Foundations of the Legal Environment of Business - Case Study Example

 The revocation made by Glory Pieces on April 9 is not valid and did not act to revoke the offer previously made on April 1 because the offer assured the offeree 15 days within which to keep the offer open and that period has not yet lapsed as of April 9. Since the subject of the offer is the sale of goods, the applicable law is the Uniform Commercial Code (UCC), specifically § 2-205 which states in part that: An offer by a merchant to buy or sell goods in a signed record that by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time… The original offer meets all of the above requirements of irrevocability: it involves the buying and selling of goods; it is signed by the offeror, and; it gives assurance that it will be held open for a certain period. Being irrevocable, the original offer cannot be revoked before the lapse of the 15-day period promised by the offeror. Glory Pieces’ revocation, therefore, is not valid. There are two ways with which an acceptance that adds terms to or contradicts terms in the original offer: the ‘mirror image’ rule and the ‘battle of forms.’ The ‘mirror image’ rule is used in common law (Beatty & Samuelson 140) while the ‘battle of forms’ is prescribed in the UCC. As the present case involves sale of goods, § 2-207 of the UCC is applicable. The aforesaid provision states, to the effect, that if an offeree adds new terms to the offer, the said new terms become part of the contract and if he/she alters some terms, it is up to the court to determine the existence of a fair contract. In addition, the offeror could preclude the offeree from adding to or changing the terms of the contract by expressly limiting the terms to the original offer (Beatty & Samuelson 140). Under the UCC, the addition or change of terms does not reject the offer so long as the parties have reached a basic agreement but the added or changed terms are scrutinized as to whether they are material or if there was a prior limitation of the terms or if the offeror objects to them. If the added or changed term is material, it does not become part of the contract. Often, payment terms or conditions are considered non-material (Jennings 233). In the present case, the change of date of payment 5 days later from the original term is not very substantial and may substitute the 10-day period delivery payment of the original offer unless objected to by the offeror. The acceptance made by the offeree is, therefore, valid because it was made within the time frame specified by the offeror for the offer to stand notwithstanding the alteration in the date of payment. This is because the offer, by its terms, intended to make a contract and is definite and there was a meeting of the minds between the offeror and offeree on the material aspects of the offer (Beatty & Samuelson 137). B-1 A valid contract has been formed at the time the acceptance was communicated by Realty, Inc. to Jettison on October 18 although the letter of acceptance was received only by the latter on October 22 in accordance with the common law mailbox rule. Since the problem at hand partakes of a sale the subject of which is real estate, the applicable law is the common law which follows the mailbox rule. Under the mailbox rule, the acceptance of the offeree takes effect at the time his acceptance is dispatched to the offeror. This refers to the time when the letter of acceptance comes under the control of the Post Office, if the acceptance was made through mail as held in the case of Rhode Island Tool Co v US 130 Ct. Cl. 698 (1955). Although there was no express provision made by the offeror for the authorized means of the acceptance, it is understood that since the offer was made through mail that the acceptance should likewise be made in writing and through mail and also considering that the subject is real property which under the common law Statute of Frauds needs to be reduced in writing (Jennings 241). B-2 According to the Restatement (Second) of Contracts, a modification of the contract terms is binding if they are ‘fair and equitable’ because circumstances not known by either party during the negotiation of the contract arise which would render the terms unconscionable if the original is followed. This implies that the adjustment requested by JetKlean is valid since it miscalculated the extent of the servicing to be made on the jet skis. Under the common law, however, parties can modify the terms of an agreement subject to the giving of new consideration for the new agreement to be enforceable. The problem at hand involves a bilateral contract, an agreement in which both parties bound themselves to perform their respective obligations to fulfill it (Beatty & Samuelson 131). The implication of the agreeing of Jettison to increase the service fee is that there is, in effect, a new agreement viz. the paying of $4000 more, to which it must respond with a new consideration. The old consideration of servicing the 60 jet skis is not anymore an acceptable consideration since it is a pre-existing obligation which JetKlean, by the terms of the old agreement, is already obligated to do. To make the new agreement enforceable, viz. the payment of $4,000 more, Jettison, Inc. must agree to complete the servicing, cleaning and repairing of the 60 jet skis by Memorial Weekend. Works Cited Beatty, Jeffrey & Samuelson, Susan. Introduction to Business Law. Cengage Learning, 2009. Jennings, Marianne. Foundations of the Legal Environment of Business. Cengage Learning, 2008. Rhode Island Tool Co v US 130 Ct. Cl. 698 (1955). ‘Uniform Commercial Code- Article 2.’ Legal Information Institute. Cornell Law School. 2 November 2009. http://www.law.cornell.edu/ucc/2/ Read More