CASE LAW

Case Law

Case Law

Case Scenario

On 1 September, Albatt plc sent a letter to Bugett Ltd, with whom they had been negotiating, offering them a contract to service all Albatt's electronic processors each month for the next five years at a cost of £10,000 per annum. The letter said that Bugett should reply by return of post. Unfortunately the letter contained an error in the address and was not delivered to Bugett until 6 September. Bugett replied at once, accepting. This letter was posted at 11 am on 6 September. In the meantime, on 4 September, Albatt had received an offer from Cansys Ltd to do the servicing work for £9,000 per annum. Albatt, having heard nothing from Bugett, telephoned Cansys on 5 September and offered them the contract at £8,000. Cansys accepted. Albatt sent a fax to Bugett on 6 September telling them that the offer of 1 September was withdrawn. This fax was received on Bugett's fax machine at 10:45 am on 6 September, but not read by anyone until 5 pm on the same day. Advise Albatt, Bugett and Cansys.

Analysis

A contract is an agreement between two or more parties, entered into freely. To be a valid and enforceable contract it must have an element of offer, acceptance and consideration. Albatt plc governs the law of services electronic processors. The terms and conditions of insurance between the service provider and insured are in accordance to English Contract Law. The insurance service provider will make a written or oral offer in form of a quote. Albatt plc sent a letter to Bugett Ltd, with whom they had been negotiating, offering them a contract to service all Albatt's electronic processors each month for the next five years at a cost of £10,000 per annum and the last day of the acceptance is lessen by either making contract or disagreeing to the service via yearly basis. This agreement will therefore, constitute both an acceptance (via signed agreement) and also consideration in form of a payment.

As this offer of Albatt plc is not vague; it must have been made with a serious intention of creating a legally binding contract with Bugett Ltd. An acceptance to an offer can be made expressly or by conduct (in form of a deposit). However, the acceptance must be unconditional. The acceptance is complete once it has been communicated to the offerer. However in the Bugett Ltd case became complicated because Bugett Ltd had not received the offering letter even though the company wants to negotiate with Albatt plc. However as per the law the offer can terminate in the following circumstances, if the offerer states that it shall be accepted before a specific time has lapsed or a valid revocation of the offer or via a notice of rejection of the offer.

The nature of an offer is a critical element of a contract. An offer is an expression of a willingness to contract on certain terms made with the intention that a binding agreement will exist once ...