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Contract Case Study

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LAW CASE STUDY -Adnan Iqbal For a legally binding contract we need an offer and acceptance. An offer is an expression of willingness to be bound by the terms of offer once it is accepted. The offer may be made in writing, by words, by conduct or by a mixture of all three. It can be made to one person, a group of people or to the world at large as in Carlill-v-Carbolic Smoke Ball Co. the facts were that the defendants advertised that they would pay �100 to anyone who contracted influenza after having purchased and used one as directed and claimed the reward. The defendants urged, inter alia, that it was impossible to contract with the whole world. The curt held that the advertisement constituted an offer to the world at large, accepted by the plaintiff, who was entitled to the �100. An acceptance is a 'mirror image' of the offer, with no variation of the terms of the offer. An acceptance must be communicated (Felthouse-v-Bindley) and can be in any form e.g. writing, words or conduct or a mixture of all three. On 20th June Edward offered by telephone to sell his car to Fred for �5,000 and said he would send a messenger for Fred's reply on 27th. ...read more.


It was held that he was not obliged to do so, since in making a counter-offer of �950 the buyer had at the same time refused the original offer, thereby terminating it. A request for more information leaves the original offer open until withdrawn by the offeror. An enquiry of this kind arose in the case of Stevenson-v-McLean. The facts of this case was after following an offer to sell an iron, the buyer sent a telegram asking whether credit terms would be available, as this did not change any existing terms, but merely asked for more information on the agreed price, it did not constitute an offer but an enquiry. From looking at the cases it is clear that the fax from Fred to Edward was not a counter offer but merely a request for more information. From looking at paragraph three, we can see that Edward received the fax at 10am on 22nd, but he immediately sold the car to George. Although an offer can be revoked or withdrawn, by the offeror at any time, it must be communicated to the offeree before acceptance takes place. The offeror has taken the responsibility of starting the negotiation and cannot simply change mind. This is illustrated in the case of Byrne-v-Van Tienhoven, where it was held that the revocation of the offer was not effective because it was only communicated on October 20th, which was after the acceptance of the offer on October 11th. ...read more.


So it is important to establish whether by acceptance post is reasonable in a particular case, because the postal rule will then apply. Seeing as the post was used to communicate the acceptance then the postal rule applies, which is that an acceptance by post is effective as soon as it is posted providing that the letter is correctly addressed. The first example of the use of the postal rule was in Adams-v-Lindsell, where the defendants wrote offering to sell to the plaintiffs some fleeces of wool, asking for a reply 'in course of post'. The letter containing the offer was misdirected, and late in arriving. But when it did arrive the plaintiffs posed an immediate acceptance back to the defendants. However, when no reply was received by the expected time, the plaintiffs sold the wool to someone else it was held that a valid acceptance had been made when the plaintiffs posted their reply, leaving the defendants in breach of contract. This means that a contract was made between Fred and Edward, as Fred had posted a reply accepting the offer which although was lost in the post was still a valid acceptance, and so Edward was in breach of contract by selling the car to George. Adnan Iqbal. ...read more.

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