The Aspects of Contract Law in the United Kingdom - Assignment Example

Question One Charlie runs a car park, which has a sign at the entrance that announces hour. Charlie always sits at the entrance and issues parking tickets. Ernie enters the car park in his car and as he enters the park he shouts through the window I dont agree to your offer and wont pay anything. Ernie parks his car and leaves in it after two hours. An important query arises in contracts as to whether a machine like a vending machine or a car parking barrier represents an offer or an indication to treat. The legal position is that the offer is made by the owners of the machine by the act of keeping the machine ready for use. Acceptance is confirmed by the act of operating the machine by the customer, for instance by inserting coins or some such similar act. For a contract to exist there should be a person who makes an offer, who is called the offeror and a person who accepts it, this person is termed as the offeree. What is required is mutual assent or complete agreement regarding what is offered and what is accepted. In the absence of this requirement, there is no legally binding contract1. The offer has to be accepted in order to constitute a contract. Such acceptance should be in the manner prescribed or indicated by the offeror and it can be an expression by words or conduct assenting to the terms of the offer. Acceptance must correspond to the offer and the inclusion of new terms will render it a counter offer. When the communication is instantaneous like in person, fax, phone or e-mail the communication of offer and revocation of offer is effective from the moment of receipt by the offeree. Acceptance or rejection of the offer is effective when received by the offeror. In non-instantaneous communication, like by post or mail the rules change in respect of acceptance, which becomes effective only when sent or posted by the offeree. According it was held in R v. Clarke2 that acceptance must be made with knowledge of the offer. It is essential for revocation of an offer to be communicated to the offeree; this was the court’s opinion in Byrne v. Van Tienhoven3. In addition to a counter offer, rejection terminates an offer. Moreover, an offer expires if it remains unaccepted till its time of expiration. Revocation of an offer can be done by the offeror till such time as it has not been accepted by the offeree. Such revocation has to be made known to the offeree. An invitation to treat occurs whenever there is a suggestion from one person to another, whereby negotiations take place that could lead to formal trade. An invitation to treat is not legally binding with regard to the conditions of the invitation. An offer on the other hand is legally binding4. In Denton v. Great Northern Railway Company, an overt act was performed by the plaintiff on the good faith of a statement made by the defendants. To make a contract, which requires meeting a condition, binding there must be a communication of intention to accept the offer or there should be the performance of an overt action with regard to the contract. Merely performing an act in respect of a contract, in a secretive manner is not sufficient to make the contract binding5. Ernie entered the car park, despite knowing that there was a charge for parking the car in that place. This is evident from the fact that he refused to accept the offer made by the car park. This shows the communication of intent by Ernie to park his car in that place. This important concept was established in the case of Brogden v. Metropolitan Railway Company. In this case the plaintiff and the defendants had transacted for years and then the defendants had sent the draft of a contract for the supply of coal. Brogden inserted a clause, signed it to authenticate it and retransmitted it back to the Metropolitan Railway Company. It was held that there was a contract based on conduct, because after the draft had been returned by the plaintiff, trading continued as before6. Similarly, Ernie’s parking the car in car park indicates the formation of a contract on the basis of conduct. The conduct in this case was the act of entering the car park and parking his car. The principal case in respect of advertising is that of the Carlill v Carbolic Smoke Ball Company, wherein there had been a unilateral contract. In this case an advertisement had been placed in the media that was construed by the court to be an offer for doing a particular act. The offer specified an award if that act was performed. This particular offer had not been made to any specific person, nevertheless, it was opined by the court that any person who acted in accordance with that offer could be deemed to have accepted that offer and that as a consequence had entered a legally binding agreement with the Carbolic Smoke Ball Company7. The notice indicating the charges per hour for utilizing the parking space in the car park had been prominently displayed. Although, this notice did not specifically make this offer to any particular person, it could be construed that it was addressed to all the car drivers who entered the car park. Therefore, this offer