Colins Computers Business - Case Study Example

Business Law Table of Contents Introduction 3 Case Law 4 Discussion 8 Conclusion 10 References 11 Introduction Colin’s Computers (CC) advertised through the newspaper and websites to render computer maintenance services at the competitive expense of £1000.00 per month for 12 months. Through this advertisement, CC also offers that those customers promptly accepting the offer shall be provided with services at a reduced amount by £ 50. Additionally, CC stated that local company and also new customers willing to avail the services can contact them by post, email or text by 8th of June explicitly stating their preferred commencement date of the contract. After viewing the advertisement, Geoff’s Gym (GG) posted a reply to CC on 3rd June agreeing with CC’s offer and being in desperate need of such assisting services. Additionally, GG posted a letter confirming a start date mentioning the same during the telephone conversation with CC after sending the post. However, after being charged, CC rejects to have received any letter from GG, in response to its advertisement. However, as a consequence, GG had to suffer from slow functioning of its computer, increasing financial losses faced by the company. Hence, GG charged CC with a ‘breach of contract’. Contextually, GG wishes to enforce the agreement and gain the monthly reduction of £50 upon the services rendered by CC as promised in its offer. Based on this case scenario, the study will aim at suggesting consequent remedies to both CC and GG to counter the problems in their contract with an in-depth understanding of contract law. Case Law The case postulated above deals with the issue of ‘offer’ and ‘acceptance’ as per the Contract Law. In order to make any recommendation to CC and GG in this context, it is crucial to understand the basic rules and its implications related with the ‘law of contract’. Rule According to the law of contract, offer is the manifestation which is intended to be contractually assured upon acceptance. An offer creates a power in the ‘offeree’ to form a contract through appropriate acceptances. In other words, an offer is a statement wherein one party reveals his/her willingness to enter into a contract on the prescribed terms and conditions. It is equally important that offer may be made orally, in writing or by conduct. However, there exist differences between an ‘offer’ and ‘invitation’ in the form that an invitation can be associated with display of goods in shop and advertisement which do not explicitly mention the sellers intention to market the products in exchange of money. Additionally, a contract needs the engaged but of an offeror and offeree (Kronman, 1980). Application With reference to the case, it becomes clear that CC makes offer to local companies and new customers. Contextually, CC is the ‘offeror’ while GG, being a customer, is the ‘offeree’. Rule According to the case of Dickinson v Dodds [1876], where there is a time limit imposed, an offeror can be revoked before the ending of the time limit, but unless it is accepted. Similarly, the case of Routledge v Grant (1828) also postulated that offeror can withdraw the offer at any situation prior to acceptance, before the deadline has not been expired (Lawnix, 2012). Application Apparently, it can be viewed from the case that CC prescribes its offer based on the certain specific time where it affirms that all those willing to accept the offerer should contact by 8th June. Rule It is also important to postulate that offer does not remain as an ‘offer’, if it is terminated or time stated by offeror is lapsed without any acceptance. Referring to the case of Mountford v Scott [1975], it can be identified that offer can be binding if it is enforced as a separate contract (Cavendish, 2006). Application In relation to the case engaging CC and GG, it has been illustrated that there has not been a separate contract to keep CC’s offer as an ‘open event’ by 8th June, i.e. its lapsing date; thus, CC has the right to revoke the offer after 8 June and any acceptance from the ‘offeree’ after the mentioned date will not bind CC for any of its promise of offer considerations. Rule An ‘acceptance’ is an unqualified manifestation of approval to the terms proposed by the offeror. An ‘unsupported acceptance’, which does not coincide with the terms and conditions of the offeror, cannot be termed as acceptance; rather such acceptance can be viewed as a counter offer that destroy the actual offer as postulated in the case of Hyde v Wrench [1840] (Cavendish, 2006). Application Apparently, in the case, CC makes an offer wherein it was clearly stated that customers who shall contact and accept the offer promptly within 8 June, shall be provided with reductions in the amount of monthly tariff charged by £50. Hence, GG after sending a post stating his acceptance to the offer, immediately contacts CC through telephone conversation, confirming the date of commencement. However, because CC does not receive the letter of confirmation, it restricts from implementing the offer into practice. Thus, in such circumstances, if GG intends to enforce the agreement and gain the monthly reduction of £50, it can be simply viewed as a counter offer where it shall be the sole decision of CC to accept the counter offer or reject it. Rule It is essential to identify the rule about the communication of acceptance. In the case of Entores V Miles Far East Corp (1955), it was argued that acceptance should be communicated to the offeror. It is further been illustrated in the case of Adams v Lindsell [1818] admitting that the most reasonable way for offeree to communicate acceptance is by post, so that the postal rule will also be applicable against the party in causing the ‘breach of contract’ hassles