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Application of Law

Discuss about the case study Legal Studies for Legal Rights and Obligations.

To advice Connor, Dolly, Eileen and Flora with regards to their legal rights and obligations in wake of the relevant legal principles in the given situation.

In order to have an enforceable contract, one of the pre-requisites is to have a valid agreement. A valid agreement typically has two components namely offer and acceptance. It is imperative that an offer must be made by the offeror and unconditional acceptance must be granted by the offeree in order to enact a valid agreement (Carter, 2012).

In this regards, it is imperative to differentiate between offers and invitations to treat. Normally, advertisements which promote the sale of a particular good are not constituted as offers but are merely considered as invitation to treat. As a result, there is no obligation on the person doing the advertisement to sell the good. This is supported by the verdict of Partridge v Crittenden [1968] 1 WLR 1204 where the defendant had released an advertisement with regards to sale of some protected birds in the newspaper. Based on this advertisement, the defendant was charged with the illegal act of making an offer to sell protected birds (Latimer, 2005). However, the court ruled that the defendant is not guilty since the advertisement was given so as to attract proposals or offers which may or may not be accepted by the defendant. Further, Lord Parker CJ opined that the treatment of advertisement as offers tends to violate business sense as acceptance from multiple people for the same good may land the person displaying the advertisement in a position where obligation to sell exceeds the amount owned (Pathinayake, 2014).

Additionally, once an offer is made, it needs to be given unconditional acceptance before the offer is withdrawn. The offeror may withdraw the offer any time before acceptance is communicated to the offeree. It is noteworthy that making a decision to accept on the part of the offeree does not constitute an acceptance and the same needs to be communicated to the offeror. This is apparent from the arguments made in the Bressan v Squires [1974] 2 NSWLR 460 case (Gibson & Fraser, 2014). The acceptance may be communicated to the offeror using any of the acceptable communication mediums. One of the communication mediums that could be used by the offeree is the postal medium. In contracts and agreements that are negotiated through the postal medium, certain rules need to be adhered to which are given below (Pendleton & Vickery, 2005).

Conclusion

The offer sent by the offeror through post would become enforceable only when the offeree actually receives the same.

With regards to communication of acceptance through post, this would become enforceable as soon as the letter indicating acceptance is posted by the offeree. The date of receipt of this letter by the offeror is immaterial to the acceptance of the contract.

The rules highlighted above have been derived from the arguments made during the Tallerman & Co Pty Ltd v Nathan's Merchandise (1957) 98 CLR 93 case (Pathinayake, 2014).

In order to apply the various facets of contract law that have been discussed above, we first need to summarise the case facts.

Connor floated an advertisement for selling the car which was parked outside his house. The advertisement was pasted on the windscreen and had the expected price and also the contact number. Dolly saw the car and called Connor on the provided number to communicate that she would be willing to buy the car at $ 23,000. Connor said that he would consider the offer. Meanwhile, another customer Eileen saw the car and called at 11 am, Monday on the same day and left a note with Connor’s daughter regarding buying the car for $ 26,000 and also kept a cheque for an equivalent amount.

In afternoon, on Monday, Connor send a letter at 2:30 pm (Monday) communicating his desire to sell the car to Dolly for $ 23,000. However, later at 4:30 pm, Connor read Eileen’s note and hence called Dolly to communicate that the deal was off but Dolly was away and hence received the message only on Wednesday 8 pm. Also, at 2:15 pm on Monday, Fiona sent a letter along with a $ 26,000 cheque for the car which due to misprinting of address reached Connor on Friday.

Connor’s advertisement in the given case does not amount to offer but actually is an invitation to treat as discussed in the law section above.  Thus, Connor through the advertisement is intending to attract offers for the car. In light of this, the offers made by various interested parties need to be evaluated.

