Principals of Law.

July 3rd        Tom replies to Mary’s offer with “I accept your offer to supply one second hand textbook for £20.00”

        This is called a Conditional Acceptance, which amounts to a rejection. Any acceptance that includes in it new terms or prices is conditional. It also acts as a counter offer, offering to pay £20.00 for one book. As before this destroys the offer before it.

July 6th        Mary replies to Tom’s letter with a counter offer of £25.00 for one book. She also states that she will dispatch her book upon confirmation, i.e. Acceptance.

July 15th        Mary states in a letter to Tom that she has not yet received confirmation of her offer of £25.00, so will be happy to accept Tom’s previous offer of £20.00 for one book. She dispatches the book and states in the letter “Please pay within 7 days of receipt”.

July 16th        Tom goes on holiday for two weeks.

July 30th        Tom replies to Mary that he no longer requires the book and has been on holiday for the previous two weeks.

Now to analyse the case. I believe a contract does not exist between Tom and Mary. This is due to the fact that Mary accepted Toms offer to supply him one Second hand book for £20.00, after she had made a counter offer of £25.00. This counter offer had the effect of destroying Tom’s £20.00 offer. In effect Mary had accepted an offer that no longer existed, and thus no contract was formed. If Mary had wished to sell the book to Tom for £20.00 she would have had to send an offer to Tom and await acceptance. I can back up this argument with the precedent of Hyde v Wrench (1840):

“Wrench offered to sell his farm to Hyde for £1000. Hyde replied with a counter offer of £950 which was refused. Hyde then said that he was prepared to meet the original offer of £1000. It was held that no contract had been formed. The counter offer of £950 had the effect of rejecting Wrench’s original offer.”

The second problem arises when Mary accepts mere silence as Tom’s confirmation of wanting the book. It is noted in the case of Felthouse v Bindley (1862) that mere silence is insufficient to form acceptance / confirmation of an offer. This case established that the offerees silence or failure to act cannot constitute a valid acceptance. I believe the above point show that a contract is not present.

With respect to the books present ownership and location, through Mary's own error in the acceptance of a non existent offer, and the request of payment for the book in 7 days, she has entered into ‘inertia selling’. This is where a seller sends unsolicited goods (not asked for) goods to a person, stipulating that if they do not reply within a specified time (7 days in this case) the goods are accepted and payment of the noted amount is due (£20). But the Felthouse rule applies, and mere silence is insufficient. Control of inertia Selling is part of Unsolicited Goods and Services Act 1971 and amended in, Consumer Protection (Distance Selling) Regulations 2000 . These regulations state:-

“If unsolicited goods are sent to a person ("the recipient") with a view to his acquiring them….. The recipient may, as between himself and the sender, use, deal with or dispose of the goods as if they were an unconditional gift to him.
The rights of the sender to the goods are extinguished.”

They Outlaw Inertia selling, and the recipient of such goods can treat them as ‘unconditional gifts’. It is also an offence to request payment for such goods or services, punishable by a fine.

To round up the case, no contract was entered into because the counter offer destroyed the £20 offer. Mere silence cannot amount to acceptance. And finally Tom is not required to return the book to Mary as she entered into inertia selling, so the law views the book as an unconditional gift.

In answer to the question, ‘What remedies does Mary have against Tom is any?’ She has none at all for all the above reasons.

Task 2

1. Spartacus graduates with 1st class honours. Is Sir Harry bound in contract to pay him?

In order to justifiably analyse this case certain terms must firstly be defined. A promise is “A voluntary arrangement by one person to another for the performance, or non performance of some particular thing. It differs from a contract in that a contract involves the idea of mutuality.” (Mozley and Whitley). The promissor is the person who makes a promise. The promisee is the person who receives the promise. The terms of this arrangement involve an executory promise; this means the promise is for actions in the future.

As seen in the previous task, the classical contract model sees a contract as an arrangement to do something in return for a promise (for payment, goods, services, etc) It also states that consideration must present, and be passed in both directions. If one closely looks at the example of Sir Harry and Spartacus, the promise is extremely obvious. Sir Harry promises to pay Spartacus £1000 if he graduates with 1st class honours. The consideration in this case, however is much more difficult to define. As stated, two considerations must be present. The consideration between Sir Harry and Spartacus is that Spartacus will receive £1000 on graduation. But it can be seen that no consideration exists between Spartacus and Sir Harry. This, in the terms of a legally binding contract means that no contract was formed, because no due consideration was present in each direction.

