Contract Case Study Essay

Contracts are a legal binding understanding made between two or more parties to work on and to accept all the footings adhering to it. All concern demands to organize a contract during its concern life rhythm. The two of import facets of a contract are the offer and credence. The party that makes an offer in a contract is called the offerer and the party who accepts the offer made by the offerer is called the offeree. There are many footings and conditions stated in the contract which have to be accepted by both the parties to come in in to a legal binding contract.

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The offerer must province his preparedness to make a binding contract by accepting the footings to the offeree. The offeree can offer to organize a binding contract an person, group of people and to the populace. Offers made to the populace are considered as an invitation to handle since it welcomes offers by many people within a declared clip in which the offers need to be made. But there is a important difference among offer and invitation to handle. The response to an offer is normally acceptance whereas in the instance of invitation to handle, the response would be an offer. Invitation to handle is more as an invitation to do an offer by understanding the footings. Invitation to handle aids in acquiring a assortment of offers and hence increasing the opportunity to accepting a better and a more profitable contract.

In the instance survey given, Golden Antiques had posted an advertizement on Monday through the cyberspace which had stated “ For sale, three Victorian manner beds, gorgeous, ?5000 each, hard currency, will lighten up up any bed room! ” This advertizement is an invitation to handle since it was made to the general populace and a response to this invitation to handle would be considered as an offer. This relates to the instance of Partridge v Crittenden [ 1968 ] A? “ An advertizement by Partridge appeared in the magazine ‘Cage and Aviary Birds ‘, which contained the words quality British, bramble finch pricks, 25 shillings each. Partridge was charged with illegal offering for sale of a wild bird against s.6 ( 1 ) of the Protection Birds Act 1954 ” Therefore this will organize a one-sided contract since the offer to be in a legal binding contract has been decided by merely one party. David, the director of White Halls Ltd sends an electronic mail to Golden Antiques instantly stating that he is interested in purchasing all three Victorian manner beds at the cost of 4500 each and enquires about any recognition installation available upon this purchase. This is an offer made by White Halls Ltd to Golden Antiques.

Therefore in the current state of affairs, White Halls is the offerer and Golden Antiques is the offeree. The offeree ( Golden Antiques ) must make up one’s mind upon the offer made by White Halls Ltd and can take any determination since accepting or rejecting the offer is wholly in their custodies. The answer made by White Halls Ltd must be considered merely as a petition for information about the footings and other sentiment available in the contract. White Halls have non accepted the original footings and can non be considered to be a counter offer. Therefore a petition of information can non implement a binding contract. A similar instance related to this would be the instance of Stevnson, Jacques and Co V McLean [ 1880 ] A “ Mclean wrote to Stevenson inquiring if he wanted to purchase Fe ore at 40S per ton in hard currency, and the offer was unfastened boulder clay Monday. Stevenson asked if the goods were available on recognition. They received no reply. On Monday afternoon they contacted the suspect to accept the offer, but the Fe had already been sold to person else. The complainant won the instance against McLean ”

Golden Antiques responded to the electronic mail sent by White Halls Ltd seeking information about the monetary value and the recognition installation being available. Golden old-timers in response said the undermentioned “ We are non prepared to sell for less than ?5000 each. Credit installation merely available if your surety is acceptable to us. Please confirm by stopping point of concern today if interested. ”

By saying this Golden old-timers have made a counter offer to their initial offer. This counter offer states that the contract can be enforced merely at the original monetary value mentioned and their footings. They have taken into consideration about the recognition installation and have stated that it is available merely if White Halls Ltd ‘s surety is acceptable to them. They have besides mentioned that the credence to the counter offer has to be conveyed by Tuesday.

