David Contract - Case Study Example

David Contract Contract refers to an agreement with precise terms between two or many people or groups in which there is an assurance to do something in return for a precious profit referred to as consideration. Law of the contract is one of the three or four most relevant sections of legal concern and can engage differences on complexities and circumstance since the law of contracts is at the center of nearly all business dealings. There are many types of contracts signed by individuals and companies (Cheeseman 48). These contracts include different process that must be followed in order for a contact to be fully executed. One of these processes is offer and acceptance. Offer and acceptance analysis refer to the ancient approach in contract law applied to decide whether an agreement exists among two groups or people. An offer refers to a sign by an individual to another of their readiness to contract on specific terms without further notice. Suppose there is express or implied agreement, a contract will then be formed. A contract exists when acceptance of an offer has been discussed by offeree to the offeror. A moment of formation when the parties are of the same mind is identified by the offer and acceptance formula that was developed in 19thC. Advancements in the law of estoppel, misrepresentation, unjust enrichment, and misleading conduct have deteriorated this classical approach to the formation of a contract (Cheeseman 74). Offer The nature of an offer An offer refers to an expression of readiness to contract on particular terms created with the purpose that it will turn out to be binding as soon as it is accepted by the individual to whom it is addressed to. In this explanation, the “expression” may take different forms like a letter, email, newspaper, fax and even conduct so long as it communicates the background on which the offeror is prepared to contract (Cheeseman 96). Cheeseman (124) asserts that, in this description, the ‘intention’ is judged impartially by the courts. It is emphasized by the English case of smith Vs. Hughes (1871) LR 6 QB 597 that the actual intention of the party in not the significant thing, but how a sensible person would view this circumstance. This is mainly because of common sense since every party will not wait to break his side of the contract suppose it will make him/her guilty to damages, it would particularly be opposing to the standard of confidence and lucidity in business contract and the subject of fault, and how it impacts the contract. The popular case of Carlill v. Carbolic Smoke Ball Company demonstrated the classical principles. Unilateral contract The contracted in the case of Carlill v. Carbolic Smoke Ball Company was of a type referred to as unilateral contract. This is a contract through which offeree agree to offer by executing his/her side of the bargain. It can be compared with a bilateral contract, where there is a swap of promises among the two parties. “It was held by the Australian high court in Australian Woollen Mills Pty v. The Commonwealth (1954) that the assurance must be made ‘in return for’ the doing of the act so as for a unilateral contract to emerge” (Cheeseman132). A conditional gift and a unilateral contract were differentiated by the court. The link between the needs of an offer and acceptance, deliberation and purpose to develop legal relations is demonstrated by this case. Invitation to treat According to Cheeseman (1629), an invitation to treat is a sign of an individual’s readiness to negotiate a contract, and not an offer. For instance, an indication by the owner of the possessions that he/she might be interested in selling at a specific price has been viewed in Harvey v Facey as an invitation to treat. The courts have been inclined to take a reliable approach to the recognition of invitations to treat, in contrast to offer and acceptance, in ordinary transactions. Regardless of whether it is in a shop window or on the shelves of a self-service store, the displays of goods for sale are treated commonly as an invitation to treat and not an offer. The holding of a public auction will also be viewed as an invitation to treat. Revocation of offer An offer can be revoked by an offeror before it is accepted; however, the revocation ought to be communicated to the offeree, but not essentially by the offeror. The revocation ought to take a form that is similar to the offer suppose the offer was made to the whole world like in the case of Carlill (Cheeseman 194). Nevertheless, if an offer had been summarized in an option, it may not be revoked. The contract maybe revoked any time suppose the offer is a unilateral offer unless there was a subsidiary contract entered into that assured that the main contract will not be withdrawn. Acceptance Test of acceptance Acceptance refers to the final and unqualified expression of acquiesce to the terms of an offer. Acceptance is not a defense of an action based on a contract for the defendant to declare that he did not indent to be bound by the agreement if it is shown at trial under all the circumstances that his conduct was such that it communicated to the second party(s) that the defendant had actually accepted (Cheeseman 213). One of the means through which a party can show its assent is by signing a contract. On the other hand, an offer can be accepted by the requested conduct other than a promise to do the act if it consists of an assurance to pay someone suppose the latter performs specific acts, which would be, done otherwise by the latter. Assent of the party to the terms of the offer are indicated objectively by the performance of the demanded act. The essential requirement is evidence that the parties had each from a purpose perspective engaged in conduct manifesting their concurrence. This expression of assent theory of contract formation might be compared with older theories through which it was disputed at times a contract needed two parties to have an actual meeting of the minds among the parties (Cheeseman 264). A party could decline an allege of breaching a contract under the meeting of the minds by proving that he had never actually indented to be bound even though it may have seemed impartially that he indented to be bound by the agreement. This is unacceptable since the other parties lack means of knowing hidden intentions and comprehensions of their counterparts. They can only act on what has been disclosed objectively by the party to be his intent. Thus, there is no need of an actual meeting of the minds. In cases where parties allege that an offer was declined, taking advantage of the other part’s performance, this need of an objective perspective will be