which the offer has been placed. Application Colins Computers (CC) made an offer to the general public that sought to invite them to subscribe to their computer maintenance services. It made this offer in writing through an advertisement that was placed in the local newspaper and on their website. Geoffs Gym (GG) is the offeree in this case owing to the fact that is spotted the advertisement and was interested in the services that Colin had to offer. It was in desperate need of the maintenance services that Colins Computers had to offer. The terms of the agreement were also clearly stated in the advertisement where they offered to service computers at a very competitive price of $1000.00 per month for 12 months. And if the new customers were to accept the offer promptly then they would reduce this monthly amount by $50. The terms of the offer also stated that in the event that a party was interested in their offer then they should communicate to the company directly through post, email or text before 8th June. These terms were put in place so that Colin Computers could schedule their plan of activities in advance. The reason for these terms was also very well stated. Rule An offer will only be valid if it is not vague and it is not an invitation to treat. An offer must be made in a very clear manner with certainty before it can be enforced by the courts. Vagueness is established when the terms that have been expressed in the offer are too vague. An invitation to treat is realized in the case of display of goods in a shop and advertisements. These needs to be distinguished from offers being that the courts will not regard them are valid. In the case of Pharmaceutical Society of Great Britain v Boots [1953] where the goods are displayed in a shop and it is intended that customers will enter the shop willingly and decide on what they want to buy. The contract in this case is not considered complete until the customer has indicated the article that they need from the shop. And even if the customers request is not received by the shopkeeper himself, it may be someone else who seeks to act on behalf of the shopkeeper. The offer is complete when the customer goes to the counter and seeks to purchase the item from the counter. Application The offer made by Colins Computers was completed when Geoffs Gym made a telephone call to the company directing them that they were interested in their services. According to GG, the offer is complete because they took the step of responding to CCs offer through mail and even going further to make a telephone call in advance, long before the deadline for response to the offer was due. Rule According to the law, an advertisement simply constitutes and invitation to treat and cannot thus be honored in a court of law. This is seen in the case of Patridge v Crittenden [1968] where P inserted an advertisement in the periodical named Cage and Aviary Birds under the general heading “Classified Advertisements”. It contained the words “....Bramblefinch cocks, bramblefinch hens 25s”. This was considered an offer for sale of a wild bird which is contrary to the Protection of Birds Act 1954 s.6 (1) and Sch.4. P argued that his advertisement merely constituted an invitation to treat and could not be termed as an offer in court. The appeal to have the conviction of unlawfully offering a wild bird for sale was accepted. Application CC may argue that their offer is null and void considering that it was made in the form of an advertisement that was never meant to be legally binding. This is because it may serve as being an invitation to treat when considered as a service that they were offering to other companies. This would make any offers that they make null and void before the court of law. In addition, they can also argue that that did not formally receive GGs response to their advertisement through the channels that they had specified in their offer. The telephone call that they received from CC can be argued to be invalid when considered under the nature of responses that they had specified from their respondents. Rule In the case of Fisher v Bell [1960] a shopkeeper who exposed an offensive weapon in his window claimed that it was not for sale even though it was placed in the display area. The shopkeeper had put a flick knife in his window with a ticket saying “ejector knife-4s”. He held that the knife was not offered for sale since there was an absence of any definition in the Restriction of Offensive Weapons Act, 1959, extending the meaning of that term. In this case, he held that the words he had stated must be given the meaning that would be attributed to them in the ordinary law of contract. Application GG had previously used the services of CC in the past and was one of their old customers. In their advertisement, CC had clearly stated that they would offer their services at less than $50 per month only if a new customer had responded to their advertisement. The offer would not be extended to their old customers. An in the event of any laws or Acts that governed the wording that they had used in their advertisement, it would thus have to be interpreted under the ordinary law of contract. In this case, CC can argue that it is not under any obligation to offer GG the discount of $50 because it is an already existing customer and that offer was only valid for new customers. Rule A unilateral offer is an offer which conditions attached to it. When an advertisement is presented to a person, it is not considered an offer in the court of law. But when that advertisement comes with certain conditions then it is considered an offer when the respondent completes the conditions that have been specified in the advertisement. According to Carlill v Carbolic Smokeball [1982] B was a manufacturer of medical preparation called the carbolic smoke ball designed to prevent the user from contracting flu. B placed an advertisement in the newspapers stating that he would provide a reward of $100 for anyone who contracted flu after using the Smokeball three times