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Evaluate the law of formation of contract in the context of modern methods of communication

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Introduction

´╗┐THE DIGITAL AGE? WILL IT AFFECT YOUR CONTRACTS? The law of contract is imperative for the function of commercial activity as it seeks to protect businesses and individuals engaging in transactions. The formation of contract; the beginning stage of when a contract is being formed is governed by strict rules and terms to distinguish the different elements. The statutes regarding offers and invitations to treat are dominated by the 18-20th century where communication was distant and took a considerable amount of time. However, with the turn of the millennium; we have entered a ?digital age? where the use of technology is widespread and interactivity is encouraged which has affected the way we communicate. Thus the purpose of this article is to evaluate whether or not the law regarding the formation of contract must be reformed to accommodate modern methods of communication. The previous commonly used methods of communication were letters which does have problems in the formation of contract. This is because a contract can be terminated if; a reasonable time has passed or if there is a specified time and it has passed. In modern times, the major shift in communication is the fact that it has become instantaneous. For example, a telephone conversation has the same speed as a face to face conversation. Other modern types of communication include text messaging, social networking such as Facebook and Twitter or even Skype and email. ...read more.

Middle

It is the purchaser who makes the offer based on the invitation to treat provided on the website. However, to protect the consumer, the contract is voidable if the basic information described is not given in the invitation to treat. An incident in 1999 indicated the application of the common law rules of offer and acceptance to an advertisement on a website. A large electronic retailer mistakenly advertised televisions for £30 when the actual price was £300. Many customers contacted the retailer ‘accepting the offer’ but it was concluded that the advertisement was an invitation to treat, the purchasers were making the offer and the retailer was entitled to reject those offers. Moreover, the Consumer Protection (Distance Selling) Regulations 2000 state that if a commercial supplier is supplying goods or services to a consumer and the contract is made, for example by exchange of letters, faxes, emails, by teleshopping or by website trading then the consumer is entitled to a cooling off period in which the contract may be ended by the consumer. The consumer has the right to cancel the contract within seven working days of the consumer’s receipt of the goods. The Regulations do not alter the common law rules of offer and acceptance but do allow the consumer some protection when having made a valid contract then having second thoughts. When questioning whether the law on the formation of contract has to be reformed due to advancements in modern communication. ...read more.

Conclusion

Under the current law, the parties terminate offers by making counter offers so there is only one offer in existence from one party at any one time. If all offers stayed open for acceptance despite counter offers then a party could accept an offer that was made at the commencement of negotiations which may be minutes, hours or days before. An accurate record of all offers would be required to ensure there was no misunderstanding over what was being accepted. This would be an impractical way to run commercial life in the UK so the current law appears to be the only alternative. The postal rule has always ensued dispute as to its fairness. The rule appears to be unfair on an offeror who may never receive the letter of acceptance or it is late. The offeror is a party to a legally binding contract without realising. The offeror may have contracted with another party in the meantime so the courts have to deal with three innocent parties and can make a decision that will only be satisfactory to two parties or perhaps even one party. The postal rule is infact justified for the two reasons set out above. Moreover, the offeror is regarded as having the most power and ability to protect him/herself in this situation. If the offeror states the acceptance must, for example be received or must be by face-to-face communication then the postal rule can never apply. Therefore, the rule appears to be a fair compromise as far as it relates to the post. ...read more.

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