Stating the clip frame for the credence, Golden old-timers have made it really clear that the credence to this offer will non be accepted after Tuesday and hence be communicated decently. Counter offer is an offer made against the old offer by the former offeree after taking into consideration the petition of information by the offerer. This counter offer is normally the concluding offer made in the good involvement of both the parties to organize a legal binding contract. The counter offer nullifies the old offer made by the offeree. No contract can be formed if this counter offer is non accepted by the offerer. A relevant instance would be the instance of Hyde V Wrench [ 1840 ] A “ Wrench offered to sell his farm for 1,000 but Hyde declined. He offered 950 and so Wrench refused to accept. Finally Hyde agreed to purchase the farm at old monetary value but Wrench refused, therefore a counter offer destroys the original offer ”.

After supplying a counter offer, Golden old-timers will now be the offerer and White Halls Ltd will be the offeree. The counter offer will go a legal binding contract if White Halls Ltd accepts the counter offer made by Golden old-timers. Golden Antiques have specified that the offer is valid boulder clay Tuesday and any credence received after this day of the month will non be taken into consideration. This says that they need a response instantly through effectual and fast agencies of communicating. The instance related to this will be the instance of Tin V Hoffman [ 1873 ] 4 “ in this instance the offeree was specified to answer by station, any method which to be more effectual or faster than station was besides acceptable ”.

In this instance, the offerer had specified the agencies of communicating through which the credence had to be communicated. The tribunal ruled that the offeree must accept this technique of communicating or the following best alternate to pass on to the offerer. Associating this to the instance survey, Golden old-timers have said that the credence to the counter offer demand to be made by earliest on the Tuesday which made it obvious that a dependable and fast communicating was necessary. If this was non communicated decently or was delayed due to a slower agencies of communicating, the offer becomes invalid due to sink of clip.

A contract come into being merely when the latest offer or counter offer is accepted. Acceptance conveys that two or more parties have agreed to all the footings and status specified in the contract. The most of import portion of credence would be the method of pass oning. This is of import because credence is non effectual if it is non communicated. The other of import facet of credence is that the parties must obey to the manner of communicating decided upon i.e. if the offerer has specified a means a communicating through which the credence has to be communicated, it must be followed. This has to be communicated efficaciously and within the clip frame in which the offer will be valid or it will be cancelled due to sink of clip. If annulment is made before the credence takes topographic point, the offer will be cancelled.

After having the counter offer made by Golden old-timers, David faxes the credence saying his willingness to buy the three Victorian manner beds at ?5000 each. This credence missive besides includes the missive from Black Halls Ltd, the surety for White Halls Ltd which states “ It is our policy to guarantee that our subordinate, White Halls Ltd remains solvent at all times. ” This missive of credence by the offeree was non transmitted decently and hence was non received by Golden old-timers. A instance that relates to this state of affairs will be the instance of Felthouse V Bindley [ 1862 ] 5 “ Felthouse tried register a instance on the footing of breach of contract nevertheless Bindley had the instance favoured to his side since it was stated that credence was non communicated therefore a contract was ne’er truly formed ”.

David posted his credence on the same twenty-four hours at 5pm even when he was cognizant of the fact that there was a postal work stoppage on that twenty-four hours. David was good cognizant that the missive of credence would non make the offerer, Golden old-timers at the right clip. Therefore, David must hold opted for a better agencies of communicating which would be dependable, effectual and fast. The clip frame being given in the counter offer shows the urgency and importance of pass oning the credence every bit fast as possible. But posting the missive is considered as being received harmonizing to the postal regulation thereby taking to organizing a legal binding contract. Postal regulation apply where the agencies of pass oning the credence to the offer is post or telegram. Postal regulation provinces that the credence is effectual on the day of the month and clip at which the missive is posted and non when the missive of credence is received. The postal regulation ignores the facts of the clip taken to present the station and any other fortunes such as station being lost.

The instance that satisfies this will be instance between Adams V Lindsell [ 1818 ] 6 “ because to the incorrect reference the station by the Lindsell reached Adams by 5th of September. Adams replied back to Lindsell but the missive reached by 8th of October and the clip bound was till 7th of October. The suspects argued that the clip bound specified had been passed and they did n’t heard a answer hence the offer was already lapsed. However if Lindsell would hold addressed the first missive right so the complainant ‘s could hold managed to answer back in clip. However the complainants won the instance since the postal regulation was being applied ”.

