Legal Issues on Contract about Ralph and Lauren - Case Study Example

Name Course Institution January 05, 2011 Scenario 1 Title: legal issues in contract in reference to Ralph and Lauren Invitation to treat The display of the camera at Ballarat Electronics does not amount to an offer but an invitation to treat. The shop displayed the items on sale and also had sales persons like Lauren on stand-by to be able to negotiate or bargain with the customer on their prices before any offer can be made. In a decided case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] The Court held that the display of a product in a store with a price attached is not sufficient to be considered an offer, but rather is an invitation to treat. There is never an offer to sell but only an offer to buy; the one who buys makes the offer. The contract is usually not completed until the sales person or the shop owner accepts the offer. Offer An offer is showing the willingness to contract made with the intentions that it shall become binding on the offerer (Ralph) immediately it is accepted by the offeree (Lauren). An offer in order for it to raise a contract it must have intended to create and must be able of creating legal creations. Social and moral relation not intended to have monitory value will usually not give to legal obligations hence it is necessary that to amount to a contract, there must be a promise to do or abstain from doing something as a matter of legal duty. By Ralph asking about the camera and offering to pay for it at $200 that cold be considered as an offer, which was rejected by Lauren the Sales Person who considered it the final price for the camera hence stuck with the original price of $ 250 which Ralph was not willing to part with. Counter offer In this scenario the counter offer was made by Ralph who produced an offer of $ 200 to the sales person who must a have been acting as an agent to the Electronics shop owner. The counter offer was rejected because it seemed too low for the commodity. A counter offer is also seen as a rejection of the previous offer and once rejected an offer dies and cannot subsequently resurrect. Ballarat was selling the camera at $250 which was rejected by Ralph subsequently he accepted to buy the camera at the price and in the mean time Ballarat Electronics through its sales person refused to sell it. In this it is seen that there was no contract between Ralph and Lauren hence could not sue Lauren for refusing to sell to him the camera. True rejection of an offer should be distinguished from a mere request i.e. a mere inquiry is not a counter offer and leaves the offer intact. In this case it was a true rejection of the $250 offer made to her by the sales person on behalf the electronics shop and made her own offer referred to as a counter offer of $200 which was rejected as that was the fixed price and Lauren could not change it as she was merely acting as an agent. Termination of an offer This usually the end of a contract which can be seen in different ways; e.g. the lapse of time could squarely bring to an end a contract. Ralph decided to compare the prices of the camera that he had been offered by Ballarat Electronics at $ 250 and having not communicated to the sales person of the likely hood of him buying he left the shop and this brought to an end the earlier on made contract or offer. Acceptance It occurs when the offeree mentally assents to the offeror proposals and makes that assent know to the offeror. An acceptance once posted cannot be withdrawn as it is the moment of the contract i.e. when the contract begins. Acceptance must also be communicated and any notification brought forward to the two parties. When Lauren did not tell it to the Sales person that she would buy the camera and decided to shop around for others thinking that maybe they could have a better deal than she had been offered, that cancelled the earlier on offer hence when she came back there was no contract and everything had to start afresh. There was no acceptance of an offer in this scenario because Ralph refused to buy the camera for the original price and walked out of the shop only to come back later where Lauren refused to sell it at $ 250. The sales person could not be held liable or to be taken to have breached the contract because the previous contract had been terminated when Ralph decided to walk out of the shop. Consideration It may be defined as some rights, profits or benefits accruing to the one person or some bivalence detriment or loss suffered by the other part. In law it is a requirement that the parties involved offer some form of consideration before a contract can be made. Consideration should have an objectively found value. Here are the main aims for consideration. First we have the cautionary where parties look before they leap when making a bargain than when making an off-the-cuff promise of a gift. This is the reason why Ralph decided to check prices of similar cameras at other shops just to be sure he was getting the best bargain. Secondly parties can commemorate, or