could be considered to have been made to Ernie. The act of parking the car in the car park by Ernie connotes acceptance of the offer and in this manner a legally binding agreement has arisen between Ernie and the car park. In Saint John Tug Boat Co v. Irving Refinery Ltd, acceptance of the offer was not in the written form. Nevertheless, the court decided that the defendant had confirmed his acceptance by the manner in which he responded to the plaintiff’s offer. In this connection the court opined that if the offeree indulged in conduct that any reasonable person would construe to be acceptance of the offer made by the offeror, then irrespective of the offeree’s intention, it would be construed that the offeree had conveyed his acceptance. Hence, Ernie’s conduct will be construed to be acceptance, despite the fact that he has not made any written or verbal statement indicating acceptance. This is because his act of parking the car in the car park shows that he has accepted the offer made by the car park8. In the case of Thornton v. Shoe Lane Parking, Thornton had parked his car in a car park maintained by Shoe Lane Parking. He sustained an injury in the process. The defendant attempted to escape liability by stating that it was excluded from doing so because of the exclusion clause printed on the reverse of the parking ticket. In his judgment, Lord Denning held that the contract was formed at the time that Thornton had entered the car park. Therefore, the instructions on the reverse of the ticket, which had been issued to him subsequently, by the vending machine, were inapplicable9. Similarly, Ernie has formed the contract by entering the car park; moreover, the charges for parking were displayed at the entrance to the car park, which made him aware of the same prior to forming the contract. His subsequent, statement that he was disinclined to accept Charlie’s offer was therefore immaterial to the contract. A contract between the parking company or owner of the land and the driver of the car is formed when the car is driven into the car parking area. Ernie shouted out his refusal to accept the offer of parking a car for a pound an hour. Ernie entered the car park and left his car there. However, on the basis of the case law that has been discussed, it is evident that this is tantamount to acceptance of the offer. Therefore a legally binding agreement had been formed between the car park’s owner and Ernie. Accordingly, Ernie has to pay damages for breach of contract. Question Two Dasbach and Peter are well known opponents in a scientific matter of dispute. Dasbach advertizes in a national newspaper that he would pay a thousand pounds to anyone who could prove his theory to be false. Dasbach responds by sending Peter a document that purportedly disproves Dasbach’s theory and demands the £1000 from Dasbach. However, the latter contends that that Peter has not given the required proof. In Carlill v. Smoke Ball co, the defendant contented that their newspaper advertisement was for the general public and was therefore not a valid offer. However, the court held that it was a contract as the plaintiff had performed the terms of the offer10. Moreover, in this case there was no notification regarding the acceptance of the contract. The law requires that the acceptance of an offer should be conveyed to the offeror. This would help both the offeree and offeror to come to a consensus with regard to the contract. If there is no notification of acceptance, there would be no consensus between them. According to the English law consensus is a must to form a contract. Notification of acceptance is essential for the benefit of the offeror. However the person who makes the offer can dispense with notification of acceptance being conveyed to him11. The mode of acceptance has to be declared explicitly by the offeror and the offeree has to convey acceptance only in this manner. The acceptance can be either express or implied. When the offeree performs according to this condition it can be deemed that he had sufficiently accepted the contract12. If notification of acceptance was not held to be necessary by the person who makes the offer then the contract becomes binding on the parties. In many cases offers are self explanatory and describe the method of accepting the offer. The nature of the transaction sometimes makes it apparent that notification is not required. This is especially true of advertisement offers, where the mere following of instructions suffices to indicate acceptance. These offers do not require the person who begins the transaction to notify his acceptance of the offer. If a person performs certain conditions specified in the offer, then it can be construed that the contract had been formed. Here common sense plays a vital role. For instance, an advertisement to the public to find a lost dog and restore it to its owner for remuneration does not necessitate an agreement of consensus, which states that there is some person who is accepting the offer. If a person on seeing the advertisement started to search for the dog and then found it, then it can be construed that the condition specified in the contract had