The US Contracts Law - Dodds v Dickson - Essay Example

Running Head: USA LAW OF CONTRACT Customer Inserts His/her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name Date USA LAW OF CONTRACT In this case of Dodds v. Dickson the issue is whether a promise to hold an offer open is binding where the other party does not accept until after he learns that the offeror has already conveyed the property1 .Dodds agreed to sell his property to Dickson for the sum of 800 pounds and promised that the offer is to be left over until Friday the 12th June 1874, 9 o’clock for Mr. Dickson to determine whether to purchase or not as well as to refuse the property at the price 800 pounds2. This amounts to a standing offer where Dodd gave Dickson an invitation to accept or refuse the offer between certain dates. The holding and rule to this case is that a promise to hold an offer open is not binding where the other party does not accept until after he learns that the offeror has already conveyed the property3. An open offer to sell terminates when the offeree learns that the offeror has already agreed to sell to someone else and hence Dodds agreeing to sell the property to Thomas Allan the other defendant led to the termination of the offer despite the fact that Dickson had already made an acceptance to the offer before the stipulated date4. Since Dickson knew that Dodds offer had been implicitly withdrawn when he learned that he had sold the property to someone else, there was no meeting of minds at the time acceptance was made and therefore a binding contract was not formed5. On Thursday the 11th of June it appeared that Dodds had signed a formal contract for the sale of property with to the defendant Allan for 800 pounds and received from him a deposit of 40 pounds. It is evident that the property was for 800 pounds and receiving 40 pounds as a deposit which is not one of the terms for the contract amounts to a counter offer and hence these results to a lapse of the contract between Dodds revoked his offer to Dickson but then Dickson learned about it after his acceptance6. Revocation of an offer has to be made any time before acceptance and must be communicated otherwise it does not take effect until the offeree becomes his offer open for some time, he can still revoke it so long as nobody has accepted it or if that offer is accepted by consideration. It is sufficient if the offeree comes to know of it through any reliable service. Mr. Wrench offered to sell his farm for 1000 pounds to Mr. Hyde responded by saying that he would give 950 pounds for it. Wrench wrote back rejecting this proposal. Mr. Hyde wrote to say that he would give the 1000 pounds after all Hyde sued Wrench trying to enforce a sale of 1000 pounds he failed. It was held that no contract came into effect because Hyde’s response of 950 pounds was a counter offer which put an end to the offer of 1000 pounds. The counter offer was refused so it did not lead to a contract. The subsequent acceptance by Hyde of the original offer was not an acceptance at all and could not be an acceptance because there was no offer in existence it was itself another offer by Hyhde which Wrench was entitled to refuse7. Dodd’s specifically performed the contract of June 10th, 1874 and this is evidenced by the fact that he signed the contract and the specified time given for the offer. Though Dickson can be entitled to bring suit for specific performance against Dodds due to his refusal to accept his acceptance for the offer before the stipulated time or date, but then the test is whether a reasonable person would conclude that the party’s words and actions constituted an offer. This issue can be supported by the case of Lucy v. Zehmer whereby one evening in December 1952 after several drinks, Zehmer the defendant wrote a contract on a restraint bill in which he agreed to sell his farm to Lucy the plaintiff for 50000 pounds. Zehmer later insisted that he had been intoxicated and thought the matter was a joke, not realizing that Lucy had been serious. Lucy claimed that he was not intoxicated and believed that Zehmer was also sober. Zehmer testified that he was already “high as Georgia pine” when he began drinking with Lucy. He claimed that he was merely bluffing to try to get Lucy to admit that he did not actually have 50000 pounds. Lucy brought suit for specific performance when Zehmer refused to complete the transaction. The trial court ruled for Zehmer holding that Lucy had not established a right to specific performance. The issue was to determine whether a party has made a valid offer, how the court determines whether the party had the intent to contract. The rule is that in determining whether a party has made a valid offer, the words and actions of the party are interpreted according to reasonable person standard. If the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial except when an unreasonable meaning which he attaches to his manifestations is known to the other party8. The court looks to the objective, outward expression of a person and not to their secret and unexpressed subjective intent. The test is whether a reasonable person would conclude that the party’s outwards and actions constituted an offer. In this case Zehmers acts and words could be reasonably interpreted by Lucy as an offer to sell his farm. In the case of Dodds v. Dickson the objective, outward expression of Dodds was to contract with Dickson and hence the court does not look at his secretive and unexpressed subjective intent. Dodds acts and words could be reasonably interpreted by Dickison as an offer to sell him the property9. In this case of Phillip and Mildred there was an acceptance by post since the general rule is that acceptance by post takes effect when the letter of acceptance is posted and not when it reaches the owner. In this case Mildred wrote a letter of acceptance to Phillip with proper address and mailed it to Phillip, despite the fact that Phillip never received the letter there was already an acceptance when Mildred mailed the letter. This is well supported in the case of Morrisons v. Thoelke10. Since the offer does not state that it should be posted or hand delivered in order to be accepted then it is not generally bound to any method of acceptance. Revocation of an offer must be communicated to the offeree, though not necessarily by the offeror himself, it is sufficient if the offeree comes to know of it through any reliable service. In this case a revocation by post does not take effect until it is actually received by the offeree. Phillip promised to