to the offeror (Cavendish, 2006). Application As per the case, it is apparent that GG had posted a confirmation letter on 3rd June i.e. prior to the determined date of revocation (8th June). Contextually, it provides evidence that GG has accepted the offer and has communicated through telephone conversation as well as by post. On the part of GG, they have duly communicated the acceptance, but because CC does not receive the post sent by the GG even after the lapse of the due date, the contract can be termed as void. As on the part of CC, GG did not accept the offer due to which CC fails to render the computer service to GG. However, the letter of confirmation was never delivered to CC. Therefore, it can be stated that acceptance will not take place when the latter of confirmation was actually posted. Contextually, the acceptance will only be believed to be undertaken when the acceptance from GG is communicated to CC, and as it was never commenced, the contract can be deemed as void lawfully. Rule The general rule related with revocation in the contract law, as per the case of Byrne v Van Tienhoven [1880], revocation must be duly brought into the attention of the offeree. However, according to the case of Dickinson v Dodds [1876], it is not necessary that revocation should be bought into the attention by the offerer; instead, offeree’s attention by third party can also be established (Lawnix, 2012; Cavendish, 2006). Application Apparently in the case there was only offer from CC to GG but there was no acceptance between the two, due to lack of proper communication. Therefore, it can be stated that CC does not possess any duty to convey about revocation. Discussion From the above discussion, it can be identified that offer and other terms of a contract essentially, needs to be clear and unambiguous. Furthermore, in order to establish a contract, it is essential that there must be a product or a service for offering and accepting. It is equally important that acceptance of offer by the offeree is duly communicated to the offerer reasonably by explicit verbal means, i.e. through post or through conversation. This is because it will result in the applicability of postal rules on the offeror that can serve as the evidence during the course of ‘breach of contract’. Contextually, the letter of confirmation that was posted by GG never arrived to CC which implies that there was no acceptance of offer made in the contract. In this case, it can be stated that neither of the parties involved in the offer and acceptance were responsible for the ‘breach of contract’ (Bebchuk & Shavell, 1991). However, GG has the right to sue CC against the charges of breach of contract and seek compensation for the losses suffered. It is owing to the fact that GG had duly accepted the offer placed by CC and has communicated the acceptance made to CC on behalf of their offer. Nonetheless, GG has fairly met all the conditions stated by CC in order to comply and avail the offer. Unfortunately, the letter of acceptance never arrived to CC. Hence, it is crucial for GG to identify those responsible for such miscommunication and negligence. Provided that any individual related with CC is liable for such negligence, GG has the right to sue and enforce a contract as well as to receive compensation. However, if it is proved otherwise, GG will not have any right to prosecute CC against the charge of ‘breach of contract’. Similarly, as CC did not have to bear losses, instead GG was the ultimate sufferer in this case, CC does not have any right to enforce the contract or claim compensation (Bebchuk & Shavell, 1991; Kronman, 1980). On the other hand, GG has already communicated the acceptance of offer through telephone conversation, hence CC can be held responsible for the ‘breach of contract’ partially as telephonic conversation cannot be deemed as firm contract acceptance owing to the lack of substantial proof. Additionally, communications of offer acceptance through instantaneous modes are considered to be valid only when it is received. However, in relation to case in concern, GG, along with sending the letter of confirmation, also communicated its acceptance to CC through the telephone. Contextually, it generates right for GG to sue CC applying for the promised monthly reduction in services rendered of £50. Similarly, CC also has the right to protect itself from the act of GG as CC has already mentioned that customers were eligible to depict their acceptance through e-mail, post and text without mentioning any provision regarding its acceptance over telephonic conversation (Bakilana, 2009). Conclusion From the above discussions it can be stated that there was no evidence that GG has posted the letter of acceptance and even if it was posted, the letter was never received by CC which makes the contract void. Therefore, it can be argued that GG has insignificant right to enforce a legal action against CC claiming compensation as there was no strong evidence that CC has breached the contract. On the contrary, CC also does not possess rights to enforce or claim compensation, as damages were sole incurred by GG. References Bakilana, G., 2009. How Communication of Acceptance is completed by Telephone, Fax, Telex and Email. Scribd Inc., pp. 1-17. Bebchuk, L. A. & Shavell, S., 1991. Information and the Scope of Liability for Breach of Contract: The Rule of Hadley V. Baxendale. The Journal of Law, Economics & Organization Vol. 7 No. 2, pp. 284-312. Cavendish, R., 2006. Contract Law. Routledge. Kronman, A. T., 1980. Contract Law and Distributive Justice. The Yale Law Journal, Vol. 89, No. 3, pp. 472-412. Lawnix, 2012. Dickinson v. Dodds – Case Brief Summary. Cases. [Online] Available at: http://www.lawnix.com/cases/dickinson-dodds.html [Accessed March 12, 2013]. Read More