Contract between Two Parties-Free-Samples for Students-Myassignment

Questions: 1. Discuss whether contract had been formed between Ben and Mojo Beverages. 2.Discuss whether contract had been formed between Dorper and Livestock. Answers: 1.Issue Based on the facts of the case study, the main issue here relates to whether a contract had been formed between the two parties, i.e., Ben and Mojo Beverages. Rule A contract is the promise undertaken between two or more parties where one party carries on certain obligation and the other party makes the payment of consideration (Andrews, 2015). This promise holds legal validity due to the presence of different elements of contract formation. Included in these elements are ones of agreement, i.e., offer and acceptance, followed by consideration, intent, clarity, capacity and intent (Ayres and Klass, 2012). The first step in the formation of any contract is that an offer has to be made by one party, which covers in clear terms what is being offered by them. There is a need to obtain clarity on the communication being an offer, as often invitation to treat is made, which comes before any offer. Through an invitation to treat, an interest of negotiating on the possible contract is shown, whereas an offer shows the intent of the parties in being legally bound through the contract (Clarke and Clarke, 2016). A leading example of invitation to treat is the advertisements which a person often comes across in newspapers, or in magazines. In the matter of Partridge v Crittenden [1968] 1 WLR 1204, it was provided by the courts that such an ad is not an offer and instead is an invitation to treat (Blum, 2007). But, every case is not the same, and the terms stated in such communication are to be analysed for defining it as an invitation to treat or an offer. When the ads placed cover such terms where the acceptance on them can be made by simply performing any task, a unilateral contract is created, due to transformation of an invitation to treat into an offer and this was held in the landmark case of Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256. An ad had been covered in this cases in which it was covered that the smoke ball had to be used in a particular manner; and that even after using this product in the specified manner, if an individual catches flu, they would be given the amount advertised. The plaintiff used this and still got sick with flu and applied for the advertised amount to be paid. However, the defendant stated that the ad was just an invitation to treat and lacked the intention to be bound. When the matter was presented before Court of Appeal they stated that the p laintiffs contentions were right. Due to these reasons, the court held that a unilateral offer had been made in the advert; and by performing its terms, a unilateral contract had been formed (Stone and Devenney, 2017). Upon an offer being made by one party, the party to which it was made had to accept the offer. Any other party cannot give acceptance to this. Though, when it comes to the cases of unilateral offers, any individual to whom such offer has been made, can accept it; for instance, where the unilateral offer is made to people in certain jurisdiction, anyone from such jurisdiction can accept it by doing what has been stated in the offer (Abbott, Pendlebury and Wardman, 2007). The next element is consideration which can be any value mutually decided between the parties. However, it is important that the consideration has economic value. It needs to be present not past, and sufficient not adequate. Chappell and Co Ltd v Nestle Co Ltd [1960] AC 87 proves to be of help in clarifying this matter. This case saw the courts accepting the three chocolate bar wrappers as valid consideration (Latimer, 2012). Application The facts given in case of Ben and Mojo are quite similar to the ones given in the landmark case of Carlill v Carbolic Smoke Ball Company. Both of these had newspaper ad covering unilateral offers, since both can be accepted by performing the terms. The case study could be accepted by the people present at the lake, by catching the Lord Harry. The consideration element was also present in this case due to the ad stating that the person catching Lord Harry would get $100,000. Thus, by catching Lord Harry, Ben accepted the promise and deserves to be paid the amount of $100,000. Despite the rumour which had been spread at the lake, Ben had placed his reliance over the printed advertisement as it clearly stated that by catching Lord Harry, the person would be paid the sum of $100,000. There was no reasonable belief present before Ben to believe in the rumour being true. Mojo had never corrected on the displayed price sum. Furthermore, the rumour was never confirmed by the representative of the company who was there at the lake for certifying Lord Harry being caught before the same is released in the lake. Their silence confirmed it for Ben to not rely upon the rumour and to continue believing in the written communication. As nothing is stated otherwise, the other elements of a contract are assumed to be present in this case. Conclusion From the discussion carried in the previous parts, it can be concluded that a contract had been created between the two parties of this case. 2.Issue Based on the facts of the case study, the main issue here relates to whether a contract had been formed between the two parties, i.e., Dorper and Livestock. Rule In the previous segment, acceptance was explained in very brief and it was stated as one of the elements required for forming a contract. In order for acceptance to be given on an offer, the same has to be properly communicated. The offer has to be accepted in exact terms in which the same had been made (Elliot, 2011). In case of any change is made in the offer which has been