Law, Business and Society

In family/domestic/social relationship the agreement may appear to be contracts, which may still be legally binding. In Balfour v Balfour (1919)4, the argument that there was no consideration to support that husband’s promise to be binding and therefore it was not legally enforceable.

This leaves with the essence of the contract, offer and acceptance. An Offer may be described as the indication by one person to another, it does not have legal significance in that it creates a contract. An offer is made when one party proposes to another that it should buy a particular item on particular terms, including the precise nature of the item, the price to be paid the mode of delivery and the date of payment. An offer can be made in written, orally or by conduct. However it must be communicated to the offeree. The offer must be capable of acceptance, thus it must not be too vague (indistinct). In Scammell v Ouston (1941)5 the agreement is unclear it was held that ouston ordered a van from scamell and when scamell failed to deliver the van ouston sued for breach of contract. it was held that the action failed on the basis that no contract could be established due to the uncertainty of the terms. An offer must be distinguished from invitation to treat and supply of information. An offer may be made to a particular person or to a group of people or to the world at large. If the offer is restricted, then only the people to whom it is addressed may accept it, but if the offer is made to the public at large, it can be accepted by anyone. Carlill v Carbolic Smoke Ball Co (1893)6 Carlill made a retail purchase of one of the defendants’ medicinal products: the Carbolic Smoke Ball. It was said that those use the product in specified way for at least two week from catching flu. The company promised £100 to those that will still suffer from flu after taking their product and when Mrs Carlill claim the £100 because she still had the flu after taking the Smoke ball she was refused so she sued for breach of contract but the company said that there was no contract as the advert was too vague to amount to the basis of a contract there was no time limit and that there was no way that the customer has used the ball.

Acceptance of an offer creates contractual relation. An acceptance is a communication to the offeror of an unqualified assent to both the terms of the offer and to the implied invitation in every offer that the offeree commits himself or herself to a contract. Acceptance may also be by way of a counter promise or promise or by way of performing acts which are specified in the offer, the former is called bilateral and the latter unilateral contract.

Alison is a bookseller who specializes on antiques books. She make use of the ‘books-unlimited’ website on the Internet, which has a facility for paying by credit card on-line. On 1st February Alison advertises a first edition of Shakespeare’s Sonnets on the web for sale for £7000. This then becomes Invitation to treat which is statement made to others inviting them to make an offer, an offer to offer, an offer to negotiate. Therefore it is up to Alison to extend the invitation and to bound to accept any offers made to her.  However evidence of this problem indicates that she does sell the book to Ethel who visits Alison shop and buys the Shakespeare book, paying by cheque on 7th February. However in some example of common invitation to treat such as the display of good in shop display in Fisher v Bell (1961)7 case a shopkeeper was prosecuted for offering offensive weapon for sale, having flick-knives on display in his window. It was held that the shopkeeper was not guilty as the display in the shop window was not an offer for sale but only an invitation to treat. In first stage is trying to identify an offer, an advertisement of any kind would generally not amount to an offer, and merely suffices an invitation to tender, there are exception to treat may not be accepted. Yet it does welcome a party to make an offer. However in respond to invitation it is logical that a reader of the advertisement may respond with an offer, which in this problem Billy does.

Billy v Alison- Billy is the first person who puts forward an offer on 2nd February through e-mail accepting that he will buy the book for £7000 but before accepting the offer fully and putting forward the payment he request Alison in his e-mail that in the description of the book says that the book is slightly marked therefore he asks Alison to tell him how many pages are affected and whether the marking are in pen or pencil. This then becomes request for further information or supplies of information the case Harvey v Facey (1893)8 demonstrates this point. It was held that the defendants’ telegram was not an offer capable of being accepted by the plaintiff. It was simply a statement of information. Billy not having had any respond pays Alison £7000 by credit card on-line on 5th February. In this problem there is no contract between the tow parties Billy and Alison this is due to the general rule of acceptance that acceptance must be communicated to the offeror. As a subsequence of this rule, silence cannot amount to acceptance. The problem indicates that there is no sign of Alison communicating with Billy that she accepts Billy’s offer to buy the book. In Felthouse v Bindley (1863)9 case an uncle had been negotiating the purchase of his nephew’s house and eventually wrote offering to buy it at particular price when house mistakenly sold by an auctioneer, the uncle sued the auctioneer in conversion. It was held that the uncle had no cause of action as the house did not belong to him and that acceptance could not be imposed on the offeree on the basis of his silence.

