Quality in the Work Environment - Essay Example

LAW ASSIGNMENT (PART –2) What’s an Offer ? ‘When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal’ and a offer can be defined as an specific proposal to enter into an agreement with another. An offer is essential to the formation of an enforceable contract. An offer and acceptance of the offer creates the contract. [1] An offer is an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed, the "offeree".[2] What’s an Contract ? A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. Contract law is based on the Latin phrase pacta sunt servanda (pacts must be kept).[3] A contract is an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration. The existence of a contract requires finding the following factual elements: a) an offer; b) an acceptance of that offer which results in a meeting of the minds; c) a promise to perform; d) a valuable consideration (which can be a promise or payment in some form); e) a time or event when performance must be made (meet commitments); f) terms and conditions for performance, including fulfilling promises; g) performance, if the contract is "unilateral". [4] REPORT FOR ALAN FOR A SUCCESSFUL SUIT Alan in the given circumstances your case stands on a firm footing and has a very strong chance to succeed in a Court of Law. As per the facts provided Dan Maxwell is a director of KNW Ltd, a local property development company and you (Alan Smith) are owner of a small firm that trades as ‘D&A Builders’. Dan asked you at a meeting whether you would be interested in constructing a couple of 3-Bedroom, semi-detached house on a site that the company owns. In legal terms he gave you an invitation to offer as per ‘Fisher v Bell [1961] 1 Q.B. 394’[5] The brief facts of the case are : (In this case a shopkeeper displayed a flick knife along with a price tag on it in a shop window. As per the Restriction of Offensive weapons act 1959 it was an offence to even offering a flick knife for sale. The magistrate’s court prosecuted the shopkeeper but the Hon’ble Judges refused to convict him, as according to them legally speaking the knife had not been ‘offered for sale’. This decision was even upheld by the Queen’s Bench Divisional Court. Lord Parker CJ stated: “ It is perfectly clear that according to the ordinary law of contract the display of an article with a price on it in a shop window is merely an invitation to treat. It is in no sense an offer for sale the acceptance of which constitutes a contract.”) and ‘Pharmaceutical Society of Great Britain v. Boots Cash Chemists Ltd.’(1953)1Q.B.401 [6] The brief facts of the case are: (In this case the defendant’s shop followed a system of self-service. The Court of Appeal had to decide whether certain drugs that were sold were done under the supervision of a registered pharmacist. The question was ruled in favour of the defendants. Somervell LJ stated that "in the case of an ordinary shop, although goods are displayed and it is intended that customers should go and choose what they want, the contract is not completed until, the customer having indicated the articles which he needs, the shopkeeper, or someone on his behalf, accepts that offer. Then the contract is completed.") The rulings in the above-mentioned cases clearly illustrate that Dan invited you to make an offer to him after assessing the cost-benefit analysis. You made an offer to Dan and KNW Ltd to construct the houses for a sum of 95,000 pounds each. You made the offer on your company’s letterhead that also contained the terms at the backside. Dan responded by telephone and was apparently satisfied by the price quoted by you. Dan and his company accepted your offer through a letter a week later. That’s how a contract culminated between your company………… and KNW Ltd. According to Dan’s letter the work required to be started at the site on 4th July and the units to be completed within one month. The letter set out other general terms but didn’t include a price variation clause thereby impliedly accepting your term as to price variation. The letter further stated that ‘time’ was the essence of the contract and the order was not valid until acceptance was confirmed by return of post. But Dan’s arguments hold no ground as he in his letter has not invited any objections from your company as to condition of project being completed within a given time frame and the term is vague after sending a letter of acceptance. Dan’s statement that the order was not valid until acceptance was confirmed by post also holds no ground as according to the general rules of contract law ‘the communication of a proposal / offer is complete when it comes to the knowledge of the person to whom it is made; and the communication of acceptance is complete, - as against the proposer, when it is put in a course of transmission to him so as to be out of the power of the acceptor; As against the acceptor, when it comes to the knowledge of the proposer. This legal position is also supported by ‘Felthouse v. Bindley(1862)6L.T.157’[7] The brief facts of the case are : ( In this case the plaintiff talked to his nephew about buying a horse from him and wrote to the nephew “If I hear no more about him, I consider the horse mine” The nephew didn’t responded to the letter but in fact wanted to sell the horse to the plaintiff, at the sale the nephew even told the defendant auctioneer that not to sell the horse. But by mistake the defendant sold the horse. As a result the plaintiff sued the defendant but he had a chance to succeed only if he can show that the horse belonged to him. It was held that the Plaintiff (Uncle) has no right through which he can force his nephew to sell the horse unless he chose to comply with the condition of writing to repudiate the offer. It is clear that though nephew intended to sell the horse to his uncle but didn’t communicate his intention to his uncle (Plaintiff), or had done any overt act to bind himself. There was nothing to show on record that something has been done to vest the property in the horse in the plaintiff. No bargain has been effected to pass the property in the horse to the plaintiff, and so the plaintiff had no right to complain about the