keep his offer open until August 21st 2003 but then he is not bound by this date and hence he can still revoke his offer at any time before expiration of that time which he did on 2nd of August. If Mildred by 2nd of August had already accepted the offer then the offer was valid. This is well supported by the case of Dickson v. Dodds. Mildred already has a contract because an acceptance by post takes effect as soon as the acceptance is posted while revocation takes effect when it is actually received by the offeree. The revocation came later after she had already posted the letter hence an indication of acceptance. Case of Bryne v. Van Tienhoven (1880). This was just but a mere offer by Phillip to Mildred and there was no contract acceptance by Mildred. By posting the letter of acceptance on August 5th Mildred has already accepted the offer. Changing her mind later in the day does not amount to rejection of the acceptance since acceptance by post is effective once the mail has been placed in the mail box or posted and since she never mentioned her en route letter to Phillip it amounts to an acceptance by her way of conduct. The object of variation is to alter some term of the contract. In this case the variation is made for the benefit of Mildred. In equity as well as in common law, the party for whose benefit the indulgence has been granted will not be allowed to repudiate or renounce it. Hence Phillip could not fail to accept Mildred’s reject through the phone call arguing that Mildred was in breach of his contractual obligation. The courts of equity hold that a party who had granted an indulgence to another is bound by it11. In this case this was an offer to enter into a unilateral contract and the issue whether it can be revoked at any time prior to the performance of the requested act. An offer to enter into a unilateral contract may be revoked at any time prior to the performance of the requested act. Phillips offer to Mildred was for the making of a unilateral contract. Phillip contracted with someone else to purchase the 300 dwarf apple seedlings and threw away Mildred’s letter of acceptance after her revocation. In this case it amounts to a quiet title of the property to be sold. This is property that the title to the property has some confusion to it and Mildred cannot sell the property to Phillip when there is confusion. Since Mildred had repudiated the contract and was not ready to sell the property to Phillip but again changed her mind and was ready to sell the seedlings to Phillip then Phillip is bound by the contract because Mildred has already accepted the offer by posting the mail. Mere silence cannot constitute acceptance. In order to be bound to a contract a person must take positive steps to it either by express or by conduct. If he does nothing he cannot be bound12. In this case there is a contract. This contract is referred to as a contract of an agreement to sale since the transfer of property in the goods is to take place in contract. There is also a consideration of 100,000 pounds13. The terms of the contract include; Exemption clauses- This is a term in a contract which tries to exempt one of the parties from liability in certain events. For instance in our case the seller does not warranty its goods in any way, and specifically disclaims any warranty of merchantability or of fitness. Not an acceptance unless the buyer expressly agrees to all changes proposed by the seller. A condition that goods are of merchantable quality and thus do not warranty the goods. A clause stated by the buyer that he objects in advance to any changes the seller attempts to make to the terms of the purchase order. A warranty is a term of lesser importance and as such does not go to the root of the contract. Its breach entitles the innocent party to claim damages but does not give rights to contract termination. In this case the parties are differing in that the buyer objects in advance to any changes seller attempts to make to the terms of his purchase order and the seller denies that the form is not an acceptance unless buyer expressly agrees to all changes proposed by seller. In this case if the parties continued without any further discussion of their differences, the deal would not include a warranty since the seller does not warranty its goods in any way and disclaims any warranty of merchantability or fitness. This s is well addressed by the case of Baldy v. Marshal where the plaintiff asked the defendants who were motor dealers for a car suitable for touring dealers. The defendant suggested a Bugatti car could be appropriate. After delivery it was found to be unsuitable for touring purposes. The written contract included a warranty for 12 months against mechanical defects but expressly excluded any other any other warranty statutory or otherwise14. The court of appeal held that the stipulation for suitability of purpose for touring purposes was a condition not a warranty and therefore the exemption clause could not apply. I. In this case of Farmer Del v. Brushy there is an acceptance by Brushy to the farmers offer. An offer may be made by word of mouth, in writing or by conduct. In this case the farmers made an offer by word of mouth by approaching Brushy and requesting him to paint his barn red and pay him 2000 pounds. Del confirmed his acceptance and was to start the next morning. An acceptance once made cannot be revoked and an offer may be revoked by an expression notice before it is accepted. Acceptance cannot be revoked in any circumstances. The moment a person expresses his acceptance for an offer that very moment the contract is concluded, and it does not matter whether the acceptance is by word of mouth or in writing. In this case Brushy accepted the offer and went ahead to perform his promise. Thus Brushy further accepted the offer through part performance since he had already painted half the barn before Del came running up to him yelling to him to stop and get down out of the ladder at that moment. Acceptance by part performance prevents the offered from withdrawing the offer. In this case the offer is gained to be accepted by Brushy beginning to perform the painting of the barn. To make a contract binding the acceptance must be communicated so that a mere mental intention to accept is not sufficient. In this case the contract is binding since Brushy communicated the acceptance as well as the performance the following morning and acted as promised15. In the case of Madison v. Alderson (1883), the home of lords stated that non compliance with the statutory requirements