Advising Mary with Regard to Her Rights against Ruby - Case Study Example

 Client Advice Whilst advising Mary with regard to her rights against Ruby, the following issues have to be considered. Issues Whether any binding contract has been formed between Ruby and Mary. Whether the postal acceptance rule applies to this case. Whether Mary will have any rights against Ruby for her withdrawal from the contract. Rule of Law A very important aspect of a contract is the making of an offer and its acceptance. The acceptance of the offeror’s offer by the offeree results in a binding contract. Acceptance is governed by the following rules; first, it should be communicated to the offeree; second, acceptance should be in total conformity with the offer; and lastly, the agreement should be certain.1 Application A contract constitutes an agreement, whereby a party promises to do or not to do something. Such promise is made on the basis of adequate consideration. A legally valid contract comes into existence, whenever there is an offer and its acceptance. When there is consideration and intent to contract, it becomes enforceable.2 Offer, in this context, refers to the proposal of terms of the contract. The party making an offer is termed the offeror, and the party to whom it is made is called the offeree. An offer becomes invalid if it is terminated by either revocation, rejection by the offeree or if it lapses due to the passage of time.3 In addition, an advertisement is unenforceable, if it just makes promises and does not propose anything or necessitate any reciprocal action from its reader. This is the legal position with regard to advertisement involving future events, such as sales, meetings or travel schedules. In Harris v Nickerson,4 an auction was announced by advertisement and subsequently cancelled. The court held that the prospective bidder could not claim for expenses. 5 In Partridge v Crittenden,6 an advertisement had been placed in a magazine by the defendant. It stated that there were bramble finches for sale. The sale of these birds was an offence under the provisions of Section 6 of the Protection of Birds Act 1954.7 Thereafter, the defendant was convicted for this offence, which he appealed. The appellate court set aside the conviction, on the grounds that the advertisement was nothing more than an invitation to treat, and not an offer.8 Similarly, in our problem, Mary had placed an advertisement in a magazine, regarding the sale of the antique bakery cutters. This advertisement was merely an invitation to treat, as per the ruling in the above case. Consequently, the advertisement placed by Mary does not constitute an offer. Nevertheless, when the advertisement can be construed to contain an offer, any individual who accepts it will be entitled to a claim. This was the ruling in Carlill v Carbolic Smoke Ball Company.9 In Warlow v Harrison,10 the advertisement stated that an auction would be held without reserve. The court held that these terms of the auctioneer constituted an independent personal offer to the highest bidder in the auction. 11 Consequently, the advertisement was deemed to be enforceable by the bidder. Furthermore, in Barry v Davis,12 the auctioneer withdrew the sale in an auction that did not have a reserve price.13 The court held that the auction could not be withdrawn, merely on the grounds that the price was too low. It also ruled that there was a contract between the highest bidder and the auctioneer.14 Moreover, in Hyde v Wrench,15 a farm was offered to the claimant for sale by the defendant. The amount cited was £1,000 and to this the claimant consented to pay just £960. This was rejected by the defendant. Subsequently, the claimant attempted to accept the initial offer. The court held that there was no contract, as the counter offer of the claimant had extinguished the original offer of the defendant.16 In Harvey v Facey,17 the plaintiffs wired the defendants, querying them if they would sell a particular item. They asked the defendants to communicate the lowest acceptable price by wire. To this the defendants conveyed that the lowest price was £900, and the plaintiffs wired back that they consented to purchase the item. The Privy Council held the defendant’s telegram to be merely an indication of their desired minimum price and not an offer. Consequently, the second wire from the plaintiff was not an acceptance.18 Similarly, in our problem, Ruby had made an enquiry over the telephone with respect