On the other manus, there are many exclusions to the postal regulation. The postal regulation does non use if the method to pass on the credence has been specified by the offerer. White Halls Ltd and Golden old-timers had ab initio started pass oning through electronic mails and ways a really dependable and fast manner to pass on among the parties. Golden antiques demoing the urgency and the given clip frame show that they were anticipating a response from White Halls Ltd through electronic mail or a facsimile. This can be seen when Golden old-timers said “ Please confirm by stopping point of concern today if interested ” and can hence be taken as an exclusion to the postal regulation. The facsimile sent by White Halls Ltd was non clear and therefore the credence was non communicated efficaciously.

David from White Halls Ltd must hold tried to direct through a different facsimile machine or might seek another clip. David must hold e-mailed the credence missive to Golden old-timers which was their initial manner of communicating. This could hold been better than posting a missive of credence when he was assured about the hold which will be caused due to the postal work stoppage. Therefore, the postal is non applicable in the instance of White Halls Ltd and Golden Antiques. A similar instance would be Entores ltd V Miles far East Corporation [ 1955 ] 7 “ In this instance it shows that both the parties had instant communicating method ( that is telex in this instance ). Entores sued the M E C for transgressing from the contract. The tribunal stated that the dialogues were made by teletypewriters so instant communicating was available. The suspects tired to reason with postal regulation, nevertheless it was ruled that if credence was made on telex so the postal regulation wo n’t does n’t use ”.

Postal regulation does non use in the above detailed instance and the credence was non communicated. There has been lapse of clip and no contract was formed. Therefore the offerer, Golden Antiques is eligible to organize a new contract with the 3rd party and has no legal binding contract bing with the old party.

Roger an comptroller who has prepared the fiscal statements for Golden Antiques called up on Wednesday forenoon stating that he is interested in purchasing the Victorian manner beds. In this state of affairs, Roger is the offerer and Golden Antiques is the offeree. Roger has provided the service of fixing the fiscal statements are half the cost he normally charges. This is an illustration of past consideration and a past consideration has no value in the hereafter. There can be no consideration given for an activity performed in the yesteryear. It ‘s the parties own will to bear down for an activity to be performed and organize a contract for which he will acquire a return from the other party which are agreed upon by the parties. A relevant instance here would be the instance of Re McArdle [ 1951 ] 8 “ the understanding to pay the money was non enforceable as a contract as the work had been completed and the consideration was entirely passed ”. The offer made by Roger is valid since there has been no contract between Golden Antiques and White Halls Ltd.

To accept this offer, Golden Antiques sends a missive of annulment of the offer on Wednesday to David of White Halls Ltd stating that the Victorian manner beds are no longer for sale. A annulment is the expiration of an offer. Once a annulment has been communicated, the credence of an offer will be ignored and is no longer possible. Revocation is an exclusion to the postal regulation and is considered merely when annulment is received by the other party. In a state of affairs where offer and annulment was made on the same twenty-four hours, the determination will depend on whether the offer or the annulment was received foremost.

This will be further explained by the instance of Byrne & A ; Co V Leon Van Tienhoven [ 1880 ] ? “ Tienhoven tried to retreat the offer, they posted the missive by 8th of October which was received by Byrne & A ; Co by the 20th of October. It was ruled that the offer could n’t be withdrawn since the credence was already into being due to the postal regulation ”. In this instance the clip spread between the annulment and offer being received is really little and is hence harder to judge whether annulment is effectual or non. Golden Antiques received the credence missive by station at 3:45pm on Thursday and the facsimile on annulment is received until 4:00pm. In my sentiment annulment should be effectual since the poster of the missive is non considered as a agency to pass on credence in this instance.

