It’s important to acknowledge that an offer is not always an offer. An offer is not an offer when there is invitation to treat. There are various types of invitation to treat such as auctions, sales advertising for tenders (Fisher v Bell 1960). Kate needs to be careful when she places an advert looking for builders; it must be carefully drafted in a certain manner where it doesn’t have all the terms and conditions. This way she won’t be obliged to enter a contract with everyone who contacts her as the advert is only an invitation to treat.
The second key element of a contract is ‘acceptance’. Acceptance is a mirror image of the offer. It can be expressed in words or by action. Acceptance which purports to introduce any new terms is considered to be a counter-offer (Hyde v Wrench 1840). Acceptance must be communicated, and is not effective until communication has been done. Communication can be done trough a reward (R v Clarke 1927), Postal Rule (Adams v Lindsell 1818), Mode of communication (Tin v Hoffman 1873) and Waiver –
The third element of a contract is ‘Consideration’. The principal of consideration is that both parties of a contract must each provide something, whether its money a service or some other form of contribution to the contract. If a window cleaner approaches Katie and offers to wash her windows for free the following day, but then fails to turn up, Katie cannot sue him for breach of contract as Katie hasn’t provided consideration, but if Katie and the window cleaner came to an agreement that in return for washing the windows Katie will give the window cleaner flowers in return for his service and there was acceptance on both parties than Katie will have right to take action against the window cleaner.
CASE 2
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Facts; it can be said that Sofia’s advert is an offer, as its stating all the terms and conditions. An advert is an invitation to treat not an offer (Partridge v Crittenden 1968). The reason why an advert would be considered an invitation to treat is due to the fact that the advertiser could not reasonably intend to be bound to sell to all those who might accept. An advertisement can be an offer depending on its wording and on the circumstances. The advert has to be full enough to contain all the terms and acceptance. (Partridge v Crittenden 1968).Sofia’s advert did not contain the terms of acceptance.
Law; an invitation to treat is an indication that someone is prepared to receive offers with the view to forming a binding contract. The circulation of the price is also an invitation to treat. Adverts for return of lost property for reward or in the case Carhill v Carbolic Smoke Ball Co 1893 are regarded as offers.
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Facts; it can be said that Danish did not enter into a binding contract with Sofia. As Sofia’s advert clearly states the terms and conditions. In Sofia’s advert it clearly states that “the computer will go to the first person who accepts it on Saturday Cash. Valid one day only”. Although Danishes’ acceptance letter arrives in the first post Saturday morning which clearly indicates acceptance on his behalf but it’s up to Sofia if she wishes to sell the computer to Danish. Sofia has a right to reject acceptance from Danish before an agreement has been reached as Danish hasn’t agreed to the terms and conditions Sofia stated on her advert.
Law; an advertisement of good/goods is an attempt to induce offers and therefore is classified as an invitation to treat, in this case the advert is an offer, however Danish has no remedies as he hasn’t complied to the terms.
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Facts; in Sofia’s advert it clearly states that she is selling the computer for £100 cash. By Rachel offering a cheque for £100 she has automatically rejected the original offer and not complied to the terms and conditions, which Sofia has every right to reject it and terminate her contract with Rachel before acceptance and agreement has been reached.
Law; acceptance has to be a mirror image of the offer. To be binding acceptance must correspond with the terms of the offer. The offeree must not attempt to vary its terms. A counter – offer may be accepted by the original offeror, this will have the effect of a binding contract. The situation between Rachel and Sofia relates to the case Butler Machine Tool v Ex-cell –o-corp 1979 where the claimant offered to sell tools to the defendant, the quotation included details of their standard terms and conditions for sale. The defendant ‘accepted’ the offer, enclosing their own standard terms, which differed from those of the claimant.
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Fact; it can be said that Clarisse has a right of action against Sofia, In the situation between Sofia and Clarisse, where Clarisse made a mini contract by changing the terms of the original offer. Clarisse’s offer to Sofia was to keep the computer until Monday so she can get to bank for the cash. This automatically makes the original offer irrelevant. As a gesture of her intent, Clarisse gives Sofia £20 not to sell the computer before Monday. Sofia agrees and there for has accepted the offer from Clarisse, Acceptance which purports to introduce any new terms is a counter offer.
