Background
The analysis of offer and acceptance can be regarded as a traditional approach used in contract law to establish the existence of an agreement between two parties (Austin-Baker, 2004). An agreement is established when one party (offeror) indicates to the other party (offeree) his/her willingness to enter into a contract on agreed terms without negotiating further (Caterini, 2005). Normally, a contract is established when the offeree and the offeror agree to the terms of their negotiation.
This paper seeks to use the United States Contract law to establish whether the agreements that were made in a case scenario were legally binding. In this case, Carrie offered to sell legal encyclopedias to Antonio. Antonio responded by saying that he would think about it and give a reply the following day. Norvel heard their conversation, approached Carrie and agreed to the offer. Antonio came the following day and told Carrie that he had agreed to the offer, knowing that the books had already been sold to Norvel.
This paper will specifically seek to establish whether Carrie was obligated to sell the encyclopedias to Norvel or not and whether she breached a valid contract with Antonio. The paper will include a discussion on who can accept an offer, and whether or not Carrie can revoke her offer by selling the books to Antonio.
Whether or not Carrie was obligated to sell the books to Antonio
In the above case, Carrie made an offer to sell a set of encyclopedias to Antonio. Antonio requested more time to consider the offer. They both did not reach any formal agreement at this stage. Furthermore, they did not write anything regarding their intention to transact the deal, this does not, however, rule out the legality of their contract.
The transaction was still at the negotiation stage. Negotiation can be defined as the “conduction of communications or conferences with a view of reaching settlement or agreement” (Caterini, 2005, p. 15). Normally, obligations between parties are legally established when a contract is entered. It’s difficult to determine obligations during the negotiation period (Caterini, 2005). The intent to enter into a contract must be clear for all negotiating parties.
The manifestation of mutual assent is vital in the establishment of a valid contract. The offerer must make an offer that will be accepted by the offeree. A legally binding acceptance should be “effective and unequivocal”, and it should not add other conditions to the offer (Rau, Windfhr, & Burnett, 2012, pp. 5).
An acceptance that adds limitations to the offer is regarded as a counteroffer. In the current case, Antonio did not reject Carrie’s proposal, he made a counteroffer in which he requested more time to consider her proposal. Carrie seemed to have agreed to the counteroffer and, therefore, she somehow owed a duty of care to Antonio. Duty care is often defined as a duty owed by one person to another that requires him/her to take reasonable care not to cause any physical, psychiatric or economic loss (Caterini, 2005).
The duty of care requires both parties to transact a business in good faith and fairness. Several factors are often considered when analyzing whether or not one party has failed his/her duty of care (Austin-Baker, 2004). First, the conduct of the party must qualify as wrongful and this has to be proven by the plaintiff. Secondly, the plaintiff must prove that the defendant owes him/her a duty of care and that his/her conduct fell below the standard of a reasonable person.
Thirdly, the damage caused must be foreseeable. If the damage is not foreseeable, then the defendant owes no duty of care to the plaintiff. In the current case, it can be said that it was wrong for Carrie to sell the books to Norvel when she had a pending negotiation with Antonio. However, one cannot say that her conduct fell below that of a reasonable person as it was not clear that Antonio would accept her offer. Furthermore, the damage was not foreseeable as Antonio might have rejected the offer in Carrie’s view.
This analysis shows that Carrie was not obliged to sell the books to Antonio because he made a counteroffer that complicated the situation. The fact that the damage was not foreseeable also implies that she did not owe him a duty of care.
Whether or not Carrie breached a valid contract with Antonio
According to the above analysis, Carrie did negotiate with Antonio in regards to the sale of encyclopedias. They, however, did not finish the negotiations due to the counteroffer made by Antonio. Carrie’s decision to sell the books to Norvel might have been in bad faith, in Antonio’s view but this was not foreseeable by Carrie.
Therefore, it can be concluded that Carrie did not breach a valid contract with Antonio when she decided to sell the books to Norvel. Norvel, who overheard the conversation, took advantage of the situation and entered into a valid contract with Carrie by accepting the offer. Therefore, Carrie cannot revoke the contract by selling the books to Antonio.
References
Austin-Baker, R. (2004). Gilmore and the Strange Case of the Failure of Contract to Die After All. journal of contract law , 118(4)1224.
Caterini, F. (2005). Pre-contractual obligations in France and the United States: A comparative Analysis. Georgia: University of Georgia.
Rau, A. S., Windfhr, R., & Burnett, A. (2012). Contract law in the United States: An overview. Web.