Advise on the parties legal place:

There are three parties in this instance which are Golden Antiques, White Halls Ltd and Roger. The above detailed instance shows that there is more grounds in the favor of Golden Antiques than that of David. Golden Antiques have obeyed the footings of organizing a contract and on the portion of annulment. They have made it clear on the footings of the contract and besides hold given the clip frame in which the other party must react and give in their credence.

The advertizement made by Golden Antiques is an invitation to handle. David the director of White Halls Ltd makes an offer and negotiates the monetary value of the Victorian manner beds. But this is rejected by a counter offer made by Golden Antiques to David and specifies the clip frame in which he must convey his credence. David tried to facsimile the credence missive but due to proficient troubles was unable to make so. He so posted the missive to convey the credence which he was good cognizant of non being able to do on clip. This offer was non affectional after Tuesday due to sink of clip. David must hold used a better agencies to present the credence. He could hold adopted the initial manner of communicating which was electronic mail.

Revocation missive was so sent by Golden Antiques to David of White Halls Ltd saying that the beds are no longer available for sale. Harmonizing to the postal regulation, the annulment has to be received before the credence was received. But in this scenario, the postal regulation should be ignored since posting a missive was non an acceptable signifier of communicating in a state of affairs with a short clip frame. Therefore David will non be able to take any legal action against Golden Antiques. On the contrary, it will be considered as David ‘s mistake of non sing the footings of the contract.

Legal advice to the parties:

The three parties involved in this instance are Golden old-timers, White Halls Ltd and Roger – the comptroller. From the given clear image of the instance above, it is quiet comprehendible that The Golden Antique ‘s side of the instance was more convincing as compared to that of David. If the director of white halls ltd, be probably to action aureate Old-timers, they will non be accused for any claims. Golden old-timers had made its company ‘s purposes really clear from the really beginning, i.e. when they had foremost advertised their invitation to handle. David foremost makes an offer demoing his involvement towards the purchase of the Victorian manner beds, which was instantly rejected by doing a counter-offer by aureate Old-timers. In the offer it was really good stated that if credence non conveyed by Tuesday which in bend makes the postal regulation irrelevant. When the credence sent by facsimile was non communicated due to transmission mistakes, David should hold used some other agencies of communicating which would hold been every bit fast and effectual. As the credence was non communicated on clip the offer has lapsed.

Golden old-timers so sent a missive saying the annulment of the offer as they had now decided to sell the beds to Roger and are lawfully contracted with White Halls. Even though the Revocation of the offer was received or conveyed after the reception of the credence missive from David, this will be regarded as David ‘s mistake for non following with the footings of the offer. Therefore, it is non advisable to take any legal actions against Golden Antiques because the justice finding of fact will be on the favor of Golden Antiques.


  1. Partridge v crittenden { 1968 } 1 WLR 1204, { 1968 } 2 ALL ER 421, ( 1968 ) 112 SJ 582
  2. Stevenson, jacques & A ; Co v Mclean { 1880 ) 5 QBD 346
  3. Hyde V Wrench ( 1840 ) 3 Beav 334
  4. Tin V Hoffman ( 1873 )
  5. Felthouse V Bindley ( 1862 ) 11 CBNS 869
  6. Adams V Lindsell ( 1818 ) 1 B & A ; Ald 681, { 1818 } 106 ER 260
  7. Entores Ltd V Miles Far East Corporation { 1955 } 2 QB 327, { 1955 } 3 WLR 48, { 1955 } 2 All ER 493, CA
  8. McArdle, Re { 1951 } Ch 669, { 1951 } 1 All ER 905, ( 1951 ) 95 SJ 651, CA
  9. Byrne & A ; Co v Van Tienhoven & A ; Co ( 1880 ) 5 CPD 344


  • Ewan McIntyre, Business Law, 4th erectile dysfunction. Pearson Longman, 2008
  • Catherine Elliot & A ; Frances Quinn, Contract Law, 7th edition, Pearson Longman, 209
  • Charles Wild & A ; Stuart Weinstein, Smith and Keenan ‘s Company Law, 14th edition, Pearson Longman, 2009

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