does not render a contract void or illegal, but renders the kind of evidence required indispensable when it is sought to be enforced.” As a result of the equitable doctrine of part performance in certain cases the court will allow a contract to be proved by verbal evidence, notwithstanding that a particular kind of evidence required by the statute is missing. The conditions which must be satisfied before the doctrine is involved include; the acts of part performance must be capable of referring solely to the contract sought to be enforced. MADDISON V. ALDERSON, 1893. There is peoples oral evidence of the terms of the contract available, The act of part performance relied on is such that it should be fraudulent to show the defendant to take advantage of the lack of written evidence, The contract to which the alleged act of part performance refers must itself be capable of specific performance by the court and damage are met adequate remedy. In this case Brushy is entitled to payment for damages of the part performance or claim on quantum mercuit basis. Del goes ahead to threaten Brushy of his right in terms of the contract entered and refuses to pay him for his part performance16. The contract between Del and Brushy has not been entered in to freely since Del does not believe in the words of Brushy that he is going to paint the barn, but he insists on Brushy to JUST DO IT! A contract is an agreement which has to be entered in to freely by the parties, if it is not then this contract becomes void of duress, hence Dels threat to have Brushy arrested for trespass amounts to duress since Brushy is requesting for payment which is right for his part performance, the actually was no intent to contract with the 3rd party hank it was just like away to pave the farm out of him since he had been contemplating to sell the farm. The issue of duress is well addressed in the case of D& C Builders v. Rees where the plaintiff had done some work for the defendant who had not paid the fees for a considerable period of time. When the plaintiff insisted defendant offered to pay a part of what they owed. If accepted as full payment as full settlement of the debt and they stated that if they didn’t accept then they would not pay at all. The defendant knew that this kind of pressure was going to work since the plaintiff was at the verge of being declared bankrupt so he was forced to accept however reluctantly and signed a paper stating that he would not claim the balance but later they demanded the balance. The court held that the pledge was not binding since there was no sufficient consideration and even if so, the promise wasn’t enforceable since it wasn’t freely given but under threat and there was no satisfaction nor consideration17. II. In this case of Maraschina and his nephew Nicky, Nicky acts as an agent of his aunt and establishes an agency relationship. Nicky as an agent is entitled to perform various duties and in this case an agent is not supposed to accept or make any secret profits or accept bribes. In this case Nicky over quotes the price of the limousine with the intent to benefit from extra profits as well as getting in to a deal with George to lure his aunt to accept the deal and George to offer him $15000 amounts to a bribe. The issue here is that Maraschina relied heavily upon his nephews judgments’. This amounts to undue influence since the aunt is ignorant and trusts anything his nephew tells him to an extent of even having him as his business manager. Undue influence occurs where the parties are in a special relationship where it will be resumed and it’s up to the parties to resume contract to show that there was no undue influence. Such special relationship includes relationship with trustee and beneficiary and in such relationship it would be difficult for a trustee to display the presumption of undue influence between the two parties. It can also occur between parent and child, doctor and patient18. I n this case there can be undue influence defense, since Maraschina after realizing that she had been grossly overcharged for the limousine she never took any action but instead after some soothing conversation from Nicky, Maraschina relented because she was fond of her nephew. This issue can be well addressed in the case of Ottoman Bank v. Mawani (1965), where the defendant Mawani signed a contract guaranteeing a loan made for repayment of a loan for his father. At the time he signed he had attained age 25 years but was still dependent on his parents. He worked in his father’s shop and was fully dependent on his father’s wages. Unfortunately fathers business wasn’t doing well and father wasn’t able to pay bank loan .Bank brought an action against his father and Mawani brought a case subject to undue influence defense, which court accepted. Since there wasn’t evidence, though he had received independent advice on the transaction must be set aside. Where there is no special relationship between parties of course there will be no presumption of undue influence and it’s up to the party who claims that he was the victim of undue influence to prove it by evidence19. There is no special relationship between Maraschina and George hence there is no presumption of undue influence. The effect of undue influence is to make the contract voidable victim therefore has a right to rescind the contract and if he does parties will be returned to their specific positions before the incident. If parties to victim affirm contract after undue influence has ceased to operate on him then the right to rescind has changed. If a victim waits a long reasonable time without taking action he will not be able to rescind contract. The long delay is evidence of a decision to continue with the contract20. In this case Maraschina took a longtime without taking action not until he found his beloved nephew in bed with the chambermaid it was then he flew into a jealous range and called the lawyer hence in this case the right to rescind was already lost. References: Gerald Spindler , (2002). E-commerce law in Europe and the USAAuthor Editors. New York. Springer. Gregory Klass, (2010). Contract Law in USA. New York. Kluwer Law International. Ole Lando, Commission on European Contract Law, Hugh Beale, (1999). Principles of European contract New York. Kluwer Law International. Schaffer, R., Agusti, F. & Earle, B. (2008). International Business Law and Its Environment. New York, NY: Cengage Learning. Stephen Fishman. Working for Yourself: Law & Taxes for Independent Contractors, Freelancers & Consultants. Nolo, 2008 Read More