The Law of Contract - Coursework Example

The Law of Contract (a) Beryl is en d to be paid J50 cash, because there is a contract that exists between Beryl and Pricelash. In order fora valid contract to exist, there must be an offer made and an acceptance of the offer. Normally an advertisement would not constitute an offer, it would merely be regarded as an invitation to treat.*1 It is then up to the customer to demonstrate his interest and made an offer to buy the goods that are being offered for sale. If a mere advertisement is construed to be an offer then it would place an obligation upon the vendor to supply the goods to everyone who accepts the offer, even when he runs out of stock*2. However, in this instance, Pricelash has not merely placed an advertisement, they have also indicated a specific reward for the first three customers at the shop. In the case of Chapleton v Barry (UDC)*3, deck chairs had been advertised for a particular price and that was construed to constitute an offer. When a specific reward is offered for the performance of some deed, then it could be deemed to be a legitimate offer. For example in the case of Carlill v Carbolic Smoke Ball Co (1893), a specific reward was offered for certain performance and therefore this was deemed to be an offer under contract. In Beryl’s case, Pricelash has offered a reward for a particular performance and its intention to enter into legal relations is made clear by the fact that it expects to receive some benefit out of the offer that it has made. In order for a contract to exist, there must also be an acceptance of the offer that has been made. When a particular offer requires the offeree to indicate acceptance of the offer through a particular action or deed, and if an offeree executes the action required, he/she would be deemed to have accepted the contract. The exchange between two parties is based upon the principle of “consideration” which Stone defines as “what one party to an agreement is giving, or promising in exchange for what is being given or promised from the other side.”*9 Without a definite sign of acceptance, contracts cannot be valid; “silence cannot be regarded as evidence of acceptance when this would involve forcing a contract upon an unwilling party.”*10 In Beryl’s case, Pricelash which is one party is promising to give J50 in exchange for Beryl’s being among the first three customers at the store. The terms of the original offer do not state that beryl is obliged to purchase anything from the store in order to receive her J50, rather it merely states that the first three customers will receive J50 and Beryl was one of the first three customers, therefore by fulfilling the required actions, Beryl has indicated her acceptance of the contract. A customer who is silent and does not appear at the store would could not claim a contract since he/she did not perform the terms that were laid out in the original offer. Although contracts are generally bilateral and are executed between two separate parties, Pricelash’s offer would constitute a unilateral contract. In a bilateral contract, acceptance would be through a communication of that acceptance, agreeing to the terms that have been offered. However, the offer made by Pricelash has not been made with a particular party, rather it qualifies as an offer that Pricelash has made to the world at large and since only one party is involved in making the original offer, this is said to be a unilateral contract. Acceptance to a unilateral contract is signified by a performance of the stipulated terms within the offer. According to I.M. Wormser, the justification for fixing acceptance to a unilateral contract upon completed performance of the stipulated terms is based upon symmetry*6. In other words, there is no obligation upon the offerer, neither is there any obligation upon the offeree unless and until the stipulated terms of the terms have been completed. An offeree need not perform the stipulated terms, in which case no contract exists. However if the offeree does perform the stipulated terms, then it is only reasonable to accept, that the offeror must abide with the terms of his original offer. Therefore, since Beryl has performed the terms that have been stipulated in the original offer, i.e, she has presented herself as the first customer as stipulated, this would constitute an acceptance and a valid contract would be deemed to exist. A general principle that ahs been set out is that once an offeree has begun the performance of the terms stipulated in the offer, then there is an obligation on the part of the offeror not to revoke the terms of the offer.*7 Moreover, it may be noted that the offer that Pricelash is not conditional upon any purchases being made, rather the original offer merely required that a person accepting the terms should be among the first three persons at the store. Since no such conditions for purchase have been laid out and Beryl has already commenced and completed the performance of the terms of the offer by being among the first at the shop, Pricelash cannot now withdraw or change the offer. Bilateral contracts offer the facility of the counter offer, where the original terms may not be acceptable to the other party that responds with an offer of its own. However in the case of a unilateral contract, an offer that has been made can also be revoked, provided that the offer is not revoked once the performance of it has started. For example in the case of Errington v Errington*8, an offer made by the