Harry’s Hiccup (Draft - Not Submitted Assignment)
Word Count 1393
Initially from the transcript Harry appears to have made an offer and breached his terms; however, it is not Harry’s integrity that must be considered but the law regarding to contract, to decide if Harry is actually in breach of a contract. Therefore, in order to advise Harry, it is necessary to consider the law relating to a contract: in that there must be an intention to create legal relations; there must be an agreement made by offer and acceptance; and there must be consideration. (BBP 2009) With regards to Harry the main points are when the offers were made and when they were either: revoked, counter-offer or accepted and must be considered objectively not subjectively when deciding the facts based upon case law. (Upex and Bennett 2004)
With regards to Chris: Chris did not make any offers, in that he did not offer to buy the barometer, he only made a general enquiry as to the price, and as such, this should be considered as a request for information and not an offer to purchase the barometer from Harry. Harvey v Facey (1893).
Harry’s reply of “I wouldn’t take less than £1200 for it”, could be considered an invitation to treat, (Defined later) in that it offered further negotiations. (BBP 2009) However; it could also be considered an offer, as Harry has implied that £1200 would be acceptable. An offer is a definite promise to be bound on specific terms and may be defined as follows:
“An express or implied statement of the terms on which the maker is prepared to be contractually bound if it is accepted unconditionally. The offer may be made to one person, to a class of persons or to the world at large, and only the person or one of the persons to whom it is made may accept it.” (BPP 2009, 51)
Applying this definition, Harry has made an offer, as the implied statement of the terms, are “Not less than £1200”. As Chris does not counter-offer or refuse this offer: nor does Harry revoke it, then, it is assumed this offer would be valid for a reasonable time. Ramsgate Victoria Hotel Co v Montefiore (1866)
There is again though, the case of a supply of information. Harvey v Facey (1893) Harry was in fact responding to a request for information: his reply did not state that he had any intentions of selling the barometer and thus did not intend to be legally bound by his response.
“A statement which sets out possible terms of a contract is not an offer unless this is clearly indicated.” (BPP 2009, 52)
It is therefore difficult to say with any accuracy whether an offer had been made; however, it is unlikely that Harry’s statement would be considered an offer but more likely, be attributed as response to a request for information.
Mondays placed advert by Harry in a magazine has also to be taken into account. In certain circumstance an advert in a magazine could be considered as an offer Carhill v Carbolic Smoke Ball Company(1893); however, in this instance and considering the wording of the advert, it is more likely to be viewed as an invitation to treat Partridge v Crittenden (1968). This is where a person holds himself (sic) out as ready to receive offers (D.Keenan & S.Riches 2004) An invitation to treat can be defined as follows:
“An indication that a person is prepared to receive offers with a view to entering into a binding contract,” (BBP 2009, 53)
On Tuesday when Angela saw Harry she made an offer. Harry then made a counter-offer which terminated Angela’s offer: which made Harry the offeror rather than the offeree, as he had originally been. Hyde v Wrench (1840)
“If an offer is rejected it ceases to exist. If offerees then change their minds and try to accept, they will in contractual terms be making the offer. The same result is achieved with a counter-offer.” (A.Adams 2006, 52)
The wording of the reply could be understood to indicate that Harry offered the barometer for sale, that he would accept £1200 and agreed to wait until Friday for written notice of acceptance and would not sell the barometer until Saturday. In this case Harry has made an offer which remains valid until Friday unless revoked. At anytime prior to “Being Informed of a revocation” Angela can accept this offer within the time limits imposed. Being informed can be through a third party; although possibly only through an agent. (BBP 2009)
The fact that Harry revoked the offer on Thursday, signifies further that Harry did intend the offer to be legally binding. Rose v Crompton Bros (1925)
Angela’s telephone call, if it had been successful, to accept the offer, could in normal circumstances be considered as an acceptance; had Harry not stipulated in the offer, that the acceptance must be in the form of written notice by Friday.
When Harry sold the barometer to Lewis for £1250 he had not yet entered into a contract with Angela but Harry should have revoked his offer to Angela as soon as possible to prevent future problems. As there was no consideration to support any separate agreement (promise) to keep the offer open until Friday (BBP 2009), Harry was therefore free to sell the barometer to Lewis, as his offer had not been accepted by Angela. Acceptance can be defined as:
“Acceptance must be an unqualified agreement to all the terms of the offer. Acceptance is generally not effective until communicated to the offeror, except where the 'postal rule' applies. In which case acceptance is complete and effective as soon as it is posted.” (BBP 2009, 57)
When considering Angela’s posting of the written acceptance, then the Postal Rules may apply, Adams v Linsell (1818); The postal rule states that:
“Where the use of the post is within the contemplation of both the parties, the acceptance is complete and effective as soon as a letter is posted, even though it may be delayed or even lost altogether in the post.” (BBP 2009, 60)
However, Harry had stipulated “let me have written notice by Friday if you want it” as one of the terms of acceptance. The postal rules do not apply if, considering the circumstances, the negotiating parties cannot have intended there should be a binding agreement until the acceptance was received (R.Upex & G.Bennett 2004). So it could be argued that the ‘Postal Rules’ would not apply in this situation The words 'notice in writing' must mean notice actually received by the vendor; hence notice had not been given to accept the offer. This being the case the postal rules were implicitly excluded by Harry. . Holwell Securities v Hughes (1974)
When considering Harry’s withdrawal of the offer to Angela: Harry’s actual posting of the letter would not be considered the time of revocation as the offeree needed to be informed. For revocation to be effective it must be communicated to the offeree (R.Upex & G.Bennett 2004)
On Saturday when Harry received Angela’s acceptance, the offer had already expired. This is an important factor and should be considered in detail. If Harry had received the acceptance letter prior to Friday then a binding contract would have been entered into.
Angela’s notification of the offer being withdrawn, arrived after the offer had already lapsed so can be ignored other than establishing the fact that Harry had considered the offer as binding.
The offeror may 'revoke' (or cancel) the offer at any time prior to acceptance: Payne v Cave (1789) unless by a separate option agreement, for which consideration must have been given, Routledge v Grant (1828). Harry had agreed to keep the offer open for a certain period of time; however, there was no consideration for extending the offer until Friday by Harry and as such Harry would not normally be bound by it. The ‘inflection’ from Harry’s offer could be interpreted ‘subjectively’ due to his promise to “not sell until Saturday” as to mean that; acceptance received on Friday would also be acceptable. Had this been the case, however unlikely, the timings regarding the letters would have been crucial. Fortuitously, Harry had communicated the revocation prior to acceptance being communicated to him, Byrne v Tienhoven (1880) and as such, no contract was established between Harry and Angela under those conditions either.
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Upex,R., and Bennet,G., (2004,) ‘Davies on Contract’, Sweet & Maxwell, London