Brief description regarding the case B asically, this situation starts with the offer of a contract to build a factory at the cost of RM 500,000 from Mario Ltd to Jackie Ltd on 1st March 2010. In the offer, Mario Ltd requested the reply should be sent i

• Acceptance

Next is the acceptance. Acceptance of an offer can be described as an unconditional agreement to all terms of that offer. Often, acceptance can be done orally or written. In this case, the acceptance done by written, which was by post. However, Elliott, C and Quinn, F (2007) also had mentioned that in some cases an offeree may accept an offer by doing something, such as send goods in response to an offer to buy. They also point out that, if it appears practical to suppose that the offeree acted with the meaning of accepting the offer, so the courts will only interpret manner as indicating acceptance.

We can view this condition by the case, Brogden v Metropolitan Rail Co.Without any formal agreement, Brogden had been supplied the railway company the coal for several years. Then to make things official, the parties involved, the rail company sent Brogden a draft agreement, which was left in a blank space for Brogden to slot in the name of an arbitrator. Subsequently, Brogden settled the things by signing the document and returned it, as marked approved. Then, the company’s employee laid the draft away in a desk drawer, whereby it stayed there for the next two years, without any further steps being taken concerning it. Brogden Continued to supply the coal under the terms of contract, and the railway company to pay for it. Eventually a dispute arose between them, and Brogden denied that any binding contract existed.

In this case, there was acceptance occurred when the Jackie Ltd agreed to terms of Mario Ltd. Jackie Ltd agreed to offer of the contract of building a factory at the cost RM 500,000. The acceptance complete in the side of Jackie Ltd when the letter posted at 1 pm on 6th March 2010.

• Conditional offer-specific means of acceptance

If an offeror positioned that his or her offer have to be accepted in a particular way, after that only acceptance by that process or a similarly effective one will be necessary.A method of acceptance should not be slower than the method specific in the offer, nor have any weaknesses for the offeror, with the intention that, it is considered to be equally effective. Case like Tinn v Hoffman reveals that any method which would arrive before return of post would be adequate, when the offeree was requested to respond ‘by return of post’. Elliott, C and Quinn, F (2007) argued that the offeree is not obliged to accept in the means proposed by offeror, even though a specified method of acceptance has been included for the offeree’s own benefit. As a result, we can say that Jackie Ltd can send the acceptance by the return of post or by any method. Furthermore, the acceptance should be delivered in a way that convenient to the offree, which was Jackie Ltd.

Therefore, Jackie Ltd should accept the offer according to his convenient. He just agreed to the offer by the return of post.

• Acceptance by post

Besides that, it had been stated that the one of the common rule for the acceptances by post is that they take some effects when they are posted, rather than they are communicated. Moreover, the authors mentioned about the major cause for this rule is historical, in view of the fact that it dates from a time as communication through the post was yet slower and less reliable than it is today. Other than that, in this case, the address been incorrectly posted and did not reached Jackie Ltd until 6th March 2010. This caused Jackie Ltd to send their acceptance through post at 1 pm on 6th March 2010.

• Postal Rule

Postal rule can be defined as a rule of contract law that makes an exception to the general rule that an acceptance is only created when communicated directly to the offeror. Moreover, the option made by postal rule places any uncertainty on the offeror because the offree may knowingly accept any time after the offer has been made by posting his acceptance but the offeror will not know that he is bound until actual receipt.In this case, Mario Ltd sent a letter to Jackie Ltd the contract of building the factory. Then, they asked Jackie Ltd to reply by return of post. However, there was a problem, where the letter contained an error in the address that cause the letter not reached by Jackie Ltd until 6th March 2010.The same situation also happens in the case of Adams v Lindsell.Generally, this case starts with a posted letter by D offering at Tuesday to sell wool at a certain price to C, saying that C should accept by the term to send it via post. C only acknowledged the letter on Friday evening since D had mistakenly addressed the letter. As soon C got the letter, he sent his acceptance letter. By Sunday, D thought that he would have received a letter by due course of post if C wanted to accept and so he sold the wool the next day to someone else. The court held that there was a contract between C and D because D did not set the time for acceptance. The reason is because it’s actually the liability of D that caused the letter to reach C late. So, we can mention that the problem faced by Jackie Ltd is same as the case Adams v Lindsell. The delay in the offer letter was an error caused by Mario Ltd, not Jackie Ltd. Moreover, Mario Ltd did not state the due date of acceptance should be arrived.

• Revocation of an offer

To be efficient, a revocation must be communicated.To determine when the communication is complete both as adjacent to the person who makes it and also as against the person to whom should it is made. Communication of a revocation is also complete at two unusual times, like the rules prevailing the communication of an acceptance. Sinnadurai, V (1995) also revealed that, the communication is comprehensive when it is put in a route of communication to the person to whom it is prepared as against from the person who creates the revocation. In the case we are discussing, the revocation is completed when Mario Ltd sent a fax to Jackie Ltd on 6th March 2010 to say that the offer of 1st March 2010 was withdrawn. However, the fax reached on Jackie Ltd’s fax machine at 12.45pm on 6th March 2010, fifteen minutes before the acceptance were sent. Besides that, the fax was not read by anyone until 5pm on the same day. Thus, Mario Ltd’s part of revocation completed as soon they faxed the letter. So, it was Jackie Ltd’s mistake so as to no one read the fax until 5pm.

