Commercial Law Essay Sample

The issue between Brian and Amy is if there was an enforceable contract and if after Brian verbally offered to sell the auto for $ 10. 500. was Amy’s response was a mere enquiry or a counter-offer? While Amy and Brian were negociating footings a contract was non in topographic point. As per Hyde V Wrench ( 1840 ) . a counter-offer does non amount to acceptance but is a rejection of the original offer. which so lapses. However. a mere enquiry is non an credence or a rejection. therefore the option of either accepting or rejection is still available as per Stevenson. Jacques & A ; Co v McLean ( 1880 ) . Amy’s response included ‘but I will necessitate a roadworthy’ indicates that she is merely prepared to hold to the footings that are different to Brian’s original offer. To find if a response is a counter-offer or a mere enquiry a sensible individual trial is undertaken. As per Poweiga V Daley ( 1985 ) ‘the consequence ( of the response ) on a sensible individual standing in the offeror’s shoes’ . As per the postal regulation indicated in Adams V Lindsell ( 1818 ) . the credence of the offer is deemed to hold occurred when correspondence is decently posted. non when received by the other party.

In Brian and Amy’s scenario. Amy made a counter-offer every bit shortly as she posted a missive to Brian ( which negated his original offer of $ 10. 500 ) . In bend. Brian posted his new offer on the same twenty-four hours. As both letters were sent in ignorance of one another’s offers. there can be no credence of either offer. With no credence. there is no enforceable contract. As indicated in Tinn V Hoffman & A ; Co ( 1873 ) . ‘There was no contract. Neither missive amounted to an credence because both had been sent in ignorance of the other parties offer and. therefore. could non be an credence of it. ’ However had the communicating been via an instantaneous or near instantaneous method ( electronic mail or facsimile ) . the offer/counter offer/acceptance or refusal is deemed to hold occurred at the clip of reception of correspondence. non when it was sent. ( Entores Ltd V Miles Far East Corp. 1955 )

Based on the above information. Amy’s question was to be deemed a counter-offer and the extra correspondence between Brian and Amy did non ensue in an credence of any offer doing no enforceable contract. Therefore in this case. Amy is non obliged to travel through with the auto purchase. To supply a more a thorough analysis of Amy and Brian’s scenario. more information would be advantageous in finding the result of this scenario. Further information could include ; how did Amy happen out how Brian was selling his auto? Was there a clip frame on Brian’s original offer? These inquiries are relevant in finding if Amy may be apt to buy Brian’s auto. -How did Brian publicize his auto was for sale?

If Brian advertised his auto in a local newspaper/online. he has ‘invited to treat’ a broad scope of possible clients. Brian is non obliged to sell the auto to Amy or anyone else nor is Amy or anyone else obliged to purchase the auto from Brian. ( Grainger & A ; Sons V Gough. 1896 ) . This would besides be the instance if Brian owned a auto franchise. As per Pharmaceuticals Society ( GB ) V Boots Cash Chemists ( 1952 ) . displayed goods with clearly marked monetary values are besides regarded as an invitation to handle ; therefore no duty exists for any possible party. -Was there a clip frame on Brian’s original offer?

If Brian/Amy had set a clip frame around their offer. this would hold helped clear up if a contract was in topographic point. ( Dickinson V Dodds ) . Determining if a contract was in topographic point is the chief issue in Amy and Brian’s instance. any stairss that are taken to better the communicating between the two of them would hold made it easier for them both to find if an understanding was in topographic point and non be in this state of affairs. Even if the above losing information was available. there was no credence of an offer ; hence there was no enforceable contract between Brian and Amy.

Scenario Two
The issue that Sam has in his scenario with Peter is was there an enforceable understanding? The handwritten understanding on a piece of wrapping paper contained both names and the monetary value agreed upon. The two clauses in the handwritten understanding. can find if what Peter and Sam have signed is in fact an enforceable understanding. The handwritten understanding can be considered to be a conditional credence as the first clause is ‘subject to’ a clause being completed. As per Masters V Cameron ( 1954 ) . the tribunal held the understanding was non in its concluding signifier. and non enforceable. However. this instance the clause was capable to the solitors credence of the clauses. In Sam and Peter’s scenario. the elaborate understanding was to be indistinguishable to the handwritten understanding already signed. Sam may reason that as per Veivers V Cordingley ( 1989 ) –‘while accepting that an offer can normally be withdrawn at any clip before credence. the tribunal found that. where the offerree has already started making the Acts of the Apostless which. when completed. will represent credence of the offer. the offer becomes irrevokable. ’ As Peter’s canvasser has non yet drawn up the formal understanding. does this indicate that there is no credence. and hence no understanding? The following question in this scenario is the handwritten understanding although ‘subject to contract’ in its concluding signifier?

