Principles of Contract Law - Assignment Example

Title: Contract Law Customer Inserts His/her Name Customer Inserts Name of Tutor Customer Inserts Grade/Course (Date) Question 1 An offer is a promise made by an “offerror” that is capable of becoming binding upon being accepted by the “Offerree”. It can take the form of an act or may be in the form of an oral or a written statement(Burton 2009, P. 46). For an act or statement to be considered as an offer it must be proven that the offerror was willing to be bound by the terms as was held in Harvey V. Farcey (1893) AC 552.In the case, Harvey sent Farcey a telegram asking for the lowest price of a pen .Farcey replied that the lowest price was 900 pounds. Harvey agreed to buy the pen at the price of 900 pounds. The privy council held that a contract was not formed as Harvey had only responded to the request about the price but had not expressed intention to sell the pen therefore Farcey’s response was not an offer. An offer is only binding if the communication to the offerree is clear. An offer must be distinguished from an invitation to treat. An invitation to treat is the act of expressing an interest to negotiate. The person making the invitation to treat does not have any intention to be bound even if the person to whom the invitation is made accepts the invitation (Fuller, 2009). The concept of an invitation to treat was established in The English case of Spencer V. Harding (1870) LR 5 CP 561.In the case the defendants had invited tenders for their stock. The court ruled that the defendants did not intend to sell the stock to the highest bidder but were inviting bidders to make offers which they could reject or accept (Burton 2009, P. 51). Advertisements are considered as invitations to treat. In Patridge V. Crittenden (1968) 2 ALL ER 425, Lord Parker ruled that advertisements were not offers as it would not make business sense. Advertisements can amount to offers in certain cases. In Carlill V. Carbolic Smoke Ball Company (1893) 1 QB 256, the defendants whose advertisement stated that they would d pay anyone who contracted influenza upon using their product 100 pounds and put 1000 pounds in the bank as good faith had made an offer to the entire world and were bound to act according to their terms of their advertisement because it had created a contractual obligation. In our question, when Khan puts the advertisement on the notice board, he makes an invitation to treat. When Mike, Alice and Severiano respond to his notice, they make offers to Khan. Khan can choose to accept or reject their offers. Question 2 Acceptance is “the unqualified assent to all the terms of the offer.”(Mendrick, 2007). The postal rule is a general exception to the rule that acceptance must be communicated. In ADAMS v. LINDSELL (1818) 1B &Ald 681, it was decided that in cases of acceptance by post, the acceptance is effected when an appropriately addressed letter is posted i.e. when the letter is put in the letterbox at the post office. In the case the defendants had written to the plaintiffs on 2nd September expressing the intention to sell wool. They had requested the plaintiffs to reply through post. The letter containing the offer was addressed wrongly and the plaintiffs received it on 5th September. Due to the delay the plaintiff’s letter of acceptance reached the defendants on 9th September by which time the defendants had already sold the wool on 8th September to another person. The question before the court was whether there was a contract between the plaintiffs and the defendants by the time the wool was sold to another party on the 8th of September. The court held that acceptance had been effected as soon as the plaintiffs posted the letter therefore the defendant had acted in breach of contract and was liable. (Stone 2010, P. 232). The postal rule sometimes results in injustice if the letter does not reach the offerror. In Household Fire Insurance V Grant (1879) L.R 4 Ex 216, an insurance company agreed o insure Mr. Grant and sent their acceptance through the post office. Grant never knew about it because the letter did not reach him. The court held that acceptance had been effected when the insurance company posted the letter. Mr. Grant was ordered to pay premiums yet he was not aware about existence of the insurance. The main purpose of the postal rule is to assure the offerree of the convenience that would otherwise occur if delay or non-delivery occurred(Stone, 2010).Trietel says that courts apply the coastal rule to rationalize formation of contracts so that there is no doubt as to when acceptance occurs. By posting a cheque on Monday afternoon Mike agreed to buy the phone 4S for the stated price of £250.However this did not result in a contract because Khan’s advertisement was a mere invitation to treat. When Mike posted the cheque to Khan he was making an offer which Khan could choose to accept and give sell him the phone; or reject and stay with the phone or sell it to another person. Question 3 The essential features of a valid and binding