LAW504 Business And Corporations Law

Issue:

Whether or not Mike is liable to make payment for the computers send by Bob?

Law:

It is a general rule that termination of offer is possible with rejection of offer, and it is not possible to accept the offer if it is once rejected by offeree. Rejection of offer is possible in two ways that is either by way of direct refusal or by making counter offer. In some specific situations counter offer is stated as purported acceptance. Counter offer is rejection of existing offer or new offer even though its new terms are not material. Rejection of offer is valid only when it is communicated to offeror. For better understanding of this concept, Hyde v Wrench (1840) Beav 334 is the best case law (ACL, n.d.).

Application:

Mike sends offer letter to Bob for the purpose of purchasing computers from bob on 1^st January. Bob make counter offer to Mike on 2^nd January, but on 3^rd January this offer is rejected by Mike. Bob changes his mind and accepts the offer made by Mike on 1^st January and sends the consignment of computers to Mike. Mike refuses to make payment because he purchased the computers from any other person.

In this case, Mike is not liable to pay to Bob because on 2^nd January bob made the counter offer which is considered as rejection of offer made by mike on 1^st January and as per rule if the offer is rejected by the offeree then he cannot accept the offer. Therefore, Mike has right to refuse the payment to Bob.

Conclusion:

There is no valid contract between Mike and Bob because Bob reject the offer by making counter offer to Mike.

Part 2

Issue:

Whether there is any valid contract between Bob and Tom?

Law:

For the purpose of effective acceptance it is necessary that it must be communicated and it is not sufficient that offeree just provide mental acceptance. When communication of acceptance is given by the offeree then only valid agreement is formed between the parties. Communication related to acceptance is completed when such acceptance is given to the offeror, even he did not read the acceptance given. Special rule is applied in case acceptance is given by way of letter, and as per this rule when offeree posted the letter of acceptance the only communication related to acceptance is completed. In this we refer case Adams v Lindsell (1818) 1 B & Ald 681, in this case court stated that offer is accepted when letter is posted by defendant. Therefore, contract for sale of wool is existed.

Application:

For the purpose of purchasing hard drives, Bob send offer letter to tom on 10^th January, and Tom accepts the offer made by Bob on 12^th January by posting letter to Bob but this letter reached to Bob on 15^th January. On 14^th January Bob canceled the offer making to tom on 10^th January by sending cancellation email. Later, Tom delivers the hard drives to Bob but Bob refuses to make payment to Tom.

In the present case, special rule is applied that is postal rule because Tom posted acceptance by way of letter, and as per this rule communication related to acceptance is completed when offeree posted letter of acceptance. Therefore, there is valid contract between both the parties because Tom posted letter on 12^th January.

Conclusion:

There is valid contract between parties because both offer and acceptance are presented in the agreement.

Part 3

Issue:

Contract between Bob and Steve is valid or not, or whether Bob is under obligation to give new computer to Steve?

Law:

Consideration must be presented into the contract either with the promise or after the promise, and if consideration is stipulated pre dates the promise then then such consideration is not considered as good consideration. For example: a promise to pay 50000 to B for the assistance provided by B during last month. This can be understand through case Roscola v Thomas in which there is no valid contract because consideration presented in the promise about the soundness of a horse was entering into the original contract - this had occurred before the promise was made.

Application:

In this case, Bob received offer from Steve for providing him new computer for his travel agency on 1^st February and this offer is accepted by Bob because Steve take care the cat of Bob when Bob is on holiday. Because of less sale Bob reject to give computer to Steve. Past consideration is presented in this case because Steve take care the cat of Bob when he last go on travel. Therefore, Bob is not liable towards Steve.

Conclusion:

Bob is under obligation towards Steve for providing new computer.

Part 4

Issue:

Whether there is any valid contract between Marie and Bob because of form signed by Bob?

Law:

Free will is the essential element of valid acceptance, and it is necessary that parties provide their free consent for legally enforceable contract. If any mistake is identified while the enforcement of contract such as parties to the contract agreed on different terms or parties are not able to understand the effect of the contract, then parties have option to declare that contract void.

Application:

In the present case, Bob signed the form by mistake sent by Marie on email and in this form Marie make offer to the Bob for purchasing the vehicle. In this agreement, consent give by Bob is not free. In other words, Bob signed the form by believing that form contains any other matter. Therefore, free will is not present in this case and there is no valid contract between the parties for the purpose of purchasing vehicle.

Conclusion:

Contract is not valid because the essential element of consent that is free will is not present in the contract signed by Bob.

References:

ACL. Agreement. Retrieved on 22^nd March 2017 from: https://www.australiancontractlaw.com/law/formation-agreement.html#acceptance.