to the price of the antique baking cutters. Consequently, this does not constitute an acceptance of Mary’s offer. It constitutes only an enquiry with respect to the price of the desired articles. In accordance with the above discussion, an acceptance has to be unambiguous and it has to be in strict compliance with the terms of the offer. Therefore, Ruby’s letter retracting her proposal for purchasing the antique baking cutters cannot be deemed an acceptance. In addition, in Adams v Lindsell,19 the postal rule came to the fore. This rule states that when it is reasonable for the offeree to accept an offer by post, the related acceptance transpires with the posting of the acceptance by the offeree to the offeror. In this case, the defendant had communicated with the claimant offering wool for sale by post, and required the latter to convey his reply by post. On receipt of this letter the claimant posted his acceptance immediately. However, this reply was delayed and the defendant presumed that the claimant was disinterested in his offer. Accordingly, he sold the wool to another party, and the claimant sued for breach of contract.20 The court held that a valid contract had been formed the moment the claimant had posted the letter of acceptance. This ruling has been termed the postal rule and applies to situations, wherein the agreed upon mode of communication is the post. In such instances, the letter of acceptance has to be properly addressed and should be stamped appropriately.21 This case is not applicable to our problem, since Ruby’s enquiry regarding the price of the antique bakery cutters is not an offer and Mary’s response to that enquiry through her letter is not an acceptance. As held in Household Fire & Carriage Accident Insurance Co Ltd v Grant,22 the offeror is rendered bound by the acceptance, even if he is unaware of the same and even if he never receives it. Another disadvantage to the offeror is that as per the ruling in Byrne v Van Tienhoven,23 he cannot revoke his offer, subsequent to the posting of its acceptance by the offeror.24 Conclusion In our problem, Ruby’s enquiry regarding the price of the antique bakery cutters does not constitute an offer. Therefore, Mary’s assent for the sale via a letter does not constitute acceptance. Hence, there is no binding contract between Mary and Ruby. However, Mary’s letter which agreed to sell the antique cutters for the price quoted by Ruby can be construed to be an offer. All the same, on Tuesday morning, Ruby dispatched a letter to Mary disclosing her intention to withdraw her proposal of purchasing the bakery cutters. On the very same day, in the evening, Mary posted a letter to Ruby consenting to sell for the price stated by Ruby. This letter from Mary constitutes an offer and not an acceptance, as per the ruling in Harvey v Facey. As such, it can be surmised that there is no binding contract between Mary and Ruby. Consequently, Mary cannot have any contractual rights against Ruby. Since, a binding contract had not been established between Mary and Ruby, the latter cannot be held liable for breach of contract, as per the provisions of the contract law. Bibliography — — ‘Contractual agreement - offer and acceptance’ (a-lawresources) accessed 18 February 2014 Adams v Lindsell [1818] EWHC KB J59 Barry v Davis [2000] EWCA Civ 235 Beale HG, Bishop WD and Furmston MP, Contract (Routledge 2013) Byrne v Van Tienhoven [1880] 5 CPD 344 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 Charman M, Contract Law (Routledge 2013) Chen – Wishart M, Contract Law (Oxford University Press 2012) Harris v Nickerson [1873] 42 LJQB 171 Harvey v Facey [1893] AC 552 Household Fire & Carriage Accident Insurance Co Ltd v Grant [1879 – 1879] LR 4 Ex D 216 Hyde v Wrench [1840] 49 ER 132 McNutt P, Law, Economics and Antitrust: Towards a New Perspective (Edward Elgar Publishing 2005) Partridge v Crittenden (1968) 2 All ER 421 Poole J, Casebook on Contract Law (Oxford University Press 2012) Protection of Birds Act 1954 Rossini C, English as a Legal Language (Martinus Nijhoff Publishers 1998) Stone R, The Modern Law of Contract (Routledge 2013) Taylor R and Taylor D, Contract Law Directions (Oxford University Press 2013) Tufal A, ‘Cases on Formation of a Contract’ (lawteacher) accessed 18 February 2014 Warlow v Harrison [1859] 29 LJQB 14 Whincup MH, Contract Law and Practice: The English System with Scottish, Commonwealth, and Continental Comparisons (Kluwer Law International 2006) Read More