Generally, an advertisement whether electronic or otherwise is considered just as an invitation to treat and not as an offer per se. This is because every supplier has limited supply because of economic, financial, or in some instances natural constraints. In legal terms, an invitation to negotiate is just an intention of one party to make an offer and is not an offer by itself. Consequently, the advert made by Hanes Audio cannot be taken to be an offer per se. As outlined by the Electronic Transactions Act chapter 88 Sec 14, any electronic communication that is not made to an individual or specific group of people should be considered as an invitation to make an offer unless stated otherwise (Tabalujan & Toit-Low, 2009). This includes proposals that make use of interactive applications for the placement of orders. As it was held in Patridge v Crittenden (1968), advertisement is an invitation to treat or negotiate and not an offer.
However, when an order is made following an online advertisement and the supplier accepts the order and goes ahead to deliver goods, then a binding contract comes into existence. The Electronic Transactions Act chapter 88 Sec 11(2) clearly explains that when electronic communication is used in the formation of a contract then the contract cannot be denied validity just because electronic communication was used (Tabalujan & Toit-Low, 2009). In this regard, there was a contract between Clara and Hanes Audio the moment Hanes Audio accepted to deliver the phone as advertised. It is important to also note that Clara paid for the phone without giving conditions.
In the case of Carlill v Carbolic Smoke Ball Company (1893), the court of appeal held that the advert made had all the requirements of an offer and was, therefore, an offer in itself. On the same note, in the case of Perry v, Suffield’s Ltd the court held that there was an abiding contract though other crucial points were not expressly discussed. In the Digilandmall case (2004), the court held that the automated acceptance of the orders created a binding contract (O’sullivan & Hillard, 2012). In this case, Hanes Audio communicated its acceptance of the contract by delivering the phone as was ordered by Clara. In the advert that was placed by Hanes, there was nothing left for negotiation. Therefore, following the ruling on the case of Lefkowitz v Great Minneapolis Surplus Store (1957), Hanes’s advertisement can be taken to be an offer (Phang & Yihan, 2012).
For the second part, Clara had the opportunity and time to read all the conditions that were given as regards the advertisement. Unfortunately, she was reluctant and ignorant to read them. Consequently, she cannot use the excuse that she did not read the terms of the contract to exonerate herself from negligence (Chitty, 2012). Given that Hanes Audio had expressly communicated the terms and conditions of the contract, they can be exempted from blame. Consequently, Hanes had stuck to their end of the bargain by replacing the phone that was requested with another one and provided change on the same (Chitty, 2012). Clara will, therefore, be under obligation to accept the UL210 and the voucher. Hanes Audio is not under any obligation to accept back the UL210 phone and was doing Clara a favor by giving her a two weeks grace period.
References
O’Sullivan, J. & Hilliard, J. (2012). The Law of Contract. London: Oxford University Press.
Chitty, J. (2012). Chitty on Contracts. London: Sweet & Maxwell.
Phang, A. B. & Yihan, G. (2012). Contract Law in Singapore. Alphen aan den Rijn: Kluwer Law International.
Tabalujan, B. S. & Toit-Low, V. D. (2009). Singapore Business Law. Singapore: Business Law Asia.