Discuss About The Makes A Binding Legal Contract Amid Parties?
The present assignment aims at understating the law of contract and the main elements that are required in order to make a valid and enforceable contract in law. These elements are applied to the given factual solution in order to have a better understanding of the contract elements.
There are three major issues that are framed as per the facts provided and all the issues are dealt separately. The Assignment is prepared with the help of ILAC format, that is, Issue, business Law, Application and Conclusion.
The assignment is supported with references.
Whether there is a valid contract that is framed amid Damien and Alen. If yes, when the contract was framed amid the parties.
In order to resolve issue, the concept of offer, acceptance and invitation to offer needs to be understood. It is assumed that the other elements of contract, that is consideration, legal intention and capacity of the parties are present in the given situation.
Any management in law which has the sanctity under law is called a contract. In Australia, a contract is a binding document upon the parties and the parties must honor the terms of a contract. However, in order to formulate a valid contract there are few ingredients that needs to be comply with. The same are offer, acceptance, intention, consideration and capacity of the parties.
An offer is the intention of the offeror which is transferred to an offeree through whom the offeror desire some act or omission and expects that the offeree will approve the same (Gibson v Manchester City Council, 1978). An offer can be made to specific group of people or an individual or to the world. Any kind of offer is valid provided it is made ether orally or in written formal but must be communicated to the intended persons. (Jennifer, 2001)
The offeree when gave his confirmation to the offer which is so received by him through an offeror then it is called an acceptance in law (Felthouse v Bindley, 1862). An acceptance can be made either orally or through written means or through conduct, but, it is necessary to communicate the acceptance. If the acceptance is not communicated then there cannot be any acceptance on the part of the offeree and there cannot be any contract amid the parties. (Robert & Bibi, 1998)
When offers are invited from people then it is called an invitation to treat. In an invitation to treat there is no offer, but, the inviter invites the offers from specific people. When the inviter accepts the invitation (offers) so received then there is a binding contract amid the parties (Pharmaceutical Society v Boots Chemists , 1953).
The facts reveal that Alan is the student of a University and is intended to sell of his text book “Introduction to Business Law in Singapore”.
In order to sell the textbook he posted a post on his facebook page on 1st November 2015. He submitted that that all of his friends who are enrolled in Kaplan Higher Education may purchase his textbook and his classroom notes for a price of $ 200 and people who are interested must pay by 5th November 2015.
It is submitted to initiate any contract it is necessary to make an offer.
However, Alan has posted a post on his facebook account and as per (Pharmaceutical Society v Boots Chemists , 1953) an advertisement is not an offer in law. It is an invitation thus, Alan has made an invitation to treat.
Also, the invitation is made to a specific class of persons, that is, the friends of Alan who are enrolled in Kaplan Higher Education. Thus, the offers must be received from such class of person only as held in (Carlill v Carbolic Smoke Ball Company, 1892).
Damien is not the friend of Alan but is the friend of Bernard. He is enrolled in Kaplan Higher Education. But, the invitation is made only to the friends of Alan on facebook.
However, he took the number from Bernard and sends an SMS to him wherein he offered that he is interested in buying the book and can he handover the money to him on 4th November 204.
Though the invitation is only for the friends of Alan, however, an independent offer is made by Damien to Alan wherein an offer is made.
Now, it is only if Alan accepts the offer of Damien that there is a binding contract amid the two.
In the evening of 4th November, Damien saw Alan and handed over the money to him which was duly accepted by Alan.
Thus, an accepted can be communicated thorough conduct. Thus, when Alan accepted the money there is communication of acceptance on the part of Alan. So, there is a binding contract amid the parties
So, it is found that an offer is made by Damien to Alan which was duly accepted by Alan.
Thus, there is a valid contract that is made amid Alan and Damien.
It is thus concluded that there is a valid exchanged of offer and acceptance amid the parties. so, the contract is made at the moment when on the evening of 4th November, Alan accepted the money from Damien and promised him to transfer the book by 7th November.
Thus, the contracting parties are Damien and Alan.
In the given situation, the concept of offer, acceptance and counter offer is very relevant. It is assumed that other elements of contract are present in the given situation.
An offer is the intention of the offeror which is transferred to an offeree through whom the offeror desire some act or omission and expects that the offeree will approve the same (Gibson v Manchester City Council, 1978). Also, The offeree when gave his confirmation to the offer which is so received by him through an offeror then it is called an acceptance in law (Felthouse v Bindley, 1862).