made, a counter offer is deemed to be made. When such happens, based on Hyde v. Wrench (1840) 3 Beav 334, the offer made initially ends. In this regard, the date of such acceptance also holds significance. This is the date when the communication of acceptance is received by the offer making party (Marson and Ferris, 2015). Though, a leading exception to this rule is the postal rule of acceptance. As per the postal rules of acceptance, the date of acceptance is taken to be the date on which the letter of acceptance is posted. The reason for holding this was provided in Byrne v Van Tienhoven (1880) LR 5 CPD 344, where it was held that the postal office is the agent of the offering party (Mulcahy, 2008). In case the offer has to be revoked, it has to be done before an acceptance is provided on the offer. As per Tallerman Co Pty Ltd v Nathan's Merchandise (1957) 98 CLR 93, the postal rules can be accepted as a valid means of acceptance in only such cases in which the offering party has the reasons to believe that this mode would be used for giving the acceptance by the accepting party. Again, there is a need to differentiate between an acceptance and a request for information. In Harvey v Facey [1893] AC 552, the question regarding the lowest price of the pen was a request for information and not an acceptance or an offer. A telegram had been sent by the plaintiff to the defenda nt, in which the selling price of the pen was asked particularly in context of its lowest price. The reply to this telegram was the sum which was the lowest price of this pen. The court held that this was a request for information and could not be taken as an offer due to lack of intent amongst the parties (Poole, 2016). Contract formation also requires the presence of clarity for the terms which are included in the contract. Another important element is the intent, where the parties need to have the intent of being bound in a legal manner, where they would get legal liabilities as well, with the legal rights. And the final requisite element is the capacity, where the parties need to be of legal age in order to get into a contract and this is in addition to sound mind of the parties (Treitel and Peel, 2015). Where the terms on which the contract is based, are not fulfilled as per the manner in which they are stated in the contract, or as per the promise made under the contract, the contract is breached. Once this happens, the aggrieved party can apply for equitable and monetary damages (Lambiris and Griffin, 2016). Application Based on the case study, it is clear that the parties had the intention of creating legal relations and thus, a contract. The case had offer and counter offer which acts as an evidence of this intent being present. The communication sent on June 01st to Livestock by Dorper is to be taken as an offer as this communication clearly stated the terms which had been offered and also consisted of a valid consideration for the same having an economic value. The offer also provides the price per head and the number of sheep which were for sale, brining clarity to the offer; and the duration for which this offer was open was 14 days. The communication sent on 06 June would be deemed as a request for information which means that the offer had never been accepted. The reason for deeming it as a request of information, as an inquiry was made in this communication. This was not an acceptance, as a result of which the offer expired on the end of its time period. Just because the offer was open for Livestock does not mean that Dorper could not sell the product to someone else. Again, the 06th June communication can also be deemed as a counter offer, as this required an addition of usual terms for finance of the sale. This counter offer would mean that the original offer expired and again, acceptance was not given on the new offer made. Irrespective of deeming the 06th June communication as counter offer or request for information, acceptance was not attained on it. The reason for stating that acceptance was not attained in this case was due to fax being never stated as a valid means of acceptance, based on Tallerman Co Pty Ltd v Nathan's Merchandise. Dorper had no reasons to believe that fax would be used as a mode of acceptance thus proving that an acceptance was not attained. Without the contract being formed, breach of contract cannot be held. The fax receipt or its non receipt is not relevant to this case, owing to the transmission error, as fax was not deemed as a valid mode of acceptance. Conclusion From the discussion carried in the previous parts, it can be concluded that a contract was not formed as acceptance was not attained. References Abbott, K., Pendlebury, N., and Wardman, K. (2007) Business Law. 8th ed. London: Thomson. Andrews, N. (2015) Contract Law. 2nd ed. UK: Cambridge University Press Ayres, I., and Klass, G. (2012) Studies in Contract Law. 8th ed. New York: Foundation Press Blum, B.A. (2007) Contracts: Examples Explanations. 4th ed. New York: Aspen Publishers. Clarke, P., and Clarke, J (2016) Contract Law: Commentaries, Cases and Perspectives. 3rd ed. South Melbourne: Oxford University Press. Elliot, C. (2011) Contract Law. 8th ed. London: Pearson. Lambiris, M., and Griffin, L. (2016) First Principles of Business Law 2016. Sydney: CCH. Latimer, P. (2012) Australian Business Law 2012. 31st ed. Sydney, NSW: CCH Australia Limited. Marson, J., and Ferris, K. (2015) Business Law. 4th ed. Oxford: Oxford University Press. Mulcahy, L. (2008) Contract Law in Perspective. 5th ed. Oxon: Routledge. Poole, J. (2016) Textbook on Contract Law. 13th ed. Oxford: Oxford University Press. Stone, R., and Devenney, J. (2017) The Modern Law of Contract. 12th ed. Oxon: Routledge. Treitel, G H., and Peel, E. (2015) The Law of Contract.14th ed. London: Sweet Maxwell.