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it must be a ‘mirror image’ of the offer: The offeree has to agree with all the terms within the offer, and thus cannot introduce new terms.
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Acceptance must be firm: Due to the fact that a conditional acceptance isn’t binding the acceptance has to be clear.
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Acceptance must be communicated to the offeror: A variety of rules are related to communication.
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(Adams, A (2010). Law for business students. 6th ed. London: Pitman Publishing imprint. 72-74.)
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(Chwee Kin Keong and Others v Digilandmall.com Pte Ltd [2005] 1 SLR 502; [2005] SGCA 2)
In this case the defendants had made an error in pricing HP Laserjet printers on their website shop, mistakenly pricing them at $66 instead of the normal price of $3854,00. During the night that the pricing error was advertised, over 4000 HP Laserjet printers were ordered from the website. Naturally it didn’t take long for the defendant to notice the error and quickly changed the advertisement and contacted all the people that had ordered the printer, and told the purchasers they would not be receiving their product for the advertised price. From this situation the plaintiff stated they were entitled to go on with their claim and went to court.
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The court ultimately stated that the purchasers were aware of the pricing error but went on to buy the printer anyways as the judge also states here:
“The first [appellant’s] purchase took place soon after [his] conversation with Desmond where Desmond had in no uncertain terms pitched the price of the laser printer between $3,000 to $4,000. This final mass e-mail only reinforces my view that the first [appellant] consistently and continuously entertained the view that the price posting on the HP website was a mistake.”
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The judge also stated, that do to the education levels of the plaintiffs and the field of employment, they should be able to estimate the normal pricing of such a printer. The plaintiffs were ultimately not allowed to succeed with their claim.
This online form of offer and acceptance carries big risks with it, mainly due to the fact that computers or payment systems generally automatically process the offer and acceptance. Furthermore because it is completely automatic, there is no control of people keeping an eye on system errors before an offer is approved such as the one mentioned above. If there was an individual keeping an eye on the offer in the Chwee Kinkeong vs. Digilandmail situation, this would have never occurred.
)Adams, A (2010). Law for business students. 6th ed. London: Pitman Publishing imprint. 74-75.)
1c)
the Consideration is generally defined as the as the constitute of benefit of one party or a detriment of the other, which makes certain rules required.
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Consideration must not be past: A past consideration means that it isn’t a consideration and thus not valid.
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Consideration must move from the promisee: This is a rule made to prevent parties from obligating contract unless he or she has contributed consideration.
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Consideration must be sufficient: The consideration has to be of actual material value and capable of assessment in financial terms.
There are also three exceptions when it comes to sufficient consideration
- by finding that the promise has exceeded the scope of the legal duty, that excess represents the consideration.
- By finding that the promise (in carrying out a legal duty) has actually conferred a new benefit on the promisor.
- By deciding that the act of the promisor enabled the promise to avoid some material disadvantage.
(Adams, A (2010). Law for business students. 6th ed. London: Pitman Publishing imprint. 84-88.)
Courts are are guided by two presumptions in determining wether the parties intend their agreement to be legally bound
- Parties to a domestic or social agreement do not intend to be legally bound
- Parties to a business agreement intend to be legally bound
i)
This case concerns a collier that requested special police protection when a strike was occurring. It’s the police’s duty to protect everyone but The police did not see this additional protection as a necessity, but ultimately sent extra protection. When the strike passed the county sent an invoice to the defendant for the extra costs for protection that were made during the strike. The defendant refused to pay this bill and agued that it was a public duty of the police to protect him.
This is what the judge ruled: ‘‘If in the judgment of the police authorities, formed reasonably and in good faith, the garrison was necessary for the protection of life and property, then they were not entitled to make a charge for it, for that would be to exact a payment for the performance of a duty which they clearly owed to the appellants and their servants; but if they thought the garrison a superfluity and only acceded [Glasbrook’s] request with a view to meeting his wishes, then in my opinion they were entitled to treat the garrison duty as special duty and to charge for it.’
