Vladimir and Roberto Case Analysis - Assignment Example

Running header: Business law Student’s name: Instructor’s name: Subject code: Date of submission Question 1 a) Case brief Sasha is interested in finding a venue to sell her range of dresses. On the other hand, Vladimir has a vacant shop in his Lew Hoa Shopping Complex which his agent advertises on the Lew Hoa Shopping complex noticeboard. The advert promises good rates electricity included. Thus on seeing the advert, Sasha calls Vladimir to organize or a meeting which takes place on 1st June. Vladimir states that his terms for lease are $1,000 per week for a 12 month lease with the tenant paying all outgoings including electricity. Sasha disputes this saying that the advert promised that electricity will be included in the lease rate. Vladimir stands his ground stating that that is his offer and asks Sasha to go and think about it. The issue The issue is whether Sasha would succeed in a claim to the effect that Vladimir should be bound by the advertisement on the noticeboard. This would depend on whether the contents and hence the advert constituted an offer in which case Vladimir would be bound by it or an invitation to deal in which case it is not enforceable. The law of contract has various provisions on offer and acceptance as well as invitations to treat which are discussed below. The relevant law The law of contract terms an offer as a statement of terms on which the offeror agrees to be bound. On the other hand, an invitation to treat does not have any legal significance. Generally, the law treats an advertisement as an invitation to treat. However, the court will consider whether the advertisement demonstrates a clear willingness to be bound without any need to prolong negotiations as was held in Partridge v Crittenden1where the price stated implied that it was inviting different bids by stating ‘or nearest offer’. In Leonard V. PepsiCo2, the court held that an advertisement can be deemed an offer and hence enforceable if it met certain conditions including being sufficiently definite in terms in regard to descriptions, quality, quantity and price. The advertisement must have been communicated to a specific person or group of people though an advert may constitute a unilateral contract and hence be enforceable as was held in Carlill v Carbolic Smoke Ball Co3 where an advert was held to have constituted a unilateral contract and hence was enforceable on the company. The terms of the advertisement must also show that the advertiser intended to enter into a contract as stated above. Analysis The advert in this case was not sufficiently definite in terms of description and price. In fact, the shop has not been described while there is no mention of the exact price that will be charged. Though there is a statement ‘Electricity included’ it is not clear whether the advertiser meant that electricity will be included in the rates or that the shop has an electricity connection. By this, it is clear that the advertisement does not demonstrate a clear willingness to be bound without any need to prolong negotiations. In appreciation of this, Sasha asks for a meeting where Vladimir states specific terms. Had the advert been sufficiently definite as to all the terms, Sasha would have succeeded in establishing that it had been an offer had she done something to indicate acceptance for instance by paying the price. On the contrally, Sasha declines the offer given by Vladimir hence establishing a new offer. This implies that Sasha takes the advert to have been an invitation to treat and that is why she is negotiating with Vladimir regarding electricity as part of the terms. Conclusion It is clear that the court would treat the advertisement in the noticeboard as an invitation to treat mainly owing to the fact that it was not sufficiently clear as to terms. As such, Vladimir cannot be bound on the terms and hence Sasha should accept to pay electricity separate from rates as offered by Vladimir. b) Case brief Vladimir had asked Sasha to promptly decide whether she would accept his offer and communicate her decision through email. This was bearing in mind that there was still a lot of interest on the shop while Vladimir would continue looking for potential tenant. Sasha decides to accept the offer four days later and prepares a letter of acceptance on 5th June and posts it on 6th June at 4pm. Meanwhile, Vladimir makes an offer to Milo which he accepts on the same day the letter is posted and hence a contract is established. Vladimir receives Sasha’s letter of acceptance on 6th and he immediately telephones her informing her that she has been late reminding her that he had told her to be quick. The issue The issue concerns whether Sasha can succeed in getting to lease the shop. This will depend on whether her acceptance was valid and whether it was communicated in the right form and in the right manner in which case, Vladimir would be bound by the acceptance and hence compelled to lease the shop to Sasha. The elements of acceptance that need to be fulfilled for the offer to be valid in accordance to the law of contract are discussed below. The relevant law The contract law refers to acceptance as an equivocal statement either written, oral or by conduct by offeree agreeing to the offer. In the case of Crown v Clarke4 it was stated that no particular form o acceptance is required for acceptance to be valid. However, where the offeror has specified a method of acceptance for instance by post or email, acceptance ought to be through the method or a method no less effective from the offeror’s method. Where the offeror has used explicit words for instance “by email and by email only”, then the particular method has to be used as was held in Hyde v. Wrench5. However, acceptance could be inferred from conduct as was held in Brogden v. Metropolitan Railway Company6. Where the offer is accepted by post, the contract will be in force at the moment that the letter of acceptance is accepted as was held in Adams Lindsell7 . However, the