Law; In order for there to be a binding contract there must be the following elements. An offer, which is a firm clear and full statement of terms indicating intention to be bound, an acceptance by another to whom the offer has been communicated. Therefore Clarisse has the right to sue for £400 as it is the difference of what she would ve spent if she bought the computer form Sofia and what she has spent on purchasing the computer from another store.
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Facts; as far as Sofia dealings with Abs are concerned there are two ways of looking at this situation. This is due to Sofia’s dealings with Clarisse who had made the offer before Abs and Sofia accepted Clarisse’s offer. One of my arguments would be that Sofia is not entitled to any action against Abs, but regardless of the offer with Clarisse Abs has made a counter offer, Which Sofia had agreed and could sue Abs. the rejection offer was too late after the agreement. I would also like to point out that Sofia has a business selling computers, although the advert stated that she was selling the one computer and adverts are commonly used as invitation to treat in order to induce offers from customers Sofia could have sold Abs a different computer. This is just my way of looking at this case from a different perspective and if this was the case than Sofia has got right of action against Abs. An offer was made by Abs of £200 for the computer, which Sofia accepted and therefore creating a legally binding contract.
- However if Abs was 15 years old he would be considered a minor. Minor fall into a group that the law regards them as being unable to enter into binding contractual arrangements, because they might not be in a position to fully understand the agreement they have entered.
Law; two sorts of contracts are valid and binding for a minor; a contract for the supply of goods and services to a minor which are necessaries and a service contract for the minors benefit. This could relate to the case (Nash v Inman 1908).
CASE 3
Terms – are agreed between parties, i.e. by one party and accepted by the other/reached through negotiation and comprise. A contract will consist of express terms, Express terms are terms that have been specifically mentioned and agreed by both parties at the time the contract is made. They can be either oral or in writing. However, sometimes a term which has not been mentioned by either party will nonetheless be ‘included’ in the contract, often because the contract doesn’t make commercial sense without that term. Terms like this are called implied terms, and there are two main types:
Terms implied by statute: the Sale of Goods Act 1979. The key provisions are:
Section 12: the person selling the goods has to have the legal right to sell them.
Section 13: if you’re selling goods by description, e.g. from a catalogue or newspaper advert, then the actual goods have to correspond to that description.
Section 14: the goods must be of “satisfactory quality” – that is, they should meet the standard that a reasonable person would regard as “satisfactory”. Also, if the buyer says they’re buying the goods for a particular purpose, there’s an implied term that the goods are fit for that purpose.
Section 15: if you’re selling the goods by sample – you show the customer one bag of flour and they order 50 bags – then the bulk order has to be of the same quality as the sample.
Terms implied by the courts…
As a matter of fact. Something that’s so obviously included that it didn’t need to be mentioned in the contract. If one party agrees to pay another party £50 for a pair of trainers , it probably wouldn’t occur to us to write down that we mean fifty pounds sterling, as opposed to any other sort of pound. That’s obvious to both parties. It has to have been obvious to both parties – it’s not enough to show that one party thought it was included, or that the contract would have been more reasonable with the added term.
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Conditions – are major terms, breach of these terms can result in the contract being discharged as the innocent party is released from any further obligations and can claim damages. Poussard v Spiers (1876)
Case: Madame Poussard entered a contract to perform as an opera singer for three months. She became ill five days before the opening night and was not able to perform the first four nights. Spiers then replaced her with another opera singer.
Held: Madame Poussard was in breach of condition and Spiers were entitled to end the contract. She missed the opening night which was the most important performance as all the critics and publicity would be based on this night.
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Warranties – are the minor term that gives the innocent party the right to apply to damages. Whether a term is minor or major is crucial and is often at the basis of legal disputes. Bettini v Gye 1876
Case: Bettini agreed by contract to perform as an opera singer for a three month period. He became ill and missed 6 days of rehearsals. The employer sacked him and replaced him with another opera singer.
Held: Bettini was in breach of warranty and therefore the employer was not entitled to end the contract. Missing the rehearsals did not go to the root of the contract.
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Innominate Terms - The innominate term approach was established in the case of Hong Kong Fir Shipping. Rather than classifying the terms themselves as conditions or warranties, the innominate term approach looks to the effect of the breach and questions whether the innocent party to the breach was deprived of substantially the whole benefit of the contract. Only where the innocent party was substantially deprived of the whole benefit, will they be able to treat the contract as at an end.
- Under the terms of the contract between Rafael and Michael, Rafael does have a right of action against Michael regarding his purchase.
