Analyze The Impact Of The Requirements For A Valid Contract
Analyse The Impact Of The Requirements For A Valid Contract In A Given
Analyse the impact of the requirements for a valid contract in a given situation. In the Westshire Times on 2nd September there was an advertisement to sell a 1998 Porsche 911 for £21,000. The advertiser was Jamal, giving a contact address. On 7th September, Bob wrote to Jamal stating that he was interested in buying the car for £20,000. On 9th September, Jamal wrote back to Bob stating that he could not sell the car for less than £20,500. On 10th September Jamal wrote again to Bob stating that he would now sell the car for £20,000, and asking Bob to bring the money and collect the car. Bob now refuses to collect and pay for the car. Advise Bob.
Working in pairs, you will be required to prepare and give a presentation and prepare an information sheet, advising Bob as to what are his legal rights in the above case study. Further, working in pairs, you are required to choose one of your real contracts, and create a scenario like the one above, to formulate a legal problem requiring advice. You will be expected to advise the party affected. This will also form part of your presentation. You should consider the strengths and weaknesses of the formation of a contract including relevant problems such as:
- What is good or weak about the offer.
- The implications of pricing through the invitation to treat.
- Clarity of communication and capacity for acceptance.
- The likelihood of counteroffers and their effect.
Paper For Above instruction
The scenario outlined involves key principles of contract law, particularly the concepts of offer, acceptance, and the formation of a binding agreement. To analyze Bob's legal rights, it is essential to examine whether a valid contract has been formed between Jamal and Bob, considering the specific communications and actions of the parties.
The Nature of the Advertisement as an Invitation to Treat
The advertisement published in the Westshire Times constitutes an invitation to treat, not an offer. Under English contract law, advertisements generally are considered invitations to negotiate or invite offers, rather than offers themselves (Carlill v Carbolic Smoke Ball Co [1893]; Partridge v Crittenden [1968]). This means that Jamal's advertisement for the Porsche was an invitation for potential buyers to make offers to purchase the vehicle at the advertised price.
Jamal's Communications and Their Impact on Contract Formation
When Bob wrote to Jamal expressing interest in purchasing the car for £20,000, he was making an offer. Jamal's response on September 9, stating he would not accept less than £20,500, constituted a counteroffer. Importantly, a counteroffer effectively terminates the original offer and is considered a new offer (Hyde v Wrench [1840]).
The subsequent letter from Jamal on September 10, indicating willingness to accept £20,000, can be viewed as a new offer. For a binding contract to exist, Bob would need to accept this new offer within a reasonable time frame, and acceptance must be communicated to Jamal.
Acceptance and Contract Formation
Acceptance must be unequivocal and communicated effectively. If Bob refused to collect the car or pay, he would not have accepted Jamal's offer. Since Jamal's last letter was an invitation for Bob to bring the money, the question remains whether Bob's failure to act constitutes rejection or mere non-acceptance.
Based on the principles of offer and acceptance, since Bob has not accepted the final offer and has refused to perform the required act (payment and collection), no binding contract has been established. Consequently, Jamal is not legally compelled to sell the car to Bob.
Implications of Pricing and Invitation to Treat
The advertisement, being an invitation to treat, does not bind Jamal to sell at £21,000. Only upon mutual agreement—an actual offer made by Bob, and acceptance by Jamal—would a contract be formed. The pricing in these communications significantly influences the negotiations; the initial advertisement does not constitute an offer capable of acceptance, but rather an invitation for offers.
Strengths and Weaknesses in Contract Formation
The main strength in this case lies in the clarity of communication: Jamal's last letter indicating willingness to sell at £20,000, which could be considered a unilateral offer. However, a weakness exists if Bob's actions do not meet the criteria for acceptance, such as failing to accept within a specific timeframe or failing to communicate acceptance properly. Additionally, the open nature of negotiations introduces the risk of counteroffers, which may alter or terminate the original offer.
In conclusion, Bob’s refusal to accept Jamal's final offer and to perform the required act of payment indicates that no binding contract exists. Therefore, Jamal is under no legal obligation to sell the car to Bob. For Bob, legal rights hinge on the precise timing and manner of acceptance, as well as the legal nature of the advertisement and subsequent communications.
References
- Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
- Hyde v Wrench [1840] 3 Beav 334
- Partridge v Crittenden [1968] 3 WLR 158
- Fisher v Bell [1961] 1 QB 394
- Currie v Misa (1875) LR 10 Ex 153
- Storer v Manchester City Council [1974] 3 All ER 280
- Harvey v Facey [1893] AC 552
- Griffiths v Morgan [1874] LR 9 CP 266
- Millar v Taylor (1769) 4 Burr 2303
- Poole v Huskisson (1843) 11 M & W 777