per day for two weeks according to the direction supplied by each ball. The advertisement also went on to state that $1000 had been deposited to an account with a named bank to show the sincerity of its offer. C purchased the balls and used them as directed but still contracted flu. B argued that its advertisement did not amount to a contractually binding promise as it was addressed to the world in general; it was too vague and was not limited by time. Contrary to this, the courts ruled that because the advertisement stated that $1000 had been lodged into an account at a bank was enough to depict that the statement of payment in case flu was contracted was not a joke. The offer ripened into a contract when a person fulfilled all the conditions that had been stated in the advertisement making it a unilateral offer. Application CC had stated various conditions in its advertisement that made its offer unilateral along certain lines. It had promised to give a discount of $50 if the customer was new. It had also promised to offer its services to any customer who had confirmed their acceptance by post, email or text by 8th June. It also stated that receiving a definite date from its customers was essential so that they could schedule their dates in advance. GG responded to all their requirements by sending a reply by post. They further called to inform them that a letter in response had been sent and even relayed a preferred commencement date through the same phone call. GG had met the required conditions that CC had set in their offer which made the advertisement legally binding. Rule A purported acceptance which does not mirror the terms of the offer us not an acceptance but a counter offer which negates the terms of the original offer. In the case of Hyde v Wrench [1840], the defendant on the 6th June offered in writing to sell his farm for $1000 but the plaintiff offered $950, which the defendant refused to accept on 27th June after consideration. On the 29th June, the plaintiff by letter agreed to give $1000 but the defendant did not respond though there had been no withdrawal of the first offer. The courts held that there was no binding contract because the claimants offer of $950 was considered a counter offer which negated the defendants original offer rendering it incapable of subsequent acceptance. Application GG has now claimed a breach of contract and wished to enforce the agreement and gain the monthly $50 reduction. CC can respond by stating that this was not their original offer because GG is not a new client and was thus not supposed to receive the $50 reduction. Hence by requesting the reduction GG had entered a counter offer which negates the original offer. CC may thus be allowed to respond to this offer in a manner that is so pleases. Rule An acceptance must generally be communicated to the offeror in order to complete the offer. In the case of Entores v Miles Far East Corp [1955] an English company and a Dutch Company in Amsterdam concluded a contract by means of the telex system of communication. An offer was sent by telex from England offering to pay GBP 239 a ton for 100 tons of Japanese cathodes and accepted by telex from Holland. Instantaneous communications held between parties is different from the rule about post. When post is used, the contract is only complete when the acceptance is received by the offeror and the contract is made at the place where the acceptance is received. A letter of acceptance takes effect whenever it is posted provided that it is reasonable for the offeree to have used post. This rule is held even when the letter sent gets lost in the mail. The communication of acceptance thus has several rules of exception including the postal rule that ensures that communication of acceptance is upheld even if the letter gets lost in the post office. This is seen in the case of Adams v Lindsell [1818] whereby the L challenged the decision that they had breached a contract for sale of wool in the plaintiffs (P). On September 2, 1827, L had written to P offering to sell some wool and asking for an answer “in course of post”. However, Ls letter was wrongly addressed and did not reach P until September 5 at which time P wrote to answer positively. This acceptance was received by post on September 9 at time at which they had however sold the wool to another person on September 8. The judge held that since the delay had been caused by L then they were liable for Ps losses. Where an offer is made by post, the acceptance takes effect on the exact day that the letter is posted. Application The offeror, who in this case is CC, did not receive the acceptance letter by post that GG states that it sent. Posting a letter often takes time before it reaches the recipient and is thus never an advisable means of communication. In this case however, it is reasonable for the offeree to have used post because the offer stated clearly the terms of the offer requiring that acceptance be sent through the post office. It can argue however that it did make a telephone call with an acceptance and an initial date of commencement to the company. This acceptance was made to the company and the contract made at the company where the acceptance is received. Conclusion In conclusion, when an offer requires that the acceptance be communicated through post then the acceptance becomes legally binding on the day that it is posted. As such, GG can maintain that there was a breach of contract and claim compensation from CC for the losses that they have incurred as a result. The offer stated by GG is however a counter offer because it does not comply with the previous conditions that had been set out by the original offer. GG has been a customer of CC and the offer for a reduction was only valid for new customers only. Hence CC may argue that it can offer maintenance of GGs computers at the price of $1,000.00 per month but is not obliged by their contract to offer the $50 reduction. Reference Kelly, D. et al., 2011. Business law 6th ed., Oxon: Routledge.  Read More