When Rafael bought the shoes from Michael’s shop a contract was formed between the buyer (Rafael) and the seller (Michael) , which is legally binding and is covered by a law called the ‘The Sales of Goods Act 1979’, as I have mentioned above the main terms implied by the Sales of Goods Acts 1979.
When Rafael bought the goods from Michael he has a right to expect that the goods should be as described, fit for purpose and of satisfactory quality. The shoes Rafael bought were described by the sales assistant as identical to the ones he tried, which were only sample shoes.
As the shoes were faulty and not of satisfactory of the description Rafael has a right to claim for a refund. In order to claim the refund has to contact the trader within a reasonable period of time, this time period is not set out by the law. However if Rafael has had some use from the shoes or had them for a while before takes them back he could ask for a repair or replacement item. He, as the customer has the option of which solution he would like. If a repair and replacement is not possible Rafael may be entitled to a reduction in price, however he must not require the trader to repair or replace if it’s too costly.
- The note in inside the box has no legal affect whatsoever in this case or any other case in fact. As a consumer Rafael is protected by the ‘Sales of Goods Act 1979’. As there was invalidating factors such as misinterpretation of the goods which induced Rafael to enter the contract. This makes the contract voidable even the statements are not contractual statements.
If Michael had notices around the shop and Rafael saw those before accepting to buy the shoes it wouldn’t make a difference in this case as Rafael is protected by the law from purchasing faulty goods and not as described.
Exclusion clause is a clause which seeks to release one of the parties of liabilities should something go wrong. The Unfair Contract Act 1977 has restricted a trader ability to limit liability. A trader such as Michael dealing with consumers cannot exclude or limit his liability for breach of contract or allow himself to provide inadequate service unless he can show the clause satisfies the ‘ test of reasonable’ which means that in certain cases an exclusion clause is valid only if the trader can show that the clause is fair and reasonable.
The Unfair Contract Act 1977 (s11) states; the “reasonableness” test.
(1)In relation to a contract term, the requirement of reasonableness for the purposes of this Part of this Act, section 3 of the Misrepresentation Act 1967 and section 3 of the Misrepresentation Act (Northern Ireland) 1967 is that the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.
(2)ln determining for the purposes of section 6 or 7 above whether a contract term satisfies the requirement of reasonableness, regard shall be had in particular to the matters specified in Schedule 2 to this Act; but this subsection does not prevent the court or arbitrator from holding, in accordance with any rule of law, that a term which purports to exclude or restrict any relevant liability is not a term of the contract.
(3)In relation to a notice (not being a notice having contractual effect), the requirement of reasonableness under this Act is that it should be fair and reasonable to allow reliance on it, having regard to all the circumstances obtaining when the liability arose or (but for the notice) would have arisen.
(4)Where by reference to a contract term or notice a person seeks to restrict liability to a specified sum of money, and the question arises (under this or any other Act) whether the term or notice satisfies the requirement of reasonableness, regard shall be had in particular (but without prejudice to subsection (2) above in the case of contract terms) to—
(a)the resources which he could expect to be available to him for the purpose of meeting the liability should it arise; and
(b)how far it was open to him to cover himself by insurance.
(5)lt is for those claiming that a contract term or notice satisfies the requirement of reasonableness o show that it does.
BIBLIOGRAPHY/ REFERENCING
BOOK
HND – COMMON LAW -1st edition 2004 published by BPP Professional Education – Printed in Great Britain, West Midlands
Referencing:
HND – COMMON LAW -1st edition 2004 published by BPP Professional Education – Printed in Great Britain, West Midlands
Essential elements of a valid contract – Part A, Chapter 3-6, pages 35-73
Specific Terms in a business contract, Part B, Chapter 7 ;Terms and exclusion clauses page 85
WEBSITES
Encyclopedia of british Law, edition 2. Copyright 2008; referencing standard form contract (case 3 on the assignment)
; referencing the Sales of Goods Act (case 3 on the assignment)
SELF EVALUATION
I found this assignment to be quite challenging as it required loads of information regarding the Contract Law even though I was familiar with the subject. I felt that the information required a world limit of 2000 is not enough for this assignment. I wasn’t allowed to fully use the knowledge of the subject as I had limitations to number of words I can use.
The assignment itself was a great experience and a great way to explore different case examples to use for the assignment.
I used the web, books and my own personal knowledge of the subject to complete this assignment.