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Contract (Offer and Acceptance)

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21 views5 pages

Contract (Offer and Acceptance)

Uploaded by

Saad Hassan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Contract Law

Question no.1

This question deals with offer and acceptance. Moreover, the answer
comprises of the postal acceptance rule, counter offer and validity of
acceptance. Contractual claims (if any) against Gunter would be
observed in different scenarios.

(a)

The first issue that arises is whether Gunter’s action will be regarded as
an offer and secondly whether the postal acceptance rule is applicable
in this scenario or not? Can Severine bring any contractual claim against
Gunter?

“An offer is simply a statement of willingness by one party to enter into


a contract on the stated terms, provided that these terms are, in turn,
accepted by other party to whom the offer is addressed” (Mc Kendrick
Chap.3) whereas according to Gibson v MCC
An invitation to treat is simply an expression of willingness to enter into
negotiation which may or may not lead to the conclusion of a contract.

The parties’ intention is a decisive factor so where parties intend to


leave no space for any kind of negotiations and accept the stated terms
as it is by following the mirror image rule, it is likely to be said that it
would be an offer.

Severine accepts Gunter’s offer and sends his acceptance by post, it is


likely to be said that the postal acceptance rule will be applicable in this
scenario. The point to be noted is that Postal Acceptance Rule is only
applicable to letters of acceptance. As in the case of Adams v Lindsell,
“acceptance is completed once the letter of acceptance is posted”
where the risk of delay and loss is upon the offeror and the contract is
considered to be made just by posting the letter of acceptance.

In the case of Household Fire Insurance v Grant, the postal rule was
affirmed as it was considered that acceptance remains effective when it
is correctly posted and both parties considered the post an acceptable
way of communication. As Gunter also used post to convey his offer
and in return acceptance was posted by Severine, there was no
restriction by either party to not use the post as a mean of
communication.

As in the case of Henthorne v Fraser, where Lord Herschell stated that


“where the circumstances are such that it must have been within the
contemplation of the parties that, according to ordinary usage of
mankind, the post might be used as mean of communicating the
acceptance of offer, the acceptance is complete as soon as it is posted.”

It is likely to be said that Postal Acceptance Rule will be applied and


Severine’s acceptance will be effective, contractual claim against
Gunter under Postal Acceptance Rule could be brought.

(b)

The second issue that arises is whether any mistake in posting the
acceptance affects the applicability of postal acceptance rule? Can
Ewan bring any contractual claim against Gunter?

As in the case of Byrne v Van Tienhoven, the postal acceptance rule


only applies to the letters of acceptance. There are further conditions in
which the applicability of postal rule becomes difficult, such as if the
letter of acceptance is posted to the wrong address or any carelessness
is shown by the offeree.

As in the case of Korbetis v Transgrain, where court held that offeror


may accept the risk of delay and loss but is not bound to accept the
carelessness of the offeree.
The Postal Acceptance Rule puts the risk of delay and loss on the
offeror, however offeror can’t be burdened with any more
responsibility. Offeree should also take some pre cautionary measures
to lessen any chance of inconvenience; the postal rule protects the
offeree from any inconvenience but also strictly observes the offeree if
any undue burden is placed on the offeror by his negligence.

It is likely to be said that postal acceptance rule is not applicable in this


scenario because of the offeree’s careless mistake when posting the
letter of acceptance. There is no contractual claim against Gunter to be
brought.

(c)

The third issue that arises is whether postal acceptance rule will be
applied when any one party to a contract didn’t intend? Can Mindy
bring any contractual claim against Gunter?

Postal Acceptance Rule is not automatically applied, there are some


factors which should be involved such as both parties’ consent to use
post as a mean of communication, reasonable use etc.
As in the case of Holwell Securities v Hughes, the courts held that
where offeror didn’t intend to use post as a mean of communication
and also had asked for a notice in writing.

When the offeror demands notice in writing, it is clear that he


disapproves the use of post for the communication of acceptance as in
the facts Gunter demanded notice in writing, he didn’t intend at all to
use post as a mean of communication of acceptance. It is clear from the
facts and from the case law that postal acceptance rule can’t be applied
in this scenario. It is likely to be said that Mindy can’t bring any
contractual claim against Gunter because he clearly denied the usage of
post (demanded a notice in writing) as a mean of communication but
Mindy still used post.

(d)

The fourth issue that arises is whether the counter offer kills the
original offer and can silence amount to acceptance? Can Patrick bring
any contractual claim against Gunter?

Gunter made an offer to sale the book in £400 but instead of accepting
the stated price, Patrick made a counter offer of buying the book
equivalent to £350. According to the case of Hyde v Wrench, when a
counter offer is made, it supersedes and destroys the original offer and
original offer is no more available. According to the case of Brimnes,
where the time of communication is clearly explained as when it is
reasonable to check the machine, if the message is sent in business
hours but not checked by any person, communication will be effective.
The main aspect is acceptance through silence, when Gunter listened
the message but didn’t convey his acceptance. Patrick can’t rely on his
acceptance through silence. According to Felthouse V Bindley,
“acceptance can’t be made through silence.”

Only if the offeror waives off the requirement of communication for the
offeree, but it isn’t possible and practical.

In Rust v Abbey Life, silence can’t amount to acceptance where


enforcement of contract on an unwilling party takes place.

It is likely to be said that counter offer supersedes the original offer and
the original offer isn’t available anymore and silence can’t amount to
acceptance at any cost. It is likely that Patrick can’t bring any claim
against Gunter because due to his counter offer, the original offer was
not available any more.

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