Asad Iqbal

Common law

To: Michael Keane  

Form: Asad Iqbal

Date: 1st November 2004

Subject: Ryan office products

Introduction

Ryan office products are engaged in supplying office products and stationary to local businesses. They plan to expand the business. At the moment I work as a legal assistant in the firm. A number of legal problems have developed and senior partner has asked for advice on the following matters

Scenario 1

The first issues concerns Dean & Associates, who provide design services. Ryan entered into a contract to provide office furniture to Dean. Ryan was aware that the furniture was required to partly fulfil a design contract that Dean had won. Unfortunately, Ryan failed to deliver the furniture on time because its Italian suppliers failed to meet their delivery commitments. Dean had to pay penalties because they were late in completing the design contract. They are claiming compensation from Ryan.

The relationship between Dean and Ryan started with Dean Requesting Ryan’s catalogue. After initial discussions, Dean sent a formal purchase order, which contained their standard terms. Ryan responded with an acknowledgement, containing its standard terms. (Enclosed). No further documents were exchanged. Ryan is seeking to rely on its standard terms to defeat the claim for compensation. Dean claim the contact is on their terms and therefore Ryan’s cannot rely on any of its standards terms.    

Analysis of scenario

Foreword

Below I will state all the main headings or vital points in the scenario

 

  • Ryan entered into a contract to provide office furniture to Dean

The first interaction between Ryan and Dean took place when Dean requested Ryan’s catalogue

  • Ryan was aware that the furniture was required to partly fulfil a design contact that Dean had won.

The above clearly shows that Ryan knew what situation Dean was in. That is why Ryan is relying on his standard terms so he doest have to pay compensation to dean.

However Ryan could be entitled to compensation for his Italian suppliers

  • Ryan failed to deliver the furniture on time.

In Ryan’s contract it is stated under despatch and delivery (9) (a) that they do not accept any liability resulting in loss or damage from delay however caused

  • Because the Italian suppliers failed to meet their delivery commitments

Ryan may claim compensation from the Italian suppliers for failing to deliver on time

  •  Dean had to pay penalties because they were late in completing the design contract.   Dean is now trying to sue Ryan for delay in delivery

  • They are now claiming compensation from Ryan

If the contact is under deans Terms then with a doubt they will be entitled to compensation

  • Dean requesting Ryan’s catalogue (Invitation To Treat)
    Initial contact between the two was first made when dean requested a catalogue

An example of invitation to treat is Partridge v Crittenden 1968

Partridge v Crittenden 1968

Facts:

P placed an advertisement which read "Bramblefinch Cocks, Bramblefinch Hens, 25 shillings each." The advertisement was placed in a general classified section and did not use the words "offer for sale". He sold a bird to a third party who opened its box in the presence of C, an RSPCA inspector. From the bird’s leg ring, it was apparent that the bird was a wild bird and had not been bred in captivity. To offer such a bird for sale was an offence under the Protection of Birds Act 1954.

P was charged with that offence, and convicted, but the conviction was quashed on appeal. The advertisement was deemed to be an invitation to treat and not an offer for sale. Therefore, the offence could not be demonstrated to have occurred. P could have been charged with the offence of the completed sale, but the prosecution had instead chosen to rely on the offence of "offering for sale" and had then failed to establish that offence.

  • Dean sent a formal purchase which contained their standard terms

Dean made on offer by sending a formal purchase

Quotation

Dean requested Ryan’s catalogue,

The above was not an offer because it contains no standard terms or delivery terms

Offer

An offer is a clear and definite proposal capable of being turned into an agreement simply by acceptance.

To be legally effective an offer must satisfy the following general requirements:

  • It must be firmly made:
  • It must be communicated:
  • Its terms must be certain; and
  • It must not have terminated.

Offer + Acceptance= Agreement

  1. Acceptance must be unconditional – otherwise a counter offer
  2. Acceptance must be communicated
  3. Acceptance by conduct
  4. Conduct can include accepting the goods

A case law example of acceptance through conduct or acceptance without communication is

Felthouse v Bindley (1862)

The plaintiff discussed buying a horse from his nephew and wrote to him "If I hear no more about him, I consider the horse mine …" The nephew did not reply but wanted to sell the horse to the plaintiff, and when he was having a sale told the defendant auctioneer not to sell the horse. By mistake the defendant sold the horse. The plaintiff sued the defendant in the tort of conversion but could only succeed if he could show that the horse was his.

It was held that the uncle had no right to impose upon the nephew a sale of his horse unless he chose to comply with the condition of writing to repudiate the offer. It was clear that the nephew intended his uncle to have the horse but he had not communicated his intention to his uncle, or done anything to bind himself. Nothing, therefore, had been done to vest the property in the horse in the plaintiff. There had been no bargain to pass the property in the horse to the plaintiff, and therefore he had no right to complain of the sale.

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Business law 5th edition (John Ellison) (Tom Harrison)

A case law example of offer is Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256  

The defendants, the proprietors of a medical preparation called "The Carbolic Smoke Ball," issued an advertisement in which they offered to pay 100 to any person who contracted the influenza after having used one of their smoke balls in a specified manner and for a specified period. The plaintiff on the faith of the advertisement bought one of the balls, and used it in the manner and for the period specified, ...

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