COMMON LAW

Common Law

Common Law

Task One

With regard to the scenario John is only entitled to make the final deal with Dan whatever the price they've settled for as the binding agreement took place only between John and Dan in case of Ben and Chang things did not reach an agreement of any sort neither Ben could convey his message to John at the right time. A contract is an agreement between parties which is binding in law. Furthermore the rights and obligations of the parties under a contract may be enforced by the courts. The courts may compel performance of contractual obligations by the party in default or, more commonly, may award damages for breach of contract.

For a contract to be formed four basic elements must be present - offer, acceptance, consideration and the intention to create legal relations. Generally much negotiation takes place between the parties before an agreement becomes binding and a contract is formed. It is important therefore to recognise the precise moment when a contract is formed as this is when the parties assume contractual obligations and the consequent risk of liability if the terms of the contract are breached. An invitation to treat is different to an offer as it only invites the party to make an offer and is not intended to be binding. An example of an invitation to treat is an advertisement of goods for sale, with a price attached, in a shop window. Under the law of contract, as an invitation to treat, the customer cannot insist on buying such an item on display and the shop would not be obliged to sell the item at the price indicated. Postal Rule - this applies when it is reasonable to use a form of delayed communication such as the post. Acceptance is communicated as soon as the letter of acceptance is posted and remains effective even if the letter is then lost, delayed or destroyed. The letter must however be properly posted and addressed. Adams v Lindsell (1818) 1 B & Ald 681. Household Fire Insurance Co. v Grant (1879) 4 Ex D 216.

It is sensible to make provision in the terms of the offer as to the method and timing of the acceptance of the offer so as to avoid the use of the postal rule. At the moment no statutory or common law rules have been established to govern acceptance of an offer by e-mail. If no method of communication is specified then acceptance may be communicated by any method. If the method of communication of acceptance has however been specified then the offer can only be accepted in that manner. If acceptance is attempted to be communicated in a different manner then this would amount to a counter offer. Can an offeree withdraw his acceptance, after it has been posted, by a later communication, which reaches the offeror before the acceptance? There is no clear authority in English law. The Scottish case of Dunmore v Alexander (1830) appears to ...