at least remember, a promise made due to a bargaining process. Moreover, there is channeling where parties coherently stipulate their specific desires when they are forced to bargain for them. There are four rules Consideration must move from the promisor, it need not move to the promisee, past consideration is not good consideration because for there to be a promise it should be at the time of negotiation and finally it ought to be sufficient and not adequate. Scenario 2. Craig’s rights under contract law Capacity In our case scenario Craig was a natural person and had every right to enter into this contract with Carter’s dry-cleaners Invitation to treat In this case scenario when Craig takes his expensive coat to Carter’s Dry Cleaners for laundry is seen as an invitation to treat. When Craig gets into his regular Dry-cleaner to have his coat clean that is an indication of an invitation to treat where then what follows is an offer which Craig could have refused or even Carters could have rejected to take-up the coat because it was an expensive one. But with consideration of the terms on the reverse page of the receipts which are usually in fine print make him gladly take the coat and enjoy the business continuation. Offer. The offer is usually made at the counter or till. An offer shows that one party is willing to contract with the second party on certain terms without further negotiations. The offer included that Craig was to collect the coat on Friday and Carter’s Drycleaners would not be held liable for any damage of the coat or any objects left in the pockets as it is meant to be the owner’s responsibility to ensure that he/she emptied the pockets. The English case of Smith v. Hughes (1871) LR 6 QB 597 emphasizes that the important thing is not a party's real intentions but how a reasonable person would view the situation. The contract or offer was completed when Craig decided to the receipt from the Drycleaners with the terms and conditions on the reverse side of the receipt. With the Carter’s, having stated the terms on which the contract to be bound then the offer. Craig could have read the fine print of the receipt to avoid such eventualities that befell him of getting a damaged coat worth of $ 195 inclusive of the damaged mobile phone left in the pocket. The offer generally confers a power to the offeree and confers a power on another to bind the offerer. Counter offer In the case of Craig and Carter’s Dry-cleaners there was no counter offer, which is usually the emergence of bargain for the price of the service that is to be rendered. If it was there Carter’s could have an option of accepting or rejecting it and deciding not to clean the expensive coat. A counter offer could have been experienced where Craig could have requested for a discount or a lower price for the services to be offered i.e. of dry-cleaning his coat or even having an earlier day for it collection maybe on Thursday instead of Friday. Acceptance It is usually a final expression of showing the assent of the terms of the offer created i.e. it validates the contract. The acceptance of the offer was when they i.e. the dry cleaners agreed to take up the coat for laundry even if it was expensive. Craig also had to bear the fact that accepting to get his coat dry-cleaned meant that he had agreed with the terms and conditions and incase of any damages like it happened, he could sue Carter’s Dry-cleaners for destroying his coat by having burn marks on it. The dry cleaners could also not be held liable for the damaged mobile phone that was accidentally left in the coat because Craig had a responsibility of ensuring that he had emptied the pockets. One party cannot claim to have intended to be bound by the agreement as long as it was communicated and in this case all the communication was done through the receipt which Craig got and it represented the signing of a contract which resulted to his assent to it. In some cases there can be oral agreements although most of the contracts require a written one as evidence and to avoid many unnecessary conflicts and cases in the court of law. Consideration Consideration in legal terms should involve both parties before going ahead to make the contract because after the contract no party is expected to breach it. In our case scenario of Craig and Carter’s Drycleaners who were the two parties had an agreement. Craig consideration is the coat and the money he will pay for the services rendered while Carter’s consideration is offering the dry-cleaning services. The parties have also to note the terms and conditions of the contract like this to avoid being caught off-guard. Craig could not sue Carter’s Dry-cleaners for the burnt coat or even the damaged mobile phone as all this was not a liability to the Dry-cleaners as stated on the reverse side of the receipt “We will not be responsible for any loss or damage of whatever nature or however caused” References: Stephen Fishman. Working for Yourself: Law & Taxes for Independent Contractors, Freelancers & Consultants. Nolo, 2008 Read More