As written in Law for business (Keenan and Smith, 2003), a contract may be defined as an agreement enforceable by law between two or more persons to do or abstain form doing some act or acts, their intention being to create legal relations and not merely to exchange mutual promises, which has six elements: an intention to create legal relations, agreement, consideration, form, definite terms, and legality. It is not too difficult to learn that, the issue in the case discussed here satisfies all the six key points which makes it a legal contract, except for the ‘agreement’ (offer, acceptance, revocation, and communication) element, on which the arguments and conflicts will be focused. From the claimant’s perspective, Eifion would argue that there had been already a legally binding contract before Bethany revoked the offer, so that all the economic losses to he or his company should be compensated by Bethany; whereas, from the defendant’s perspective, Bethany would argue that the revocation came into effect prior to contractual relation being established, so that she is not liable for the expenditure losses. Now, let’s look at the both sides in turn.
On the one hand, Eifion, the claimant, would hold the fact that there was definitely an offer in the form of written letter from Bethany, who intentionally tried to create a legal contract. It is also definitive that the written offer, irrespective of the method of communication, was successfully and adequately communicated to him (the offeree). As Eifion was very satisfies with the terms offered in Bethany’s letter, he ‘positively’ communicated his acceptance by posting a written letter back to Bethany. Therefore, Eifion could argue that, without any knowledge of Bethany’s revocation via E-mail, he could and only could deem the offer as still open. The general rule, which could support him, is that acceptance takes effect when the letter is posted, even if it is delayed or is lost or destroyed in the post so that it never reaches the offeror. (Adams vs. Linsell, [1818]) However, he needs to prove that it was reasonable for his acceptance to be by post under the circumstances (Keenan and Smith, 2003), otherwise the post rule doesn’t apply (he could have phone Bethany directly as the acceptance of the offer, for it would be much quicker). (Tenax Steamship Co vs. Brimnes [1975]) What Eifion could argue here is that ‘the offeror may somewhat ‘stipulated’ a mode of acceptance’ (Eliason vs. Henshaw [1819]), which means as the offer was transmitted in letter, it implied to him that a written acceptance was to be expected. It also needs to be noted that Bethany’s revocation was communicated via E-mail, which is still largely a matter of informed surmise and untested in the courts. However, the time when Bethany sent the E-mail could be the crucial point in this argument, because if it was after the plaintiff accepted the offer by post, the revocation would be an invalid cancellation, so that the establishment of the legal contract would have been finished. Referring to Law for business (Keenan and Smith, 2003), to be effective, revocation must be communicated to the offeree before he has accepted the offer. As there is little information concerning the exact time when the actions took place, we simply consider it as ‘arguable’ here in this case. Nevertheless, Eifion could still argue that the revocation of an offer is not effective until it is communicated to the offeree / arrival (Byrne & Co vs. Tienhoven & Co [1880]). Although Bethany wrote an E-mail to cancel the offer, she didn’t make sure that Eifion had got and read it. The same situation happened in Byrne & Co vs. Tienhoven & Co [1880], in which the mere posting of a letter of revocation is not communicated to the person to whom it is sent. Despite the controversy of internet communications, it is definite a good point Eifion could argue. Last but not least, Eifion needs to give strong evidences that the company has been incurred certain losses, especially financial costs and expenditures.
On the other hand, undoubtedly, Bethany, the defendant, had intentionally made an offer to create legal relations with Eifion by post, and the offer was communicated clearly and successfully to the claimant. There are a few points that she could argue. First of all, irrespective of the controversy over internet communication, the ambiguity in the time of the revocation will earn her a lot of credits, if Bethany could prove that it was before Eifion accepted the offer when she sent the revocation E-mail. If it is so, there wouldn’t have been any legally binding contracts so that she could simply escape from any prosecutions, because ‘acceptance must take place when the offer is still open and an offer may be revoked at any time before acceptance’, as written in Law for business (Keenan and Smith, 2003). Nevertheless, for the sake of inadequacy of information here, we could only end this point with possible scenarios like that. Secondly, the controversial and dynamic property of electronic communication itself couldn’t comply neatly with the old contract law, which might give some excuses for Bethany to argue about. Basically, Bethany would argue that the revocation was communicated by E-mail, which transmitted the withdrawal in seconds and should obviously be different from the postal principles in contract law. There are not definite terms in contract law on the internet communication. Therefore, it is not definitely defined that either when Bethany sent the withdrawal E-mail to Eifion should be deemed as the moment of revocation turned to effect, or the moment when the E-mail is read by Eifion is the appropriate interpretation of the existing contract law. Thirdly, Bethany could also argue that the E-mail was sent to Eifion during office hours, so it was the negligence of him who didn’t check the E-mail led to bad consequences (financial losses). Moreover, if Eifion failed to give convincing and satisfying reasons why he chose to write back as an acceptance instead of instantaneous communication, the postal rule wouldn’t have applied and his acceptance would be invalid. Fourthly, under all circumstances, Bethany has all the rights to deny any responsibilities for the opportunity cost (the ‘would-have-earned’ income) incurred by Eifion’s company, but at most accepting merely the pure costs and financial losses of producing the offered programmes which Eifion’s company has suffered. The reason for this is because of the property of the civil law again: as the civil law aims merely to ‘compensate’ people rather that ‘punishment’, only the losses and damages should be the matter in the case instead of ‘fines’.
All in all, till now, hopefully, we have had rough ideas about the scenarios in the case and some of the possible arguments both sides of the case would hold. Yet, it is too simplistic to draw a conclusion of who is going to win (defendant or claimant), because of the complication of the contract law itself and the ‘situations’ (how judge interprets the law in court, the controversy of the electronic communication, and the limitation of the information given here). Nevertheless, we could reasonably infer that if considerable amount of financial losses have been incurred, it is more likely that Bethany ends up with certain compensations to Eifion in the particular circumstances. However, as stated before, it is only speculations; it all depends in practice!
References
Keenan, D. and Smith, K., (2003), Law for Business, Pearson, Longman.
Bibliographies
Adam, A., (2003), Law for Business Student, Person, Education.
Consilio, (2003), Review: Law of Contract – offer and acceptance (online), , (accessed on 20th December, 2003), Semple Piggot Rochez.
Fifoot, C. and Farmston’s., (2001), Law of Contract, Butterworths, LexisNexis, UK.
Keenan, D. and Smith, K., (2003), Law for Business, Pearson, Longman.
