Analyze The Contractual Relationship Of Bill Ciara

Discuss about the Analyze the Contractual Relationship of Bill Ciara and Denis with Andy.

 

 

1. Whether the advertisement placed by Andy is an offer or invitation?
2. To analyze the contractual relationship of Bill, Ciara and Denis with Andy?

Relevant law

The contract law requires agreement, consideration, intention and capacity to make a valid contract. (Enshen, 2017)

An agreement is the combination of offer and acceptance.

An offer is a suggestion/proposal which is communicated amid an offeror and an offeree. An offer transfers his intention through a proposal and wish that the terms so communicated should be accepted. The offer when comes in the knowledge of the offeree makes an offer complete (Carlill v Carbolic Smoke Ball Co, 1893). (Julie, 2012)

If any party wants to cancel his offer then an offeror must cancel the same before an acceptance is complete by an offeree. Any offer after an acceptance has no validity in law. the revocation must reach the offeree in order to be valid (Byrne v Van Tienhoven, (1880)). (Robert & Bibi, 2017)

In contract law, an invitation is considered not to be an offer. An invitation to treat is an act where a person by placing advertisements, or auctions, notices or tenders or display of goods, invites people to make proposal to the inviter, there making the prosper as offeror. The inviter should accept/reject the proposals/offers of the people to establish an agreement. In (Partridge v Crittenden , [1968] ) an advertisement is held not to be an offer but is an action of invitation to treat.

The offeree upon receipt of the offer must confirm it to make a binding agreement. The confirmation is called acceptance and it should be come within the knowledge of the offeror to make any acceptance binding. Keeping the intention in the mind is not an acceptance, it must be communicated to the offeror to make an agreement. In (Felthouse v Bindley , (1862) ), an acceptance which is not communicated and keeping silence is disregarded as an acceptance in law. (Julie, 2012)

An acceptance when made by post is complete when the letter is posted and not when the same comes in the knowledge of offeror and is held in (Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH, 1983). (Julie, 2012)

When the offeree instated of accepting the offer brings variation to the terms of offer then it is no acceptance and is a counter offer which cancels the offer so made by the offeror. In (Hyde v Wrench , [1840] ) a counter offer is held to be no acceptance in law. The counter offer so made is a new offer. Also, an query by any offeree is not an acceptance in law and does not make an agreement amid the parties (Stevenson Jaques & Co v McLean, (1880) ). (Robert & Bibi, 2017)

Application of law

The law is now applied to the given facts,

Issue 1

An advertisement is placed by Andy in the newspaper.

Now, an advertisement is an invitation as per (Partridge v Crittenden , [1968] )

So, the advertisement by Andy on 30^th March is an invitation and Andy must act as an offeree.

So, he has invited people to offer to buy his computer for $ 2500.

Contract with Bill

Bill on 1^st April an offer is made via telephone to buy the computer @ 3,000 to be payable in 3 months.

This is an offer by Bill with specified terms.

Andy should accept the offer of Bill to make an agreement but he denied the offer by saying that he wants to make a quick sale.

Thus, by decoying the offer, Andy has terminated the offer and there is now no offer which can be later accepted by Andy.

So, the letter which is posted by Bill on 5^th April, that he is willing to accept the initial offer that is made by Andy has no relevance because the acceptance which is made by Bill is against the invitation to offer which is made by Andy.

There is no offer to which Bill has shown his acceptable. He must make a new offer to Andy which should be accepted by Andy to make a contract.

So, the letter by Bill has no relevance, thereby, does not make any contract.

Contract with Ciara

Ciara on 2^nd April, a telephonic conversation took place with Andy wherein she offer to buy the computer @ 2100 but the cash is payable in seven days.

Thus, an offer is made by Ciara to Andy through telephone which is heard by Andy. Thus, the offer is valid in law.

This offer should be completely accepted by Andy to make an acceptance.

But, Andy does not accept the offer of Ciara. But, he made counter statement according to which he replies that he will take $2300 which is payable in seven days time.

So, as per (Hyde v Wrench , [1840] ) a counter offer is made which has terminated the offer of Ciara.

Now, an offer is made by Andy to Ciara with new terms. Andy is an offeror now, and Ciara must accept the new offer to make a valid contract.

Now, Ciara makes a query regarding the ability of the computer to burn DVD. Now, as per (Stevenson Jaques & Co v McLean, (1880) ), no enquiry is an acceptance. So, no acceptance is still made by Ciara.

Now, on 6^th April, a letter of acceptance is posted by Ciara and as per (Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH, 1983)the acceptance is complete as soon as the letter is posted. The letter is received by Andy on 11^th April bout it will not change the sanctity of the acceptance and there is concluding contract amid Andy and Ciara on 6^th April.

Now, Andy wants to cancel his offer and thus he posts a letter of revocation to Ciara on 3^rd April.  This cancellation is received by Ciara on 7^th April. So the revocation is complete on the part of Ciara is when she comes within her knowledge, that is, 7^th April. But, an acceptance is already made by Ciara, that is, on 6^th, before the offer is relocated.

So, the revocation is of no significance.

Contract with Denis

On 2^nd April, a telephonic conversation took place amid Denis and Andy wherein Denis offer to buy the computer @ $2,400.  He further submitted that if he does not receive any reply from Andy then he will consider the same as deem acceptance.

Andy does not accept the offer and submits that he will think about the same and completely forgets about the same.

Now, Andy has forgotten about the offer and no acceptance is made by him. His silence cannot be construed as an acceptance as per (Felthouse v Bindley , (1862) ) as communication of the same is prime to consider an acceptance complete and valid in law.

So, there is no acceptance which is made by Andy.

Later when Denis intends to collect the computer, then, he cannot do so because there is no acceptance that is made by Andy to the offer of Denis.

Conclusion

It is concluded, that Andy has established a valid contract with Ciara on 6^th April when the letter of acceptance is posted by Ciara to Andy.

There is no contract amid Andy and Bill because the offer which is made by Bill was not accepted by Andy and later there is no new offer which is made by Bill to Andy which is accepted by Andy to make a valid contract.

Also, Denis cannot ask for the compute because the offer which is made by him is not accepted by Andy by making any express acceptance. Silence is no acceptance.

Bibliography

Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH (1983).

Byrne v Van Tienhoven ((1880)).

Carlill v Carbolic Smoke Ball Co (1893).

Enshen, l. (2017). Business and corporate law (Second edition. ed.). Sydney: Thomson Reuters (Professional) Australia Limited.

Felthouse v Bindley ((1862) ).

Hyde v Wrench ([1840] ).

Julie, C. (2012). Agreement. Retrieved May 10, 2017, from Australian Contract Law: https://www.australiancontractlaw.com/law/formation-agreement.html

Partridge v Crittenden ([1968] ).

Robert, M., & Bibi, S. (2017, May 9). Termination of an offer. Australia.

Stevenson Jaques & Co v McLean ((1880) ).