Advise Anna of her legal position

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1. Advise Anna of her legal position

In order for a contract to be valid there must be an agreement, giving rise to obligations that are enforceable by law, between two people with the intention to be bound by their promises. In the immediate case of Anna, through her candle manufacturing business, she has placed herself to be liable under a number contractual situations.

A person who wishes to prove that they are legally bound under contract to another person must first demonstrate a number of factors are present. It must be shown that an agreement has been reached between the two parties, in a form that is recognised as valid by the law. This is shown when one party makes an offer and the second party accepts this offer. There must have been an intention, on both sides, to become legally bound by there actions.

Sometimes the contract can become more complicated and more details, such as consideration and intention, play a more important part when analysing the contract between the two parties. This is expressed in the case of Gibson v Manchester City Council, [1978] 1 WLR 520 (CA), per Lord Denning MR,
when he stated;

“To my mind it is a mistake to think that all contracts can be analysed into the form of offer and acceptance. I know in some of the text books it has been the custom to do so: but, as I understand the law, there is no need to look for a strict offer and acceptance. You should look at the correspondence as a whole and at the conduct of the parties and see there from whether the parties have come to an agreement on everything that was material.”

Thus acceptance must be shown in a form, which is recognised by law and can be enforced by the courts. This means that the acceptance cannot be too vague, incomplete or uncertain.

This can be implemented in the instant case of Anna v Erawax; when they refused to pay her the £12,000 loyalty bonus. When the Erawax Company contacted Anna they promised to pay her the £12,000 if she ‘confirmed Erawax to be their wax suppliers’. Which she affirmed to her customers, therefore fulfilling the terms of the agreement, expressing her acceptance and intending to be legally bound.

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This is supported in the case of Carlill v Carbolic Smoke Ball Co [1893] 1 QB 265; where it was ruled that acceptance is deemed when one party, the offeree, fulfils all parts of the offer put forward by the offerer. The Carbolic Smoke Ball company made an advertisement claming that they would pay £100 to anyone who contracted the flu virus within one year of using their patent medicine. When Carhill used the medicine she later contracted the virus and Carbolic argued that there needed to be a formal acceptance of the offer before they became liable. The court found ...

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