Counter Offer and Battle of Forms - Coursework Example

Name Course Institution Date Business Law In business law, the law of contract has six critical elements that must be satisfied before a contract is considered valid. The first element is that there should be an offer. When two parties seek to enter a legal contract, one of them should present an offer to the other. The offer can take the form of money or valuables in exchange for a valuable performance by the second party. As a second element, the second person needs to accept the offer in order to achieve legitimacy for the contract. The valuable performance given by the second party in exchange for the offer is the consideration. This third element is also necessary for a valid business contract. Fourthly, there should be an element of mutuality between the contracting parties. The exchange and the offer should be seen to be commensurate and fair for both parties. The fifth element is that both parties to the contract should possess the capacity to contract in order to make the contract legally enforceable. Minors and mentally disabled persons lack such capacity, thus any contract with them is considered null and void. The last critical element for a contract is that the terms of the contract should be legally acceptable. Every provision for the contract should conform to the law. For purposes of this assignment, this discussion will analyse specific contracts, the circumstances surrounding their offers and acceptance terms, and whether the circumstances affect the validity of the contracts or not. The first contract case is presented below: At his campus office, Bob views an online advertisement on Gumtree offering a second hand iphone 6 that this will be an ideal replacement for his aging iphone 4, after work, he visits the seller at his address. Cecil answers the door, to be greeted by Bob who says, ‘thanks, here’s your £300, I’ll take the iphone now’. Cecil does not want to sell the iphone to Bob, as five minutes earlier he had a call from Tania, his mother, offering £350 for for sale at £300. The advertisement contains the seller’s name, Cecil, and an address in Maze Hill. Thinking the iphone. This case presents several facts that shape the validity of the entire contract. The first element of a contract is the presentation of an offer. The offer can be presented through a letter, a website ad, email, fax, newspaper advert, and behaviour. It is important to understand that the offer is only valid when it is presented in a way that would surely reach the offeree. In this case, Cecil’s presentation of the offer at Gumtree was right. The person placing the offer can also revoke it or take it back on his or her own volition before any acceptance is received. In this case, Cecil took back his offer before Bob could present his acceptance terms. He decided to accept a second offer from his mother to purchasing the iphone 6 at £350. All other aspects of placing the offer are right, as the name and address of Cecil were correctly indicated on Gumtree as Cecil and Maze Hill. Notably, Cecil did not indicate the deadline for which the offer would hold. Had he indicated this, then the offer would have been invalidated on the expiry of the deadline. Since this was not indicated, it would be logical not to evaluate this case of this premise. The offer to sell the iphone 6 was invalidated when Cecil took it back on perception that an acceptance was not forthcoming. He had a legal right to revoke the offer as long as no acceptance had been received prior to his decision for revocation. Other valid reasons for terminating an offer may include the death or insanity of the parties associated to the offer. The offerer may also make a counter-offer that would nullify the terms of contract of the original offer. The second case connected to the law of contract is presented below: On 21 September, Les, in a letter to Davina, his former wife, offers to sell his four year old, Jaguar X-type motor car for £8,000, stating ‘notice in writing required.’ Davina sends a letter to Les on 22 September, accepting his offer, but the letter doesn’t arrive until 29 September. On 28 September, Les, having not heard from Davina, sells the car to Rex, his civil partner, for £8,500. This case involves the delay in the receipt of an acceptance. The means that the acceptance was actually presented on 29th September and not 22nd September as contained in the original letter written by Davina. Les held the right to revoke the offer at any time before receiving an acceptance letter from Davina. By taking back his offer and accepting another offer with a higher value, Les acted within the law. He only needs to demonstrate that at the time he decided to take back his offer to sell the vehicle to Madina, he had not received any acceptance from Madina. Analyse what is meant by the terms ‘counter offer’ and ‘battle of forms’. A counter offer is an offer made by one party in connection to an earlier offer by the second party during the contract negotiation process. Negotiation is intended to create a point of agreement for the parties in a contract. When a counter offer is made, it is a considered as a nullification of the terms contained in the earlier offer. Any contractual negotiations should be based on the counteroffer placed. Therefore, the offeree would place an acceptance in connection to the terms contained in the counteroffer. The earlier offer is deemed unacceptable unless the offerer revises it explicitly. The person who made the earlier offer is free of any liability to honour the terms of the first offer. The battle of the forms in business contracts happens during the negotiation process for a contract. Each of the parties seeks to negotiate the contract based on its own terms. For instance, party A may offer to buy products from party B based on A’s terms while party B may accept the purchase by referring to its own terms. This brings forth a tug-of-war between the contracting parties, with each party seeking its terms to prevail. Under such circumstances, the last party to present contractual terms that have not been rejected explicitly by the recipient party will prevail. Contracts need the presentation of an offer and an acceptance in connection to the initial offer placed. When the two parties agree to the contract, it becomes legally binding. There is need to match the acceptance to the offer in every possible detail in order to eliminate the potential for battle of forms. This conforms to the mirror image rule applicable in common law. This essentially means that any terms contained in the acceptance that contradict the ones presented in the initial offer are deemed as a counteroffer. It would mean that the initial offer has been rejected. The initial offerer can then consider the counteroffer and determine if he or she will commit to it or not. The concepts of offer, acceptance and counteroffer determine the validity of the contract. For instance, a buyer may send a purchase order to buy a table at $500 with his terms and conditions contained therein. Such terms may include the payment to be effected before shipment. Now, suppose the seller accepts and sends a notification for acceptance that has varied terms and conditions accompanied. This would nullify the contract on grounds that the acceptance fails to match the offer. In the event that the buyer decides to pay, then it would be deemed as an acceptance of the counteroffer presented by the seller. Thereby creating a contract. The contractual terms in this case would be those laid out by the seller. The common law advocates for the last shot rule, which stipulates that the last boilerplate document sent between the contracting parties just before performing the contract should govern the contract. This situation still aggravates the battle of forms, as each party would want to be the last one to send its terms and conditions so that its provisions prevail in governing the contract. As a case example, Butler Machine Tool v Ex-Cell-O Corporation, had a row that took was mostly akin to a battle of forms. Butler Machine Tools argued that the contractual binding was established when one of the parties in the contract creates an impression of acceptance to the other party’s terms. The buyer had initially sent an order with a tear-off slip to sent back to them on signing by the seller as an indication of acceptance. The seller then signed the slip and sent it back to the buyers. This meant that the buyer’s terms would bind the seller and the buyer. In a case involving Tekdata Interconnections Ltd v Amphenol [2009],the buyer sent an order to the buyer. In turn, the seller acknowledged that the terms were the buyer’s and instead appended his own terms on the buyer’s order terms. This was sent to the buyer alongside the bought goods and the buyer accepted the goods without rejecting the revised terms presented by the seller. A litigation proceeding brought against the seller upheld that the seller had accepted the revised terms presented by the seller on accepting the goods delivered by the seller. Work Cited Tekdata Interconnections Ltd v. Amphenol Ltd, 2009 E.W.C.A. Civ 1209 (2009). Butler Machine Tool Co Ltd v. Ex-Cell-O Corporation (England) Ltd, 1979 W.L.R.1 401, 1979 All E.R.1 965 (1979). Read More