significant. Under this circumstance, we can use the test of whether a sensible bystander would have recognized that the part has impliedly agreed to offer by conduct. Rules of acceptance Communication of acceptance There are numerous rules concerned with the communication of acceptance including: Silence cannot be interpreted as acceptance. You must accept an offer using a technique that is not less effective compared to the technique specified suppose a method of acceptance was specified by the offer. An offer can be accepted by the offeree alone. It may be used from the creation of the contract that the offer has given out with the need of communication from acceptance (Cheeseman 298). The acceptance ought to be communicated. The acceptance may not have to come until the announcement of the performance of the conditions in the offer depending on the structure of the contract however; it ought to be communicated. If another person accepts the offer on his behalf without his permission, the offer will not be bound. Correspondence with offer It is stated by the mirror image rule that an offeree ought to accept an offer precisely without modifications if you are to accept an offer. Modification of the offer in any way is a counter-offer and will kill the original offer. Nevertheless, a meager demand for information is not a count-offer. It might be probable to draft an inquiry in a manner that it adds to the terms of the contract whereas retaining the original offer alive (Cheeseman 313). Battle of the forms Two companies will normally use standard form contracts when they deal with each other during business. The question was raised in Butler Machine Tool Co Ltd v. Ex-Cell-O Corporation (England) Ltd [1979] WLR 401 as to which of the standard form contracts existed in the transaction (Cheeseman 369). Denning MR preferred the idea that the documents were to be placed into consideration as a whole, and the significant factor was finding the relevant document. On the other hand, Lawton and bridge LJJ preferred ancient offer-acceptance analysis, and placed into consideration that the last counter-offer killed all previous offers. Postal acceptance rule Suppose the offer is accepted by post, the contract exists as a rule of convenience at the moment that the acceptance was posted. This rule is only applicable when the parties have in consideration post as a means of acceptance impliedly and explicitly. It eliminates contracts engaging land, immediate modes of communication, and letters addressed incorrectly. Rejection, death or lapse of time The offer will be killed and cannot be accepted at a further date if the offeree rejects the offer. The offer will also be declined after the period of time specified in the offer, or if there were no specification of time, following a reasonable period of time (Cheeseman 372). The offeree may accept the offer in case the offeror dies under a condition that acceptance is performed without the knowledge of the death. On the other hand, an offer may not be accepted by the estate of a deceased offeree. Cancelling a contract Under the Consume Protection Act, 2002, an individual or a party have the right to cancel a contract and have his/her money back to him/her suppose: An agreement has not provided an offeree with information about the goods or services, or his/her rights as a consumer needed by the Consumer protection Act. The contract is a subject a cooling of period. An offeree has the complete right to cancel the contract for any reason within 10 days of receiving a written copy of the agreement (Cheeseman 411). The offeror has made a false, deceptive or ambiguous representation regarding the goods or services you agreed to lease or buy. Intention of legal consequences A contract needs that the parties plans to enter into a lawfully binding accord. This implies that the parties entering into the contract ought to plan to develop lawful relations and ought to comprehend that the agreement can be placed into effect by law. The purpose of making lawful relations is assumed hence, the contract is not supposed to state specifically that you comprehend and plan lawful repercussions to follow (Cheeseman 423). Suppose the contracting parties choose not to be lawfully bound, this ought to be highlighted clearly in the contract for it not to be lawfully or enforceable. Consideration A contract ought to be supported by precious considerations in order for it to be binding. This implies that one party guarantees to do something in return for a pledge from the other party to offer a profit of value (the consideration)( Cheeseman 456). Consideration is whatever each party offers to each other as the approved price for the other’s pledges. Normally, consideration is the payment of cash although it is not supposed to be; it can be anything valuable including the promise not to do something, or to desist from practicing some right. The payment is not necessarily supposed to be a fair payment. Unless fraud, force or unconscionable conduct is involved, the courts will not intervene in case where one party has made a hard bargain. When regarding the above scenario, David has no legal basis to withdraw his contract. This is because he was given an offer which he accepted and even agreed to the terms and conditions. Furthermore, he can not use his mental problems as an excuse because he signed a contract during lucid interval. However, he can only cancel the contract if the terms and conditions stated that the offeror will educate him or his company educate program upon signing the contract. But in absence of these terms, then David will not be able to cancel or withdraw the contract, and any attempt to cancel contract will be illegal. David’s incompetency cannot be a basis of dissolving a contract since it was not stated in the agreement, and that he signed the contract willingly. This is in accordance to will theories, which maintain that, promises are enforceable because the promisor has willed or decided to be bound by his promise. The law of the contract provides expression to and defends the will of the parties because the will is something intrinsically worthy of respect in accordance to the classical view (Cheeseman 434). In this regard, the application of force against a going back on promisor is ethically justified because the promisor him/herself has merited the application of force by him/her before exercise of will. Hence, a promisor cannot protest about force being applied against him/her because he/she meant that such force could be applied when she made the promise. Bibliography Cheeseman Henry. Essentials of Business & Online Commerce Law. New York: Prentice Hall PTR, 2007, 34-678. Print Read More