sale.) Alan in your case the communication of offer was valid, even acknowledged by the opposite party and even the acceptance is valid as per the rules of contract law. It is stated further that once the acceptor sends his acceptance by any of the usual modes and it’s out of his control, a condition cannot be tied to his acceptance. He can only revoke his acceptance that he has not done. So your contract is a valid contract sans any conditions. If we see the other way round you didn’t acknowledged the receipt and started construction on the site from 4th July that through his conduct Dan acknowledged as he didn’t stop you from starting the construction. So in the light of all these facts and circumstances it is quite clear that Dan has impliedly agreed to be bound by the general terms of the contract and regarding special provision of ‘time being the essence’ of the contract since you didn’t respond to that and Dan never again raised the issue specifically about this term with you, this term is not applicable in the contract between you and Dan/KNW Ltd. Your act of not acknowledging the receipt and immediately starting construction on the site can be upheld legally and the opposite party is bound by their part of the contract. By 28th july your company D&A had almost completed the first house when an incident occurred on the site. Due to that incident KNW ltd asked you to leave the site saying that your services are no longer required but this termination of contract cannot be sustained legally as it was a unforeseeable circumstance that you couldn’t avoid possibly and the contract between your company D&A and KNW Ltd. didn’t carry any provision for such kind of contingency so the contract cannot be terminated mid way by the acceptor. It cannot be terminated especially when the offeror / proposer is ready to fulfill his part of the promise and even Dan/KNW has not suffered any loss of profit on this account. KNW Ltd could only have terminated the contract legally on the basis of a contract made on Mistake, Coercion, Fraud, Undue Influence, Misrepresentation or Incapacity of the parties to the contract. You almost finished the work on the second dwelling unit by 4th August i.e. within 1 month so you have a rightful claim to ask for an interim sum of 2,18,000 pounds from KNW Ltd. Also as discussed by me above that the term of ‘time being the essence of the contract’ is not applicable in your case, then Dan cannot claim that he suffered any loss because of you. Any special provision that is attached to a contract other than the general terms of the contract has to be accepted by both the parties voluntarily. But you by your conduct displayed to Dan that you are not agreeable to the above-mentioned term of ‘time’ being the essence of the contract. Dan didn’t object to it and impliedly accepted your position. These facts about special provision are amply illustrate in the case ‘Hadley v. Baxendale(1854)9Excl.742’ [8] The brief facts of the case are : (The Plaintiff, Hadley, was running a mill. One day the mill was forced to shut down as the crank shaft of the mill has broken down. Hadley asked the defendant, Baxendale, to deliver the crankshaft to qualified engineers for getting it repaired by a certain date. But Baxendale was not able to deliver by that date and due to that Hadley lost some business. Hadley sued Baxendale for the profits he had lost due to late delivery and the was awarded 25 pounds by the jury as damages. Baxendale, appealed in the higher court on the ground that he was unaware about any particular damage to hadley due to the late delivery. The question that was raised in this appeal was that could a defendant be held liable in a breach of contract case for damages that the defendant was not aware can be incurred from a breach of the contract. The court presided by Baron Alderson decided that Hadley cannot recover lost profits in this case, and also held that Baxendale could only be held liable for losses that can be forseen, or in the case if Hadley had mentioned the special circumstances in advance to Baxendale. The argument that a party has sent something for getting repaired does not show that it would lose profits if the thing was not delivered on time. The court also suggested various other circumstances under which Hadley could have entered in to this contract and that would not have presented and led to the current circumstances. The Court also noted that in cases where special circumstances exist, the parties should voluntarily make provisions in the contract to impose extra damages for a breach. In this case, however, the Hon’ble court stated: "the loss of profits here cannot reasonably be considered such a consequence of the breach of contract as could have been fairly and reasonably contemplated by both the parties when they made this contract.") [9] In the light of the facts of the case you can file a suit for specific performance of contract against KNW Ltd to fulfill his part of the obligation and it will definitely see the light of the day and will be successful. Defense to be taken if KNW Ltd files a Counter Claim In case Dan or KNW Ltd files a counter claim against your company then it can be effectively countered by shifting the onus of breaking of the contract on his company KNW Ltd. We can seek exemplary damages from Dan and KNW Ltd for breaking the contract mid way. Dan or KNW Ltd’s counter claim won’t survive as they terminated the contract midway without any apparent reason that was provided within the terms of the contract. You performed your part of the contract and in view of that KNW Ltd either perform their part of the contract agreed upon mutually or they will be liable to pay exemplary damages to your company on various grounds. BIBILOGRAPHY 1. http://dictionary.law.com/default2.asp?selected=1380&bold=|||| 2. G.H. Treitel, The Law of Contract,10th edn, P.8 3. Hans Wehberg, Pacta Sunt Servanda, The American Journal of International Law,Vol53, No.4(Oct,1959), P.775] 4. http://dictionary.law.com/default2.asp?selected=337&bold=|||| 5. http://westlaw.co.uk 6. http://westlaw.co.uk 7. http://westlaw.co.uk 8. http://westlaw.co.uk 9. http://en.wikipedia.org/wiki/Hadley_v._Baxendale Read More