  • Dolly - Dolly made an offer to buy the displayed car for $ 23,000 and communicated the same to the owner Connor using appropriate communication means. Although, Connor did not give immediate acceptance for the offer but through post later at 2:30 communicated his acceptance. In accordance with the postal rules of contract, the acceptance becomes valid as soon as the acceptance letter is posted. Hence, at 2:30 pm on Monday, Dolly and Connor entered into a legally enforceable contract for the car. Further, attempts by Connor to communicate the cancellation of the deal by phone do not amount to cancellation of contract as the same was not received and agreed by Dolly.
  • Eileen – Eileen made an offer to buy the displayed car for $ 26,000 and communicated the same to the owner Connor’s daughter using appropriate communication means. She left a note which captured all the information communicated by Eileen. However, Connor came to know about Eileen’s offer only after he had already communicated acceptance for Dolly’s offer. Thus, no contract with Eileen is deemed to be enacted since there is no acceptance by Connor and also the car is already sold.
  • Fiona – Fiona made an offer to buy the displayed car for $ 23,000 and communicated the same to the owner Connor through mail. However, since the mail was delivered to Connor only on Friday, hence in accordance with the postal rules of contract, Fiona’s offer would become valid only on Friday. However, by that time the car has already been sold and there is no acceptance by Connor due to which no legal contract exists between Connor and Fiona with regards to selling of the displayed car.

It is apparent from the above that Connor has an enforceable legal contract for the sale of car with Dolly only. As a result, Connor should provide Dolly with the car for a consideration of $ 23,000. In case, Connor denies fulfilment of his contractual obligations to seal a contract with Dolly, then Dolly can charge Connor with breach of contract and thus force him to sell the car for $ 23,000.

Issue

Conclusion

From the above discussion, it may be concluded that Connor has a legally enforceable contract to sell the car with Dolly for a consideration of $ 23,000. Further, Eileen and Fiona have no rights and obligations with regards to car and Connor should promptly return their cheques. Also, breach of contract by Connor would have serious implications for him as Dolly can press charges and demand enforcement of contract. Meanwhile, if Dolly due to some reason denies taking delivery, then Connor can enter into a fresh contract with either Eileen or Fiona.

To opine if Dan can receive compensation from Toff Dry Cleaners considering the situation of the given case.

There are various terms that may be written in the receipt or contractual agreement, but for these to be considered by the court, there are three specific requirements that must be complied with. These conditions are highlighted below.

  • The notice with regards to the terms of the contract should be provided either before or during the contract or agreement. This is in line with the arguments made under Olley v Marlborough Court Hotel[1949] 1 KB 532 where it was ruled that for any term to be included in the contract and enforceable in the court, it should be provided to the other party at any time before the contract is enacted (Lindgren, 2011). However, an exception to this rule is when there is past dealings between the two parties and thereby a fresh notice stating the terms may not be required as it would become implied (Carter, 2012).
  • Additionally, these terms must be placed in a document which is intended to bind the parties into contractual obligations. This is apparent from the arguments made inChapelton v Barry Urban District Council [1940] 1 KB 532 case where it was held that receipt cannot be treated as a document which is to contain contractual clauses. Thus, the terms need to be stated in document which is worthy of acting as a contract document (Latimer, 2005).
  • Another condition that needs to be fulfilled is that the party must take reasonable measures to bring to the notice of the other party about the various conditions that are intended to serve as terms to the contract. This is apparent from the verdict given in the Parker v South Eastern Railway Company[1877] 2 CPD 416 where it was ruled that it is the duty of the party issuing receipt to take reasonable measures to bring to the notice of the other party about the conditions. Despite these measures, the party eventually may not read the conditions but it does not matter since reasonable steps have been taken (Gibson & Fraser, 2014).

A relevant case is the Curtis v Chemical Cleaning Co [1951] 1 KB 805. In the given case, the defendants were given their wedding dress for cleaning by the plaintiff.  The plaintiff was made to sign a “Receipt” and it was communicated by the defendant’s assistant that in case of any damage to beads and sequins, the cleaner would not be held liable. However, the receipt had a damage clause which provided the cleaner immunity against liability arising from any damage to the clothes. Later, the dress suffered a lot of stains and the court ruled in favour of the plaintiff since the assistant had given wrong information about the exemption clause (Lindgren, 2011).