However, when no acceptance is given by the offeree, but, the acceptance is given in the form that it brings variation in the terms of the offer, then, it is no acceptance in law and is called counter offer. When a counter offer is made then the original offer lapses and the counter offer becomes the new offer. This new offer when approved by the old offeror (which is now the new offeree) results in a binding relationship amid the parties. In the leading case of (Hyde v Wrench, 1840), the concept of counter offer was rightly establihed.
The law is now applied to the facts of the case.
The facts reveal that Bernard is the friend of Alan on the facebook and is enrolled in Kaplan Higher Education. Thus, as per carlill, Bernard is eligible to make an offer to Alan as the offer is only for person who are the friend of Alan on facebook.
Now, on 2nd November he made an offer of $ 150 by posting a post on the facebook of Alan.
Thus, a valid offer is made by Bernard, but, a contractual relationship will only arises provide Alan must accept the offer of Brand and the same must be communicated to him.
The offer of Bernard was rejected by Alan by replying that he is not interested in selling the book below $ 200. Thus, the offer of Bernard was rejected by Alan.
It makes no difference even if Bernard sends the money to Alan through post, because the acceptance that is later made by Bernard is against the offer which is never made by Alan. Alan only made an invitation and there is no offer that is made by Alan at the first place. Thus, an operations against no offer is invalid in law.
So, there is no contract that aid Alan and Bernard.
The law dealing with capacity of the parties and intention of the legal parties is the relevant law that is applicable in the given situation. All other elements are presumed to be present.
Once an offer and acceptance is made, then, it is necessary that the communication must be made with the legal intention to abide by the promises. If the promises are made with no legal intention then there is no contract amid the parties.
In (Balfour v Balfour , 1919), it was held that when the parties are in social relationship then it is presumed that there is no legal intention amid the parties and when the parties are in commercial relationships then there is legal intention amid the parties to establish a contract amid themselves. But the presumption which is generally raised by the law is rebuttable ad it can be proved that the parties does have legal intention when the parties are in social relationship and there is no legal intention when the parties are in commercial relationship.
Now, when the parties are exchanging offer and acceptance then it is necessary that there must be consideration that is attached t the same. A consideration is the price for the exchange of the promises which moves from the promisor to the promisee. It is very necessary as it make a contract enforceable in law. (H.K.Luke, 1970)
Also, the parties must be capable to enter into a valid contract the parties are capable when they are major and has mental capability to make a contract (Gibbons v Wright, 1954).
The younger sister of Alan, Charleen, is taking GCE “O” levels this year. She is also on the facebook friend list of Alan. Thus she is also eligible to make an offer against the invitation of Alan.
So, on 2nd November 2015, when Alan was in bed, Charleen offered Alan to buy the book for $ 200.
It is submitted that in order to make a contract, the parties must be capable to make a valid contract.
It is submitted and presumed that Charleen is not a major and thus she is not eligible to make an offer. So, the offer made by Charleen to Alan is invalid.
But if a contract is made with a minor then the same is valid provided it is for her necessity,
Now, Alan smiled at Charleen and gave his assent without any legal intention.
However, in law, the offeror and offeree must also have legal intention to be bound by the contract. If the parties do not have legal intention there is no contract.
Now, when the assent is provided by Alan to Charleen then at that time Alan was not having any legal intention to accept the offer of Charleen.
Thus, as per (Balfour v Balfour , 1919) there is absence of legal intention and there cannot be any contract amid Charleen and Alan.
Even if it is considered that Charleen and Allen had legal intention to bind in a contract, stil, since Charleen is taking O level thus she is a minor and as per Gibbons v Wright there can be no contract with minor.
So, in any of the cases there can be no contractual relationhsip amid the two.
It is thus concluded that there cannot be any kind of relationship that existed amid Alen and Charleen mainly because Charleen is a minor. Also, there was no legal intention that was present by Alen which marketing a binding legal contract amid the parties.
Balfour v Balfour (1919).
Carlill v Carbolic Smoke Ball Company (1892).
Felthouse v Bindley (1862).
Gibbons v Wright (1954).
Gibson v Manchester City Council (1978).
H.K.Luke. (1970). The Intnetion to create legal relation. The Adelaide business Law Review .
Hyde v Wrench (1840).
Jennifer, C. (2001). Contract Law in south Pacific. Cavendish Publishing.
Michael, L. (2013). The Future of Dispute Resolution. LexisNexis Butterworths.
Michael, L. (2013). The Future of Dispute Resolution. LexisNexis Butterworths.
Pharmaceutical Society v Boots Chemists (1953).