father to give the house to his son and daughter in law of they paid of the mortgage was deemed to be irrevocable upon his death, since the son had already commenced payments. Applying the same criteria, it may be noted that Beryl has already commenced and completed the terms of the original offer when she arrived at the store. The notice on the door of Pricelash changing the terms of the original offer will be untenable under the law of contract, since the revocation of the original offer was not communicated to the offerees before they had commenced on the performance of the terms stipulated in the original contract. The new terms of the offer now require Beryl to make a purchase in order to claim the J50, but after she has completed the terms stipulated in the original offer. If the change in terms of the offer had been communicated to Beryl before she had started out on execution of the stipulated terms, it would have been a valid revocation. The time factor is very important in contract because an offer under a unilateral contract, if revoked, must be executed before the performance of the terms of the offer. Pricelash changing the terms of the offer after the terms have been completed would constitute unfair terms, it has been constituted after formation of the contract and is therefore ineffective.*9 Moreover, the contract is also valid under the premise of creating legal relations, since the promotion of market transactions as in the case of pricelash would be deemed as a presumption in favor of the intention to create legal relations in view of anticipated gains. Therefore, since this is a unilateral contract and an offer has been made which has been acceptance through a performance of the terms of the offer, a valid contract exists. (b) The remedy that would be available to beryl would be a breach of contract on the basis of promissory estoppel. A unilateral contract is a promise for a particular act. Therefore if that promise is breached, Beryl can claim recoveries for her wasted expenditure and time in fulfilling the terms of the offer and the loss of expectation of receiving the sum of J50 in cash. A unilateral contract implies Beryl’s reliance upon Pricelash’s representation, therefore if Pricelash has failed to conform to the terms of its representation, it would be liable to pay beryl’s wasted expenditure and compensate her for her loss of expectation by paying up the sum that it has promised to pay. For example, in the case of Morrison Shipping Co Ltd v The Crown (1925), Viscount Haldane held that “when work is done and expense incurred on the faith of a conditional promise, the promisor comes under an implied obligation not to revoke his promise and if he does so, may be sued for damages….”*10 (c) (i) The answer to Part A would be no different if Beryl was 27 years old instead of being a senior citizen. Pricelash’s unilateral contract offer has been made to the world at large, therefore anyone who fulfils the terms stipulated on the offer will be deemed to have a laid contract with Pricelash since there has been an offer and an acceptance in the expectation of mutual gain on the part of both parties. If Pricelash had fulfilled the terms of its original offer and had paid up the J50, there is always the possibility that Beryl may have done some shopping at the store, thereby satisfying Pricelash’s motivations in making the original offer. (c) (ii) If Pricelash had placed another advertisement the previous night in the Sentinel but Beryl had not seen it, then Pricelash would have had some grounds to dispute the need to pay Beryl the sum of J50 and could have insisted that she go for the vouchers instead. Although an original offer for cash had been made, it could have been revoked by Pricelash revoking or modifying the terms of offer before the actual performance of the terms of the offer had begun. Since the previous day would have been before actual performance, Pricelash would be deemed to have fulfilled its part by clarifying that its original proposal had been modified. In fact, Pricelash could have inserted this notice anytime before the specified period and it would be a valid revocation. If this had been a commercial transaction between two parties, the existence of regular office hours would have dictated that the revocation of the offer be communicated to the other party before 5 PM of the last working day. But in the case of Pricelash’s unilateral contract, it would have fulfilled its obligations on revocation by placing the advertisement the previous day. Since this is a unilateral contract, Pricelash cannot be expected to ensure that every party that has seen the original offer is informed about the modification to the original offer. Therefore it would be up to Beryl to read the paper and acquaint herself with the terms of the revised offer. However since pricelash did not do this, Beryl had no way of knowing that the original offer was modified until she had already completed the terms of the original offer. Bibliography * Chapleton v Barry (UDC) (1940) 1 KB 532 * Daulia Ltd v Four Millbank Nominees Ltd and Anor (1978) 1 ch 23 * Errington v Errington (1952) 1 KB 290 * Halson R, 2001. Contract Law. Longman: 154 * Morrison Shipping Co Ltd v The Crown (1925) 16 at 287 * Patridge v Crittenden (1968) 1 WLR 1204 QB at 1209-10 * Stone, R, 2003. Modern law of Contract, 5th edn. Cavendish Publishing: 74. * Spencer v Harding (1870) LR 5 CP 561 * Wormser, I.M., The true conception of unilateral contracts. (1916) 26 Yale LJ 136 Read More