Legal Analysis - Vladimirs Situation - Assignment Example

Legal Analysis Name: Course: Tutor: Institution: City and State: Date: Question 1(i) Sasha wishes to rent out premises for her business of selling dresses and stumbles on an advertisement placed at notice board of Lew Hoa Shopping Complex claiming availability of shops ready for renting. Vladimir places the advertisement for the shops hoping to attract potential tenants while offering his contact information. On negotiating with Vladimir, he claims that he would lease the premises on a 12 months lease of $1,000 weekly payments but the tenant would meet the electricity expenses. Sasha now claims that Vladimir should observe the terms placed on the advertisement. She claims that the advertisement legally binds Vladimir who should observe the initial terms placed on the advertisement. Vladimir on the other hand does not share similar sentiments since he ignores her claim, goes on to provide further terms regarding the lease, and informs her of his intentions to continue looking for other potential tenants. This issue relates to the law of contract with respect to the rules of an offer, which is an important element of a valid contract (Collins 2003 p. 201). It focuses on the aspect of invitation to treat through the posting of an advertisement expressing the will to lease shops at a complex. Invitations to treat do not qualify as offers since their mere purpose is the invitation of interested parties to make an offer. They also do not express the willingness to form a legally binding contract hence do not qualify as an offer. An invitation to treat may include an advertisement, invitation to tender, auctioneers request for bids, exhibitions of goods for sale, quotation, catalogue, and a prospectus. The issue also addresses the basic rules of an offer where the offeror may change the terms of an offer before acceptance. An invitation to treat expresses the willingness to negotiate with parties hence inviting them to make an offer. By placing an advertisement on the notice boards informing the public of the availability of shops at the shopping complex, Vladimir merely made an invitation to treat (Mckendrick 2014 p.188). The advertisement claimed presence of shops at good prices that included electricity. In making these statements, he attempted to attract potential tenants to gain interest in the shops and contact him for further information. The action of Vladimir aimed at attracting tenants rather than creating a legal relationship with them. He merely informed the public of his willingness to negotiate the terms of a lease once they demonstrated their interests. This therefore does not qualify as an offer whose aim is the creation of a legally binding relationship between the parties involved. In Partridge v Crittenden (1968), the defendant placed an advertisement for the sale of birds, quoting the price but not any information on the quantities for sale. This advertisement therefore offered information of the willingness to accept offers from interested parties. The court ruled that the advertisement failed to offer information on the number of birds available for sale and could therefore not constitute an offer. If the court had ruled the advertisement as an offer, the defendant would have had to sell any amount of birds at the stated price. This presence of insufficient details regarding the subject matter presents itself in this case since the advertisement only states presence of good prices inclusive of electricity. The word good is a relative term and Vladimir could claim that $1,000 qualifies as a good price. It also fails to offer information on the specific details regarding the subject matter, whether all the shops had the same rate of payment and additional expenses related to the premises. It therefore qualifies as an invitation to treat that Sasha responded (Mckendrick 2014 p. 143). During the negotiations, Vladimir made an offer that she did not find attractive. In this case, Sasha would make a counter offer to incorporate terms and conditions she found favourable for lease contract. Through offering a counter offer, it would discharge the initial offer hence enforcing it as the current offer. The burden of acceptance would in this case lie on Vladimir who would take the initiative to accept or reject the offer. The issue addressed in this question relate to an invitation to treat that does not qualify as an offer (Collins 2003 p. 223). The advertisement lacks the important element of an offer that constitutes an intention to create a legally binding relationship between the parties. The advertisement also lacks sufficient information regarding the subject matter and therefore fails to qualify as an offer. This means that the advertisement cannot legally bind Vladimir who has a right to set terms and conditions regarding anticipated contract. This happened when he offered a 12 months lease with a weekly payment of $1000 hence he is not at fault. Question 1(ii) Sasha decides to accept the offer made verbally by Vladimir during their meeting. She drafts a letter on 5th June expressing the acceptance of the offer made to lease a shop as a weekly payment of $1000 and the payment of additional charges including electricity. Despite drafting the letter on fifth, she posts the letter at 4pm on 6th June addressing the letter to Vladimir. At the local rugby club, Vladimir makes an offer to another person, Milo, regarding the shop. In this situation, he offers Milo the same type of offer provided to Sasha but excludes him from the payment of electricity. Vladimir offers to cover the electricity charges as a favour to Milo for the shop to maintain a good image. Milo subsequently accepts the offer on the spot verbally since Vladimir had made his offer verbally. Vladimir learns of Sasha’s acceptance the following day after receiving her letter dated 5th June and immediately calls her to inform her of the current turn of events. The issue in focus relates to the rules of acceptance provided by the law of contract. Acceptance forms one of the basic elements of a valid contract, which merely relate to the acceptance of the offer made (Collins 2003 p. 168). The law requires the communication of acceptance by the offeree since the offeror may withdraw the offer before its acceptance. The acceptance should also occur in the manner specified by the offeror or in a mode that is as convenient as the specified mode. One of the parties used post as the mode of acceptance while the