Scribd
Upload
392 views2 pages

B Law - Assignment Answer Guide

1) Mary posted an advertisement for a rice cooker which was an invitation to treat, not an offer. Jane called Mary and made an offer to purchase the rice cooker for $900, which Mary accepted by instructing Jane to make a bank transfer by September 16th, forming a contract. 2) Peter called Mary about the rice cooker but did not make an offer. He left a voicemail proposing to buy four rice cookers at $700 each, but an offer is not effective until accepted, and Mary did not accept before rejecting the proposal. 3) Jane and Mary formed a valid contract for the sale of the rice cooker, so Mary would be in breach if she fails to deliver it.

Uploaded by

Wai Shuen Luk
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
392 views2 pages

B Law - Assignment Answer Guide

1) Mary posted an advertisement for a rice cooker which was an invitation to treat, not an offer. Jane called Mary and made an offer to purchase the rice cooker for $900, which Mary accepted by instructing Jane to make a bank transfer by September 16th, forming a contract. 2) Peter called Mary about the rice cooker but did not make an offer. He left a voicemail proposing to buy four rice cookers at $700 each, but an offer is not effective until accepted, and Mary did not accept before rejecting the proposal. 3) Jane and Mary formed a valid contract for the sale of the rice cooker, so Mary would be in breach if she fails to deliver it.

Uploaded by

Wai Shuen Luk
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

LW2903 Business and Law - Assignment Model Answer [957 words]

This is a Contract Law question. In particular, it is concerned with formation of a


contract. A contract is defined as a legally binding agreement between two or more
parties. To form a binding agreement, the first requisite is that the agreement consist
of an offer, acceptance, consideration and intention to form legal relations. At least
two parties - one of them, an offeror, makes an offer which the other, the offeree
accepts. [Introduction/Identify the issue: 5 marks]

An offer is an expression of willingness to contract made with the intention that it


shall become binding on the offeror as soon as it is accepted by the offeree. It is
important to distinguish between an offer and an invitation to treat at this stage. By
looking at the facts, Mary posted an advertisement in the Sunday Post on 9 September
2018 for the sale of the rice cooker. With that in mind, a person is said to be making
an invitation to treat by inviting others to make an offer. Where a person accepts the
terms of the invitation, he makes and offer but there is still no contract. The maker of
the invitation is free to accept or reject the offer. Common examples of an invitation
to treat includes an auction, display of goods in a shop, tenders and advertisements.
For advertisements, the case of Partridge v Crittenden (1968) illustrated that an
advertisement was said to be an invitation to treat not an offer. The case was
concerned with an advertisement in the periodical “Cage and Aviary Birds” under
general heading “Classified Advertisements” which contained, amongst other things,
the words “Quality British Bramblefinch  cocks, Bramblefinch hens 25 s. each”. In no
place was there any direct use of the words "offer for sale". This is similar to the
current case where the advertisement described the product, the contact number and
the name of the contact person. Another case which can illustrate this point is in the
case of Grainger & Son v. Gough - Lord Herschelle said “dealing with a price-list
does not amount to an offer to supple an unlimited quantity of the wine described at
the price named, so that as soon as an order is given there is a binding contract to
supply that quantity, because if that is the case, the merchant might find himself
involved in any number of contractual obligations to supply wine of a particular
description which he would be quite unable to carry out”. By analogy, the
advertisement placed by Mary, does not imply there is unlimited supply of the product
and unlike the case of Carlill v Carbolic Smoke Ball Co [1892] where it constitutes a
definite promise, Mary’s advertisement can only be regarded as an invitation to treat
only. [Offer distinguished from ITT: 35 marks]

For Jane, she called Mary by phone on 10 September 2018, having inquired the
details, Jane made a definite promise as the offeror to the offeree, Mary with the
intention to be bound by the terms to purchase the rice cooker at $900 without further
negotiation. Mary, then gave a final and unqualified acceptance of the terms of an
offer by informing Jane to make a bank transfer to her account by 16 September 2018.
A contract is said to be made at this stage because acceptance was effectively
communicated. Moreover, valuable consideration was provided by both parties. In the
case of Currie v Misa (1875), Lush J said “a valuable consideration must constitute
either a benefit accruing to one party, or a burden suffered or undertaken by the
other”. The exchange of the rice cooker for money constitute valuable consideration.
There is intention to form legal relations in this case, so Mary is in breach of contract
by not performing her side of the obligation. [Formation x 4 elements: 20 marks]

For Peter, although he called Mary with the view to buy the rice cooker, but he did not
place the order on Monday. On Tuesday, when he decided to negotiate the price of
four rice cookers with Mary, Mary missed the call and he left a message to say that “if
I do not hear from you by 18 September 2018, I assume you are fine with this”. At that
moment, although it appears Peter is making an offer because he proposed the sale of
the rice cookers at $700 each, but there must be effective communication. In this case,
Mary did not hear the voicemail till 18 September 2018, and she informed him that
she had sold all the rice cookers. Once there is an offer, it is up to Mary (the offeree)
to accept, reject or even make a counter offer. In this case, it is a clear rejection when
Mary sent him a message by SMS. [Offer/Communication: 10 marks]

Peter wanted to insist on his right on the contract but silence does not amount to
acceptance. The general rule is that acceptance must be communicated to the offeror,
Peter. In the case of Felthouse v Bindley (1862) uncle and nephew discussed buying a
horse from his uncle. He offered to purchase the horse and said “If I hear no more
about him, I consider the horse is mine for £30 15 s. It was held that silence does not
amount to acceptance. If the case is applied to the current issue, Peter as the offeror
cannot impose a contract on Mary against her wishes. [Silence: 15 marks]

In conclusion, the voicemail that Mary left on Jane’s phone on 18 September would
not make a difference. As Jane had already made the bank transfer to Mary on 15
September. The contract had already been formed and Mary is in breach of contract if
she fails to deliver the rice cooker to Jane. As to Peter, the contract never came into
existence, and there is no contract between Peter and Mary. [Conclusion: 15 marks]

You might also like