offer can be terminated on the grounds that the offeree refused to accept the offer within the specific period suggested by the offeror. Analysis Sasha accepted the offer through post. However, the acceptance was communicated five days later. It is worth noting that Vladimir had requested Sasha to specifically use email since she needed to be quick as there was a lot of interest in the shop while Vladimir was looking for other interested persons. As such, Sasha can be deemed to have acted slowly and also used a means that is not as effective as email in communicating acceptance. Had she for instance called, this would have been an equally effective method and another contract would not have been entered into. As such, though the exact offer is accepted , it turns out that it has been accepted very late given the circumstances surrounding the offer and acceptance as stated above and bearing in mind that Sasha had initially disputed the terms of the offer thus giving an indication that she may not accept the offer. As such, the courts will most likely determine that acceptance was time barred. Conclusion Arising from the above analysis, it is highly likely that the courts will determine that the acceptance was time barred and with a less effective method given that Vladimir had asked Sasha to be quick and even suggested email as an effective method of communicating acceptance. As such, Sasha should look for another alternative as a claim to have Vladimir give her the lease is likely to fail. c) Case brief Vladimir and Roberto established a lease contract with the terms of $1000 per week. However, after some times, the conditions of business in the complex deteriorated and Roberto sought Vladimir to allow him pay a reduced rate of $500 per week. Vladimir promises to accept the reduced rate verbally and no formal document is signed. Vladimir has paid the reduced rate for 20 months which Vladimir has been accepting. Vladimir now wants Roberto to pay the arrears. The issue The issue is Roberto’s legal position. It concerns whether Roberto should pay the arrears or should rely on the promise made by Vladimir to claim that Vladimir should not be allowed to require payment of the arrears. This is an issue of promissory estoppel regarding whether the courts will estop Vladimir from claiming the arrears or not. The elements of promissory estoppel that make the promise enforceable are discussed below. The relevant law The relevant law in this case is the doctrine of promissory estoppel since Vladimir made a promise on which Roberto relied to pay the reduced rate. For the promise to be enforceable, the doctrine of promissory estoppel sets forth a number of elements that must be present. There needs to have been either an existing or anticipated contract between the promisor and the promisee8. The promisor must have made a promise or a representation9. The promisee must have relied on the promisee to act or fail to act and hence suffered some detriment as a result. The promisor must have been aware of this but failed to stop the detriment and hence it would be inequitable for the promisor to renege on his promise10. Thus, the promisor would be estopped from failing to fulfill his promise. Analysis It is clear that a lease contract existed between Roberto and Vladimir and is the basis of the promise in contention. It is also clear that Vladimir made an oral promise to Roberto agreeing to accept reduced lease rates. Roberto hence acted on this promise and started paying the reduced rates to the effect that the arrears in question have come up. It is also worth noting that Vladimir has accepted the reduced rates for the past 20 weeks without complaining. As such, it is clear that the courts would refer to the doctrine of promissory estoppel to estop Vladimir from requesting for the rates arrears. Conclusion Based on the analysis above, it is clear that the courts are highly likely to evoke the doctrine of promissory estoppel and hence estop Vladimir from claiming the arrears. As such, Roberto ought not to pay the arrears but refer to the doctrine of promissory estoppel as well as the facts of the case in successfully arguing his case. Question 2 1. If I display prescription drugs with the price stated on each cardboard pack of drugs, I am making an offer to any customer who walks in. (TRUE ) 2. There is no limit to the number of people that I can make an offer to. (TRUE) 3. There is no requirement for an intention to create legal relations in order for there to be a valid contract. (FALSE) 4. In promissory estoppel there is no requirement for the promisor to unfairly break a promise.(FALSE) 5. For equitable estoppel to apply parties need not be in a contractual relationship. (TRUE ) 6. The common law has provided solutions to all situations. (FALSE) 7. In the case of Donoghue v Stevenson the court held that the manufacturers of the ginger beer owed no duty of care to the plaintiff as no contract existed between the manufacturers and the plaintiff. (FALSE). 8. Historically, speaking legislation existed in Australia long before common law. The position is the reverse as far as the UK is concerned. (FALSE) 9. The Australia Act 1986 (Cth) was passed in order for the States and Territories to maintain effective control of the Commonwealth.(TRUE) 10. The Executive arm of the government in Australia is entrusted with the task of administering the laws of Australia. (TRUE ). References: Cohen, L, 2000, Choice of a new generation: can an advertisement create a binding contract, Missouri Law Review, vol.65, no. 7, pp. 2-20. Ewan, M2012, Contract law: Text, Cases, and materials, Oxford, Oxford University Press. Carter, J2012, Contract Law in Australia, Sydney, Prentice Hall Australiancontractlaw.com, 2015, Agreement, Retrieved on 4th May 2015, from; http://www.australiancontractlaw.com/law/formation-agreement.html ACL, 2015, Consideration, Retrieved on 4th May 2015, from; http://www.australiancontractlaw.com/law/formation-consideration.html Poole, J2014, Contract law, UOP, Oxford. Read More