Contract Law
Establishing the formation of a legally enforceable agreement
Step 1
The legal issue is that there must be an offer and acceptance of the offer for an agreement to be considered legally binding.
Step 2
As mentioned above, an agreement is legally binding or legally enforceable when there is an element of offer followed by an acceptance. An offer encompasses a statement signified by both the offeror and offered, demonstrating the willingness to enter a legally enforceable agreement (Lambiris and Griffin, 2017). An offer is promissory, which implies that both the offerer and the offered promise to do something for each other. For example, the offeror may promise to deliver goods at a certain cost while the offeree may promise to pay the amount involved should the goods be delivered safely. Secondly, an offer must be sufficiently complete, which implies that it has to address aspects of time and price among others when communicated to a person. In other words, it has to set all the essential factors of a workable transaction. Importantly, an offer aims to establish a contract if it is accepted. In Partridge v Crittenden [1968] 1 WLR 1204, Arthur partridge placed an advertisement in “Cage and Aviary Birds” periodical. In the advertisement, he wrote: “Quality British ABCR…Bramblefinch cocks, Bramblefinch hens 25s, each. Thomas Thompson ordered for one bird from Partridge, enclosing a check of 30s. Anthony Crittenden, acting on behalf of RSPCA sued Partridge FOR violating section six of the Protection of Birds Act 1954 (UK) by selling a live wild bird. Partridge was then convicted for the offense as the magistrate determined that the advertisement was an offer for sale. Partridge appealed the case. The legal issue constituted whether the advertisement satisfied the requirements of an offer for sale, or was simply an invitation to treat (Lambiris and Griffin, 2017). The UK High Court held that the advertisement did not satisfy the requirements for an offer. It held that there was no mention, in the advertisement, of an offer for sale. This case clarifies that an offer must be sufficiently clear and complete and that it must demonstrate the offerer’s willingness to enter a contract. It is also important to reiterate that an offer can be rejected. According to Andrews (2015), when an offer is rejected, it is destroyed and rendered invalid. There can also be a counteroffer in which case the offeree rejects the original offer but makes a new offer. In this case, the original offer becomes void.
An offer must be accepted for it to be considered contractually bound. Acceptance describes the offeree’s willingness to enter a contract (Lambiris and Griffin, 2017). The acceptance is directed to the person who made the offer. It is also communicated instantaneously to the offeror, indicating that the offeree has accepted the offer, wholly. Importantly when the offeree accepts the offer, it must be in the same terms as offered and not subject to conditions. Acceptance occurs when the offer is still in existence. For an offer to be effective, communication has to be instantaneous or face to face. In other words, the acceptance should take place as soon as the offer is received. It is generally acceptable for the acceptance of an offer to take place over telex, fax or email, provided that the offeror receives the acceptance, to ascertain that the communication is complete (Adams & Nehme, 2015). In this case, general acceptance is used without considering the postal acceptance rule. For example, in Adams v Lindsell (1818) EWHC KB J59, the court established the ‘mailbox rule’, which implies that an offer is considered valid from the moment acceptance is mailed (Adams & Nehme, 2015). In this case, the defendants offered to sell some wool to the plaintiffs through a post and requested that the plaintiffs respond by 7 September. However, the defendants had mislabelled the letter which did not reach the plaintiffs until 5 September. The plaintiffs responded to the letter on the same day but did not reach the defendant until 9 September due to delays. Having failed to receive the acceptance from the plaintiff, the defendants sold the wool as they thought that the plaintiff was not interested. The plaintiffs sued to claim that the contract became valid from the moment the offer was posted. The defendants disagreed that the contract could not be valid until the acceptance was communicated to the offeror. The court sought to establish when the acceptance of an offer occurs (Lambiris and Griffin, 2017). The courts outlined that it was not feasible to consider that acceptance of an offer occurs when it is communicated to the offeror. Instead, it was considered a “meeting of the minds” when the plaintiff wrote the acceptance and posted it to the offeror. It was only at that time that the contract was established. The court further outlined that the acceptance did not meet the requested timeframe. However, it was established the defendant’s fault that the letter reached the plaintiff late. The defendant had mislabelled the letter.
Step 3
The offer made by Cole to Noah was sufficiently complete when Cole emailed Noah offering to supply airline tickets to the United States and accommodation in New York, Miami, and Las Vegas, which would allow him to attend several American Baseball League games and buy merchandise. Cole offered Noah a package of $14,800 to stay in the United States for three weeks. Cole is also willing to receive Noah’s acceptance through email, which gives the offer its promissory nature. On receiving the offer from Cole, Noah instantly responded to the email indicating his acceptance of the offer as it is. The acceptance of the offer by Noah is done using an instantaneous method; email. Cole indicated that should Noah accept the terms offered, he should indicate by email before noon Wednesday. Noah accepted the terms and responded by email within the timeframe provided by Cole. As a result, there is a valid acceptance of the offer (Andrews, 2015). However, Cole did not see the email as he was having internet disconnection due to an unpaid bill, and only read the email by Friday when Cole could no longer provide the agreed package. The postal acceptance rule outlines that the offeree’s acceptance of an offer comes into effect the moment the offeree responds or posts the acceptance. However, in most cases, the postal acceptance rule does not apply to emails since they are a virtually instantaneous method of communication, and the delays associated with them may not be as pronounced as in postal acceptance. Regardless, Cole’s inability to read the email was due to Cole’s fault. Consequently, Cole is estopped from denying that communication took place.