Clive v Alison- the next offeror is Clive who e-mails Alison on 3rd February, stating that she really likes the book and puts on £6,500 offer in cash, she asks Alison for her account details. Alison immediately e-mails Clive in reply that she cannot go lower than £7000. Clive then replies through e-mail accepting to pay £7000 and puts on-line credit card payment. For a legal contract to take into action the acceptance must be unconditional. if new response to an offer is introduced the offer becomes a counter offer. This has an effect on rejecting and original offer. In Clive’s case as soon as she e-mails Alison and offers £6,500 the offer then becomes counter offer. Express rejection of an offer has the effect of continuing the offer. This is outlined in Hyde v Wrench (1840) case10 Wrench offers his farm for sale for £950, which Wrench rejected. Hyde’s counter offer had effectively ended the original offer and it was no longer open to him to accept it. Therefore in Clive’s case the offer is ended to him as soon as he offers £6,500 to Alison even though he puts on-line payment through.

Daisy v Alison- on 4th February Daisy comes into Alison’s shop and asks her to reserve the book for her until 10th February. Alison agrees. On 9th February Daisy comes into the shop to buy the book but was told by Alison that it has been sold. It can be argued in Daisy’s case that she might have a contract, as there is original face-to-face conversation, which Alison and Daisy negotiate and that Daisy comes in to the shop to buy the book in the right time but the book was already been sold. However it can be seen as a past consideration. In past consideration a particular action is undertaken without any promise of payment, a following promise to pay is not actionable. If there is a request to carry out the act a commercial situation when a promise to pay can be implied, the following promise may be enforceable. In Roscorla v Thomas (1842)11 a horse was sold and the seller after the sale gave a warranty as to its quality i.e. that the buyer did not abandon it where as it was, there was no action on the warranty. It outline that if Mrs McArdle had actually been pained by a cheque she would not have been able to sue it under s 27 of bills of exchange Act 1882 because her acts were gratuitous and did not create an antecedent debt or liability. Therefore in according to past consideration Daisy will not have a valid contract with Alison.

To summaries the whole of this problem it can be seen that Billy and Clive has no contract with Alison. Alison sells the book to Ethel and refunds Billy and Clive on 8th February and e-mails them that the book is no longer available. In Billy’s case there is no communication of acceptance as she request for further information/supply of information, which Alison does not reply to. For a contract to take place one of the general rule of contract is that acceptance must be communicated to offeror which in Billy’s case there is no evidence of Alison communicating with Billy that she accepts his offer. Therefore under the eyes of English law there is no contract for Billy. In Clives case there is also no evidence of Alison accepting the offer as Clive changes the original offer to a counter offer which gives Alison the right to reject as one of the counter offer rules is that once its changed it cannot go to its original price. This clearly indicates that there is no contract between Clive and Alison. In Daisy’s case there might be possibility that she might have a contract with Alison as the problem clearly indicates that Alison agrees to reserve the book for her, which means that the acceptance is communicated. However the possibility that she might not have contract with Alison is higher as past consideration comes into action in this situation and in the problem there is not much of evidence that proofs that Alison will reserve the book for Daisy for sure. There is not enough evidence such as written and signed evidence or any payment such as deposit made that Alison will reserve the book unless Daisy argue that contracts between two parties does not have to be written it can be done orally.