So due to the fact that Glasbrook requested additional man power, it was considered as a special duty of the police and thus could be charged for that special duty.
1d)
The book by Alix Adams states:
‘Minors are legally capable of making most kinds of contracts and may take steps to enforce them against the other party. The law protects minors by restricting the extent to which their contracts may be enforced against them. Some like contract to lend money to a minor are never enforceable by the creditor; others are binding only to limited extent.
Also the contracts to purchase necessaries can indeed bind a minor. Necessaries are defined as good ‘that suit the condition in life of a minor’ but there are a few issues with these good;
- Are the goods capable of being necessaries?
- Were the goods necessary to the minor’s requirements at the time of sale and delivery?
i) Case Nash v Inman (1908) and Proform sports management ltd v pro-active sports management Ltd (2007)
In the case of Nash v Inman in 1908 a tailor sued a minor to which the tailor had supplied clothes (11 waist coats.) The minor (Inman) already had a sufficient amount of clothes that were provided by his father. Because the minor already had sufficient clothing the coats didn’t amount to necessaries. Initially Nash succeeded, but ultimately the court ruled that there was no contract enforceable due to the fact that minors have certain rights to pay for necessary things, and pay a normal and fair price for those things.
‘an infant may contract for the supply at a reasonable price of articles reasonably necessary for his support in his station in life if he has not already a sufficient supply. To render an infant's contract for necessaries an enforceable contract two conditions must be satisfied, namely, (1.) the contract must be for goods reasonably necessary for his support in his station in life, and (2.) he must not have already a sufficient supply of these necessaries.’
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And thus the minor ultimately won the case.
The case of Proform sports Management Ltd v Proactive Sports Management Ltd
Concerned star soccer player Wayne Rooney who was signed a representation contract by Proform sports management at the staggering young age of 15 years old. He signed this contract during his time at Everton football club. When his contracted had expired with Proform, Rooney and his parents went on to sign a new representation contract with Proactive (the defendant.) Proform stated that Proactive had procured breach of contract, and had forced Rooney into doing so.
The court held that there was no breach in contract due to the fact that the representation agreement amounted to a voidable contract only. The court also commented that Agency such as Proform and Proactive don’t appreciate the essential matters of a minor star player such as Rooney.
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What can be concluded from these cases is that a lot more comes into play with regard to contracts with minors. In both cases, the minor won. In the case of Nash v Inman the minor did not have to pay for the unnecessary goods. Where as Rooney was not liable due to the fact that the contracts made were voidable. These conditions definitely make it harder to establish contracts with minors; on the other hand it is appreciable that minors are protected by law in such a fashion.
2a)
i)
Within a contract a variety of conditions, warranties and innominate terms come into play. These terms all have separate meanings as defined below;
- Conditions
Conditions are the main terms that establish the main structure of a contract. Specific details that are essential to one party must be brought into attention towards the other party to be able to have formatted a contract. When one of these conditions is breached the party that has suffered due to this breach can no longer see it self obligated to other contractual obligations and also claim compensation.
As an example when you book a plain ticket the date of your departure and return are essential requirements.
(Adams, A (2010). Law for business students. 6th ed. London: Pitman Publishing imprint. 103.)
- Warranties
The warranties within a contract are more or less the ‘smaller’ or minor terms within a contract. They are not the primary terms of a contract and thus not crucial. Because it is not as important means that it also doesn’t have the same outcome when a warranty is breached in comparison to a condition. In this case when a warranty is breached the injured party is not allowed to discontinue there part of the contract. The injured party is entitled to compensation at best.
As an example to illustrate when you board your plane a facility such as a personal screen (which may have been promised) doesn’t influence the performance of the contract, which would be getting you to your destination.
- Innominate terms
If a term cannot be clearly defined as condition or a warranty, the term (by court) is generally defined as innominate and covers a variety of breaches, some being more important than others. When a breach of such a innominate term comes into play, the court then has to decided whether it is a condition or a warranty.