Besides, in all commercial transactions, tort law is also applicable as it is imperative that neither of the parties should act in a negligent manner and exemption clause on the receipt do not extend to cover the negligent behaviour. Even if exemption clauses are applicable, then also these do not escape liability borne out of negligence but only seek to provide immunity against any damage despite reasonable care (Davenport & Parker, 2014).

In the given case, Dan gave some clothes for cleaning for which he was provided docket which we did not read. When he came back to receive the clothes, his suit was found missing while her wife’s silk dress was badly stained.  Dan demanded compensation for the  damage but the dry cleaner owner did not agree and instead point to the exemption clause at the back of the docket which indicated that the cleaner would not be held liable for damage or loss of clothing that is given for cleaning. However, Dan claims that he had never read this or seen the sign displayed behind the counter which said the same.

Law

In the given case, Dan is liable to receive compensation from the dry cleaner. This is because no reasonable efforts were taken on the part of the staff of the drycleaner to bring to the notice of Dan about the conditions listed in the docket or on the sign. Further, he is also not aware of it by virtue of the past dealings with the drycleaner. As a result, the exclusion clause is not enforceable here in line with the discussion of the law above.

In the event that the assistant had informed Dan about the exclusion clause, then also there would not have been any difference to the conclusion drawn above.

With regards to Dan’s suit, it is apparent that the suit has been lost due to negligent behaviour on the part of the drycleaner since his suit was provided to another customer without proper verification. There is a duty to care for the customer’s clothes on the part of the drycleaner which has not been satisfied here (Latimer, 2005). Hence, for the suit, compensation is to be paid to Dan.

With regards to Dan’s wife silk dress, it is apparent that the assistant has miscommunicated the scope of the exclusion clause and hence in line with the judgement in the Curtis v Chemical Cleaning Co [1951] 1 KB 805. Dan would be liable to receive compensation in this case also due to faulty information about the exclusion clause.

As per the tort law, there is a duty to care on the part of the drycleaners. Due to negligence, the suit has been lost and dress damaged. In this case, any convenience which is borne by Dan and his wife would also be payable by the dry cleaner. This is because this inconvenience is being caused due to the negligent action of the drycleaner and in the event the drycleaner would have not acted negligently, this inconvenience could have been avoided (Davenport & Parker, 2014). Thus, any expense for the hiring of the dress for the event would also be borne by the drycleaner along with the compensation for the clothes.

References

Carter, J 2012, Contract Act in Australia, 3rd eds.,  LexisNexis Publications, Sydney

Davenport, S & Parker, D 2014, Business and Law in Australia, 2nd eds., LexisNexis Publications, Sydney

Gibson, A & Fraser, D 2014. Business Law, 8th eds., Pearson Publications, Sydney

Latimer, P 2005.  Australian business law, 24th eds., CCH Australia Ltd. Sydney

Lindgren, KE 2011, Vermeesch and Lindgren's Business Law of Australia, 12th eds., LexisNexis Publications, Sydney

Pendleton, W & Vickery, N 2005.  Australian business law:  principles and applications, 5th eds., Pearson Publications, Sydney

Pathinayake, A 2014, Commercial and Corporations Law, 2nd eds., Thomson-Reuters, Sydney

Bressan v Squires [1974] 2 NSWLR 460

Chapelton v Barry Urban District Council [1940] 1 KB

Curtis v Chemical Cleaning Co [1951] 1 KB 805.

Olley v Marlborough Court Hotel [1949] 1 KB 532

Parker v South Eastern Railway Company [1877] 2 CPD 416

Partridge v Crittenden [1968] 1 WLR 1204

Tallerman & Co Pty Ltd v Nathan's Merchandise (1957) 98 CLR 93

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