This argument can be backed up by the case of Tweedle v Atkinson (1861):

John Tweedle and William Guy agreed that they would pay a sum of money to Tweedle’s son, who had married Guys Daughter. William Guy died without having paid his share, and William Tweedle sued his late father in Law’s executor (Atkinson). This claim failed because he had not provided any consideration for the promise to pay”

The rule of consideration in contract moving from promisor to promisee is closely related to the doctrine of Privity of Contract. The doctrine states that a person cannot take advantage of, or be bound to a contract which he was not a party, i.e. like a promisee providing no consideration.

Certain other facts also relate as to why no contract is present between the parties.  An arrangement between relations can be seen to be internal family business and therefore non contractual, as in Balfour v Balfour (1919), where the judge ruled that an agreement between a husband and wife did not induce a contract. There are also certain situations where this does not apply, as in the next task. It is also noted that actions forming a gratuitous arrangement i.e. the giving of a gift upon graduation, do not form a contract

In response to whether Sir Harry is bound in contract to pay Spartacus, the answer is no. This is mainly due to the lack of consideration on Spartacus’ behalf, and that a promise does not constitute a contract unless in special circumstance (promissory estoppel).

2. Suppose Sir Harry had said “If you buy a suitable trailer and boat I will reward you with £1000”. Is Sir Harry bound in contract to Spartacus

This case revolves largely around the intension of Sir Harry to be bound, and the communication of acceptance of offer. For the benefit of this case two types of contract must be defined. These are:

1. Bilateral Contract- This is where communication of acceptance is necessary to form a contract.
2. Unilateral Contract- ‘Acceptance is contemporaneous with, and occasioned by commencing performance’

To see if a contract exists we must show whether each essential constituent part exists.

1. Agreement- There was an agreement between Sir Henry and Spartacus, that if a suitable boat and trailer were purchased, £1000 payment would be received.
2. Consideration- Sir Henry would receive the purchasing of a suitable boat and trailer as he wished, and Spartacus would receive £1000 for purchasing the items.
3. Acceptance- Acceptance here is in the form of commencing performance of the requested task, i.e. a unilateral contract.

The validity of such a contract, one formed through commencement of a requested act being an acceptance, (unilateral ‘if’ contract) can be backed up by precedent of the case Carlill v Carbolic (1893). An offer was made in the form of an advertisement and the performance of certain conditions by the plaintiff, stipulated in the advert constituted an acceptance. In this case it was to pay £100 to anyone who became ill with flu whilst using Carbolic Smoke Balls as prescribed on the instructions. This case shows that acceptance need not be conveyed.

As Sir Henry, in his offer, states that he will ‘reward’ Spartacus with £1000, a second case can back up the validity of the formation of contractual obligation. Earlier than Carlill v Carbolic several reward cases emerged. In the case of Williams v Cardwine (1833) it was held that published ‘Reward’ offers i.e. The offerer to pay anyone who performs the conditions of publications, and thus accepts the offer, must be payed the published sum. The only difference between this and the case of Sir Harry is that the offer is only to one person.

In answer to the initial question, I believe Sir Harry is bound in contract with Spartacus, and therefore must pay him if he buys a suitable trailer and boat.

Cases

Hyde v Wrench (1840) 3 Beav 334                                                        3

Felthouse v Bindley (1862) 11 CBNS 869                                                3

Tweedle v Atkinson (1861) 1 B&S 393                                                5

Lampleigh v Braithwaite (1615)                                                        5

Balfour v Balfour (1919)                                                                5

Carlill v Carbolic Smoke Ball Co. (1893) 1 QB 256                                        6

Williams v Cardwine (1833) LJNS 101 ; 4B                                                 6

Bibliography

Mozley and Whitleys Law Dictionary, J.E Penner, Butterworths, 12th Edition, 2001

Business Law, Denis Keenan, Longman, 6th Edition, 2002

Law for the Construction Industry, Stephanie Owen, Longman, 2nd Edition, 1997

Procurement Law, R. W. Craig, Blackwell Science, 1st Edition,  1999

http://www.hmso.gov.uk/si/si2001/20012778.htm

http://www.hmso.gov.uk/si/si2000/20002334.htm#n12

http://www.lexisnexis.com        (various case details)

                        

        

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