Furthermore, a revocation of offers may exist for specific periods. That why, it had been stated that the rule of an offer can be revoked at any time before acceptance yet if the offeror had said it will hang about open for some particular time.However, this can be considered bias in the favor of the offeror, Mario Ltd whereby it makes complicated for the offeree, Jackie Ltd to perform his acceptance. We can judge as discussed above that withdrawal must be communicated. It’s not adequate for offeror just simply to change their mind about the offer. Hence, Mario Ltd should be notified with Jackie Ltd that the offer was revoked; even though Mario Ltd faxed the revocation. They can call to inform about the revocation but they do not perform that. Thus, it was a mistake made by Mario Ltd.

Bobby Ltd v. Mario Ltd

In the mean time, a new party; Bobby Ltd send an offer to Mario Ltd on 4th March 2010 to build a factory at the cost of RM 450,000.Nothing hearing from Jackie Ltd, Mario Ltd decided to call Bobby Ltd on 5th March and offered them a contract for RM 400,000. Bobby Ltd agrees to the offer.

In this situation, Bobby Ltd is an offeror, while Mario Ltd is an offree. The communication is made by telephone.

Bobby Ltd accepted the offer after a counter of RM 400,000 from Mario Ltd.

• Counter Offer

Next, Mario Ltd performs a counter offer by offering a contact of RM 400,000 to Bobby Ltd on 5th March. Counter offer made in response to an earlier offer by the other party throughout negotiations for a final contract. Basically, counter offer can cause a new offer to be made in response to an offer acknowledged. It has the consequence of rejecting the original offer, which cannot be established thereafter except revived by the offeror. For an example, the case of Hyde v Wrench.The case started when the defendant offered to sell his farm for £ 1,000 and the plaintiff responded by offering to buy it at £ 950. Then, the farm owner declined to sell at that price and when the plaintiff later attempted to accept the offer to buy at £1,000, however, the offer did no longer exist. Thus, making a counter offer automatically rejects the prior offer, and requires an acceptance under the terms of the counter offer or there is no contract.

Other than that, counter offer also can cause the role of parties to change. We can see that when Mario Ltd became an offeror, while Bobby Ltd became offeree.

• Acceptance

Thus, the acceptance between Mario Ltd and Bobby Ltd complete as soon Bobby Ltd agreed for the RM 400,000.The acceptance between two parties are communicated. It is because an acceptance does not regularly take effect until it is communicated to the offeror.We can agree for that stands when we view the case Entores Ltd v Miles Far East Corporation as explained by Lord Denning. If A shouts an offer to B across a river but, just as B yells back an acceptance, a noisy aircraft flies over, preventing A from hearing B’s respond, no contract been ended. A have to hear B’s acceptance before it can take effect. Hence, when we look at this case, the acceptance between two parties complete as Mario Ltd telephoned Booby Ltd on 5th March 2010 and offered them the contact for RM 400,000 and Bobby Ltd accepted the offer.

Hence, without a doubt, we can know that there was a formation of contract between Bobby Ltd and Mario Ltd.

• Remedy

If the terms of a contract are breached by one party, the other party may undergo a loss. Where this kind of situation occurs, remedies usually been measured, whereby the party suffering from the other’s breach can use. So, we can recommend that should be applied by both parties; Jackie Ltd and Bobby Ltd towards Mario Ltd. All common law remedies are reachable when the right of a contract is breached.

First of all, we will discuss about Jackie Ltd. The suitable remedy for them is damages. Damages are one of the awards that involve money that seek to pay compensation the innocent party for the financial losses they have encountered as a result of the breach. I had also been said that innocent parties are entitled to such damages when they have been in the situation they would have been in if the contract had been completed. The damages can be divided into two, pecuniary loss and non pecuniary loss.

Pecuniary loss or also recognized as financial loss is intend to compensate the innocent party for the financial losses that happen from not getting the performance agreed for (Elliott, C and Quinn, F 2007). Losses that included in the pecuniary loss are physical damage to the plaintiffs or their property and any other injury to their financial position. In this case, Jackie Ltd is mostly to the financial position. They can claim for the pecuniary loss to Mario Ltd for breaching the contract without notified with them properly.

Next, we look at the non- pecuniary loss. Non-pecuniary losses include suffering in the way like frustrating, mental distress and inconvenience (Elliott, C and Quinn, F 2007). However, contract damages have usually not been obtainable to compensate non-pecuniary loss. Thus, it is doubtful whether this pecuniary loss can be used in this case or not.

Secondly, we move on to Bobby Ltd. Bobby Ltd can perform the injunction. An injunction normally instructs the defendant not to do particular thing. Bobby Ltd can perform the injunction when it is appear Mario Ltd going to breach the contract that was formed. Moreover, if the breach of contract has already done, the court may make a mandatory injunction, which instructs the defendant, Mario Ltd to take action to restore the condition. The situation could possibly exist before the defendant’s breach. Hence, Mario Ltd has to agree and accept the offer.

As a conclusion, this action perhaps will be the best manner the settle this case. Lastly, we can say that Jackie Ltd has the right to sue Mario Ltd. Mean while, Bobby Ltd is recommended to perform injunction to avoid any unexpected things to occur like Jackie Ltd.

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Reference List

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