other used verbal communication. Acceptance means that offeree accepts the offer made as well as the terms and conditions included. The scenario also addresses the postal rule that recognizes that an acceptance occurs at the mailing of the acceptance letter at the post office. The acceptance by Sasha therefore took place at 4pm on 6th June rather than the day she drafted the letter. Vladimir specifies the mode of acceptance to Sasha as the email but she communicates her acceptance via post. Communication through the email appears as a more convenient mode of communication and a preferred mode by Vladimir. Sasha fails in her responsibility to communicate by failing to use the specified mode or an equally convenient mode of acceptance. She also fails to call Vladimir to inform him of the acceptance. Without any kind of information on the acceptance, Vladimir makes another offer to Milo verbally. During their discussion, he offers Milo the lease on condition that he made $1000 weekly payments excluding electricity charges. Vladimir makes this offer with an intention to create a legal relationship with Milo making it a valid offer. An offer made orally also qualifies as valid hence; a verbal acceptance also becomes valid (Mckendrick 2014 p.75). Milo communicates his acceptance in the same mode the offer was made which offers a convenient mode of communication due to the instant exchange of information. After receiving Sasha’s letter, Vladimir makes a phone call immediately informing her of her bad timing. He therefore observes due care by informing her of the situation to avoid inconveniencing her plans. In this scenario, Sasha makes her acceptance first since she posts the letter before Vladimir goes to the rugby club to make an offer to Milo. Therefore, both parties had already entered into a contract and there existed a legal relationship. The offer made to Milo in this case is invalid and the contract formed is also invalid. However, Sasha fails to communicate her acceptance in the manner specified and instead uses post, which offers a slower and less convenient mode of communication. Vladimir could therefore refuse to honour her acceptance by claiming lack of efficient communication on her part, which led Vladimir into making another contract to Milo. Acceptance requires communication from the parties involved to become valid. The offeree must make the acceptance in a mode specified by the offeror or in a convenient mode. This aims at the reduction of inconveniences where the offeror fails to receive information regarding the acceptance on time (Furmston & Tolhurst 2010 p.143). Communication also prevents the offeror from revoking the offer or making the offer to another person. Lack of efficient communication may result into losing a favourable offer. An acceptance made by post becomes effective at the point the posting takes place. In this case, Sasha may argue that she made the acceptance first through the post. This would therefore legally bind her to Vladimir in a valid contract for the 12 months lease at the specified rate. Question 1(iii) Roberto wishes to start a small business and rents a shop at the business complex owned by Vladimir. He rents one of the shops fitted as a coffee shop for $1000 per week after accepting the lease. Other shopkeepers begin to vacate the premise, which worries Roberto who also looks for an exit strategy. In a conversation held at the football club, Roberto requests for a rent reduction to which Vladimir accepts a new arrangement for the payment of $500 per week. No formal arrangements take place but Vladimir accepts payments in regards to the new agreement. However, on receiving news on the possibility of Roberto vacating the premise, Vladimir decides to sue for rent arrears $10000. This issue relates to the discharge of a contract through novation that involves the substitution of an existing contract with a new one. It involves the replacement of an obligation to performance by other obligations or adding another obligation to the current obligations. This form of adjustments requires the consent of all parties to the contract. It transfers all the obligations from the original obligor to the new obligor. This creates a new contract similar to the original contract but with different modifications. According to the Alberta case, Herold V British American Oil Co. (1954), the court held that the substitution for a contract discharges the original contract and the obligations in the previous contract cannot bind either of the parties. In this scenario, Roberto offers an offer to Vladimir during the conversation held in a social setting. Vladimir accepted the offer made verbally and both parties agree to adjust the conditions of the contract (Furmston & Tolhurst 2010 p.121). Roberto made the offer verbally and Vladimir accepted it in the same manner making this a valid contract. The obligations adjusted to this effect relate to the reduction of the rent by $500 hence Roberto should pay half the amount originally set. This reduces the amount of obligations for Roberto while mitigating risks for Vladimir who stands to lose rental income after vacation of Roberto’s business. The modification only covers the consideration aspect of the contract but does not touch other terms of the contract. A new contract therefore emerges in this respect and replaces the original contract hence Roberto should not pay the ‘arrears’ since they do not exist. The formation of a new contract may replace the original contract to change the legal obligations of the parties. The original contract becomes nonexistent and the new one takes effect making the new obligations enforceable (Furmston & Tolhurst 2010 p.234). A party can therefore not sue the other based on legal obligations provided by the previous contract. These obligations end after the substitution of the contract with another. The adjustments occur at the consent of the parties to the contract to avoid the infringements of the rights of either party. Agreement therefore forms an important aspect to this form of this adjustment. 2. FALSE 3. TRUE 4. FALSE 5. FALSE 6. TRUE 7. FALSE 8. TRUE 9. FALSE 10. TRUE 11. TRUE References Collins H, 2003. The Law Of Contract. London: Routledge. Furmston M, Tolhurst G J 2010. Contract Formation: Law and Formation. Melbourne: Asbury. Herold v British American Oil Co. (1954) 12 WWR (NS) 333 Mckendrick E, 2014. Contract Law: Text, Cases, and Materials. Melbourne: Francis & Group. Partridge v Crittenden (1968) 1 WLR 1204 Read More