Step 4
In conclusion, there is enough evidence that an offer was made and accepted, and that all the elements of an agreement are met, which implies that there was an agreement between Noah and Cole. Also, Noah reserves the right to request Cole to provide Noah with flights to the United States and accommodation, which will ensure that Noah attends the games and buy necessary merchandise.
Establishing the satisfaction of intention and Consideration
Step 1
The issue, in this case, is to prove that there is an intention to enter a legally binding agreement. This part establishes whether both intentions and considerations have been satisfied in the case (Lambiris and Griffin, 2017).
Step 2
The intention to enter a legal agreement implies that even as much as the parties agreed without directly and overtly making the intentions to enter a legally enforceable relation, it can still be determined through the court that an intention to do so existed. Agreements between family members do not necessarily imply the existence of a contract. It is upon the court to objectively examine whether a contract exists (Lambiris and Griffin, 2017). The agreements between family members usually do not involve bargaining or negotiation. Family agreements are considered to bear no intentions for legal relations as they are mostly based on affection and mutual trust. In Woodward v Johnson, Mrs. Woodward offered to help her husband with work in the establishment of a gravel supply company. She worked hard in the company, especially during the weekends for 18 months. Her husband made a lot of profit from this work and failed to formalize Mrs. Woodward’s interest in the company. The legal issue was whether there was an intention to enter a contract as the parties were family. The agreement, in this case, was domestic and since Mrs. Woodward worked willingly, there was no need to see as there was no intention to enter a legally binding agreement.
Consideration is an important element of a contract. It describes the money or payment exchanged between the parties in the agreement (Lambiris and Griffin, 2017). Consideration describes the subject of bargaining or negotiation between the parties in the agreement. Consideration is also one of the primary reasons that make parties enter an agreement. It is an item of value to both parties and is usually exchanged for the promise of performance or the actual performance by the other party. In a contract, one consideration is given for another consideration. Promising to pay an amount of money for the performance of a task is a consideration. The performance of the task is also a consideration. A contract can become rescindable or unenforceable when one party fails on its part of the consideration (Andrews, 2015). A consideration is deemed failed when it is less than expected, destroyed or damaged, or when the performance is poor. Acts that are immoral or illegal are not considerations. For example, gambling, prostitution, or hiring another person to commit a criminal offense is not considerations. Consideration does not have to be necessary for equal value as the other. It can be anything as long as both parties agree that it defines their agreement or contractual relationship. For example, Thomas v Thomas, Mr. John Thomas shortly before dying expressed that his wife can live in his house for £1 per year to cover the ground rent. The court found that even though john Thomas was dead, the agreement was valid.
Step 3
The intention to enter a contract is underlined by several factors. These include spelled-out obligations, there is a considerable expense, substantial detriment, and inconvenience involved (Andrews, 2015). These factors are significant, in this case, to demonstrate that it was likely that the parties intended to enter a contract. However, both Noah and Cole are families. Their agreement enjoys the presumption of no legally enforceable relations. The arrangement of this agreement does not also make any overt intention that one party is interested in the legal enforceability of the agreement. Consequently, likely, this case does not meet the merits of intentions to enter a legally binding agreement. Both parties are family and do not express, not even in the slightest sense that they need legal enforcement. Both Noah and Cole enjoy mutual trust as brothers.
In terms of consideration, this case meets various aspects of consideration. As already established above, consideration is always the subject of a contractual agreement. A consideration describes the materials exchanged between parties (Lambiris and Griffin, 2017). In this case, Noah wants to travel to the United States, primarily to go and watch American baseball League (ABL) and buy more sports memorabilia. Cole and FirstBase Pty Ltd are capable of providing Noah with the requisite travel arrangements and make sure that he attends the games and enjoy most of his interests in America. What Cole and Firstbase pty Ltd require is for Noah to pay $14,800, which Noah gladly, without bargain accepts. Noah promises to pay the money while Cole and his travel agency promise to facilitate Noah’s travel. These exchanges describe considerations. Significant exchanges of promises have taken place.
Step 4
In conclusion, the agreement between Noah and Cole likely satisfies the element of intentions to enter a legally binding agreement. However, the fact that the agreement is between members of a family, there is the presumption of no contract even if the considerations are adequate to establish that a contract exists.
References List
Adams, M.A., and Nehme, M., 2015. Business Organisations Law Guidebook. Oxford University
Press.
Andrews, N., 2015. Contract law. Cambridge University Press.
Lambiris, M.A., and Griffin, L., 2017. First Principles of Business Law: Textbook and study Modules. Oxford University Press.