‘Where parties have reached conclusiveness and make non mean to change their understanding. but want to postpone public presentation of all or portion of it until it has been incorporated into a formal document’ ( Graw. S – An Introduction to the Law of Contract. 7th Edition. Page 85 ) . As both Sam and Peter have really reached conclusiveness in their understanding. they have a binding and enforceable contract. ‘Subject to contract’ clauses may postpone the duty that Sam has to Peter ( Internet Explorer. Making payment of the sedimentation ) . nevertheless the write up of the formal understanding. does non alter nor vary it. therefore both parties are bound. In Niesmann V Collingridge ( 1921 ) the mention to the formal understanding admiting the same footings in the handwritten understanding was to be signed before Sam would do an initial payment. The formal papers was non intended to change what the parties had already agreed upon. and conclusiveness had been reached. Unfortunately for Sam. as per ‘Geebung Investings Pty Ltd V Varga Group Investments ( No 8 ) Pty Ltd ( 1995 ) . “The mere fact that the parties contemplate the executing of a formal contract. subsequent to an informal understanding. does non intend that the informal understanding is non soon binding” .

If Sam decides he wishes to revoke his offer. due to an informal understanding. Peter will reason that credence has been made. The informal understanding may be written on a piece of wrapping paper ; nevertheless it does incorporate the three indispensable elements for an understanding to be adhering. the parties. the capable affair and the monetary value. ( Hall V Busst ( 1960 ) . In the scenario. Peter and Sam agreed upon monetary value and ‘other details’ whilst negotiating. The ‘other details’ that were agreed upon. could potentially assist Sam reason that there was no credence of the offer. The other piece of losing information in this scenario is there is no clip frame based on the first clause of the informal understanding. As the payment and transportation of ownership is dependent on the formal understanding being signed – how long is Sam’s credence valid for? Without the formal understanding. financess can non be transferred and the alteration of ownership will non take topographic point.

‘Reasonable time’ will differ from instance to instance and will depend on what is deemed to be fair by the tribunal. In Ballas V Theophilos ( No 2 ) ( 1957 ) . the High Court deemed the understanding had lapsed. due to the fact the subsister took 16 months to exert his option. In the Peter and Sam scenario. it has merely been a few yearss. This sum of clip would non represent a oversight of the understanding. The value of the concern and its assets would non hold fluctuated over a ‘few days’ . My advice to Sam is based on the Queensland Supreme Court opinion in Commercial Bank of Australia Ltd V GH Dean & A ; Co Pty Ltd ( 1983 ) . if he argues that no contract exists as the first clause of the handwritten understanding was non met. the tribunal will govern in favor of Peter as the parties have agreed on all affairs in the informal understanding and the purpose of a written contract is a mere formality.

Mentions

-Graw. S – An Introduction to the Law of Contract. 7th Edition. Cases Referred to: –
-Hyde V Wrench ( 1840 )
-Stevenson. Jacques & A ; Co v McLean ( 1880 )
-Poweiga V Daley ( 1985 )
-Adams V Lindsell ( 1818 )
-Tinn V Hoffman & A ; Co ( 1873 )
-Entores Ltd V Miles Far East Corp ( 1955 )
-Grainger & A ; Sons V Gough ( 1896 )
-Pharmaceuticals Society ( GB ) V Boots Cash Chemists ( 1952 ) -Dickinson V Dodds
-Masters V Cameron ( 1954 )
-Veivers V Cordingley ( 1989 )
-Niesmann V Collingridge ( 1921 )
-Geebung Investings Pty Ltd V Varga Group Investments ( No 8 ) Pty Ltd ( 1995 ) -Hall V Busst ( 1960 )
-Ballas V Theophilos ( No 2 ) ( 1957 )
-Commercial Bank of Australia Ltd V GH Dean & A ; Co Pty Ltd ( 1983 )