been fulfilled by that person. The crucial component of the contract is the act of finding the dog. This contract does not need a notification of acceptance but it is binding on the person who searched for and found the dog and the person who had advertised. The nature of the offer clearly denotes that performance of the condition will be sufficient acceptance and that it does not require a notification of the performance. Hence an advertisement for performing some act constitutes the offer and should be treated in the light of common sense. There is an implied condition in such instances that the offeror does not require notification of the acceptance of the offer. In cases involving advertisements, the offer is universal. However, any person who performs the condition specified in the offer need not make his acceptance known to the offeror. This is due to the fact that performance of the condition is adequate for the purpose of acceptance and it is not mandatory to notify the offeror in this regard. Peter produced a document, which according to him disproved Dasbach’s theory. This constitutes the acceptance of the offer made by Dasbach. If the court accepts that Peter’s proof is correct, then Dasbach has to pay the £ 1, 000 to Peter, since he has fulfilled the condition specified in the offer made by Dasbach. However, if the court does not accept that the proof produced by Peter is correct, then Dasbach is not liable to pay Peter anything, because Peter has failed to perform the condition specified in Dasbach’s offer. In Williams v. Carwardine, the defendant advertised to the effect that a reward would be given to any person who provided information that resulted in the arrest and conviction of a person suspected of having committed murder. The plaintiff had witnessed the murder and provided the required information. Her motive for doing so was that she had realized that her days were numbered due to illness13. The defendant refused to give her the reward, because her action had not been motivated by the reward but only by an attempt to come to terms with her conscience. The court opined that once an offer is accepted the result is a binding agreement in law, which is unaffected by the cause for acceptance. The offer was the advertisement and acceptance was the act of furnishing information by the plaintiff. This act of providing evidence, which resulted in the conviction of the murderer made the agreement legally binding. Accordingly, the court directed the defendant to pay the reward amount to the plaintiff14. The decision in this case clearly indicates the manner in which a legally binding contract transpires. In Gibbons v. Proctor it was held that knowledge of an offer was essential for granting a reward. At the time of providing the information called for the plaintiff was not aware of the existence of the offer of a reward for the same. Later on he came to know about the reward and this took place before this information reached the authority that was to bestow this reward. The court held that the plaintiff obtained knowledge of the reward, prior to the information being made available to the person making the offer, hence it was decided that the plaintiff was entitled to receive the reward15. Similarly, Peter produced the proof subsequent to acquiring knowledge about Dasbach’s offer. Therefore, the latter has to give him the amount promised. In Errington v. Errington, a father promised his son and daughter in law to give them a house, if they made the mortgage payments on it, which they commenced to do. After his death, the personal representatives of his estate attempted to rescind this agreement. The court held that there could be no revocation after the couple had commenced to pay the instalments16. This indicates that if a party commences performance on the basis of an offer, then there can be no revocation to the detriment of the offeree. Peter had deduced the refutation to Dasbach’s theory, pursuant to the latter’s offer. Therefore, Dasbach cannot revoke the offer, as this will be to the detriment of Peter. If Peter had arrived at the proof before Dasbach had placed the advertisement, then Dasbach is not required to pay Peter. This is due to the fact that knowledge of the offer is an essential requirement, in cases of advertisements, to form a legally binding contract. If Peter had worked on this proof before the offer had been made, then a legally binding contract will not ensue. Bibliography Brogden v. Metropolitan Railway Co (1877) 2 App Cas 666. Byrne v. Van Tienhoven (1880) 5 CPD 344. Carlill v. Carbolic Smoke Ball Co. (1892) 2 QB 484. Clark, John Owen Edward. Dictionary of International Business Terms. 2001. P. 176. Lessons Professional Publishing. Denton v. Great Northern Railway Company 5 E. & B. 860. Errington v. Errington (1952) 1 All ER 149. Gibbons v. Proctor (1891) 64 LT 594 Kelly, David and Hayward, Ruth. Business Law. 2005. P.118. Routledge Cavendish. R v. Clarke (1927) 40 CLR 227. Saint John Tugboat Co. v. Irving Refinery Ltd., [1964] S.C.R. 614. Thornton v. Shoe Lane Parking (1971) 1 All ER 686. Williams v. Carwardine (1833), 4B & Ad. 621, 110 E.R. 590 (K.B.). Read More