(Adams, A (2010). Law for business students. 6th ed. London: Pitman publishing imprint. 103-104.)
ii)
I think the key element in defining whether or not an innominate term is a condition or a warranty is the effect or damage the term will have on the injured party. If the term only brings a small alteration into the total contract it should be considered a warranty, whereas if it brings great damage to the injured party, it should be considered a condition. Due to this opinion I consider these rules to be of the utmost importance;
- ‘The use of the words ‘condition and ‘warranty’ to describe a term is of evidential value only, it is not conclusive at all”
- “If the damage resulting from the breach is so extensive that it substantially deprives the innocent party of the benefits bargained for, that party may repudiate their obligation. “
- “If a party has statutory right to terminate the contract if a term is breached, the term is a condition”
(Adams, A (2010). Law for business students. 6th ed. London: Pitman Publishing imprint. 104-105.)
2b)
i)
A standard form contract (or adhesion contract) is a contract that is established between two parties that leaves no room open for any sort of negotiation even if the offering party has an advantage. A clear example of such a contract is when you rent a car, the large car rental company (such as hertz) has established a certain rate to each type or size of car. When you request to rent one of these cars you literally have zero ‘wiggle room’ in determining the price, you take it or leave it.
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2c) (case Interfoto Picture Library Ltd v. Stiletto Productions, (1988)
i)
Interfoto was a library that held photographic transparencies. At some point, as requested, delivered 47 transparencies to stiletto. Stiletto received the bag containing the transparencies but did not open the actual bag containing not only the transparencies, but also the conditions and terms of Interfoto with regard to the supplied bag. In these conditions was stated that there was a holding fee for the transparencies when held on to for longer than 14 days.
After a month Interfoto sent a bill to stiletto requesting a payment of 3783 pounds for holding on to the bag of transparencies too long.
The court judged that the holding fee was ineffective, this mainly due to the fact that such a large fee must be indicated more clearly. Ultimately Interfoto was allowed to charge a fee of 3,5 pounds per transparency per week.
As stated in court:
“"The plaintiffs were under a duty in all fairness to draw the attention of Stiletto to the high price payable for the retention of the transparencies. English law has no such overriding principle, but has piecemeal solutions - equitable remedies for unconscionable bargains - and control of exemption clauses. Cases on sufficiency of notice should be seen in this context. At one level, the pure contractual analysis is whether one has done enough to give notice. At another, whether in all the circumstances it would be fair to hold a party to stringent conditions. It is in each case a question of circumstance as to whether the restriction expressed in any case is usual, or if unusual whether it has fairly been brought to the attention of the other. “
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To summarize the court ruled in stiletto’s favour do to the fact that Interfoto didn’t make enough effort to get the fee noticed. Also the penalty was communicated after the fact, and when looking at the consideration, it was sufficient. Also the fee Interfoto demanded was sent after the two parties had reached an agreement.
ii)
The EU unfair commercial practices directives (directive 2005/29/EC) are a series of new rules set up to further protect the consumer’s rights within the union. The intention of these rules is to enhance consumer confidence and also to make it relatively easier for businesses to engage in cross border trading. Along side these rules programs such as the “is it fair” program further enhance the consumer safety.
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These rules were established to be applied by all member states, the most important practices to be brought down with these rules in my opinion include:
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“Prize Winning: Creating the false impression that the consumer has won a prize when there is no prize or taking action to claiming the prize is subject to the consumer paying money or incurring a cost”
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“False claims about curative capacity - from allergies to hair loss to weight loss”
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Bait advertising: Lures the consumer into buying from a company by advertising a product at a very low price without having a reasonable stock available.
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The legal consequences of practices such as bait advertising could be extensive. As it is almost exactly identifiable to the case of Lefkowitz v. Great Minneapolis Surplus Store. As with the case with bait advertising an untrue offer is being made by the offeror, and considering the fact that the offer is clear, definite and leaving no room for negotiation. The repercussions could be extensive
Reference:
Adams, A (2010). Law for business students. 6th ed. London: Pitman Publishing imprint.