contract are: Offer; Acceptance: Consideration; Capacity; Intention to create legal relations; and absence of vitiating factors (Heffey & Robertson 2006, P. 70).Vitiating factors include fraud, mistake, misrepresentation, duress, undue influence and illegality. When Khan puts up an advertisement, he makes an invitation to treat. When Severiano puts a note under the door he makes an offer to buy the phone from Khan. The fact that he slides a cheque along with the note indicates that he furnishes consideration. It is up to Khan to decide whether to accept or reject Severiano’s offer to buy the iPhone 4S.Severiane will have entered a binding contact with Khan if Khan accepts and follows the rules of acceptance. The rules of acceptance are that the acceptance must be communicated to the offerror as was held in Entorres V Miles Far East(1955) 2 QB 327 whereby the claimant had sent a telex while in England offering to buy cathodes from the defendants who were in Netherlands. It was held that English law applied because communication to the offerree had occurred in England; acceptance must correspond with the terms of the offer; and the acceptance must be certain, equivocal and unconditional. Silence does not amount to acceptance as was held in Felthouse V Bindley (1862) EWHC CP. In Brogden V Metropolitan Railway CO (1877) 2 App. Cas. 666, the court ruled that acceptance can be affected through conduct. If the terms of the contract are changed there is no contract since it amounts to a counter-offer (Fuller, 2009). In the case of Alice, text messages and emails were considered to be instantaneous means of communication (Read 2006, P. 106).With time, this perception has changed because unlike a telephone call or fax, one must access and read a text messages or an email. Communication through a text message is thus non-instantaneous and is just like a letter which has not been opened or read (Stone, 2010).The postal rule applies in cases of text messages and acceptance is deemed to have been effected when the message gets out of the control of the offeree, that is, when the offerree presses the send button. In this case Alice’s text message was a response to Khan’s invitation to treat and was thus an offer. She intended to make the offer on Friday at the student Union bar. Sereviano made his offer on Thursday morning therefore his offer was earlier in time. He will have a contract if Mike’s cheque reached later than Thursday or if Khan received Mike’s offer but rejected it. Question 4 Appeal by way of case stated is an appeal based on an issue of law rather than an appeal based on a point of fact (Hillman, 2008).In the English legal system the appeals are heard in The Queen’s Bench divisional court whereby the high court sits in an appellant capacity The concept can only be used by the defense to contest conviction and the prosecution to contest acquittal, It cannot be used to contest a sentence (Mendrick 2007, P. 152) The basis of the appeal is that the lower court arrived at a wrong decision because of making a mistake on a point of law. The Queen’s bench may approve the decision of the lower court or it may send it to the lower court for the magistrate to apply the decision of the bench on the contested point of law (Stone, 2010). The principle was applied in Lynch V DPP (2001) EWHC Admin 882(8th November, 2001) It was heard in The Queen’s Bench Division from The West London Youth Court. The appellant had been found guilty of possessing a lock-knife contrary to The Criminal Justice Act of 1988 section 139. The appellant contested that the magistrate relied on section 139 of the Criminal Justice Act which conflicted with Article 6 of the European Convention of Human Rights and thus imposed a legal burden on the accused rather than placing an evidential burden. The lords held that the transfer of the legal burden was not proportional and it conflicted with the European Convention on Human rights. An evidential burden on the accused would suffice. In SHELDRAKE V DPP (2003) EWHC 273(24 February 2003), The appellant had made an appeal by way of case stated against conviction by magistrates in North East Essex. He was convicted of driving under the influence of excessive alcohol. The court held that the magistrates in the lower court were right in transferring the legal burden and dismissed the appeal. References Burton, S. (2009). Restatement of contract law. St. Paul, Minn, West Pub. Co, pp 45-52. Fuller, L., & Eisenberg, M. (2009). Basic contract law. St. Paul, Minn, West Pub. Co, pp 123-130. Heffey, P., Paterson, J., & Robertson, A. (2006). Validity of contracts. Pyrmont, N.S.W., Law book Co, pp 64-69. Hillman, R. (2008). The richness of contract law: an analysis and critique of contemporary theories of contract law. Dordrecht, Kluwer Academic Publishers, pp 204-210. Mckendrick, E. (2007). Contract law. Basingstoke, Palgrave Macmillan, pp 151-157. Read, P. (2006). Contract law. Casebook. London, HLT, pp 105-112. Stone, R. (2010). Principles of contract law. London, Cavendish, pp 231-239. Read More