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Researching the Law of Contract Essay

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Updated: May 9th, 2022

Introduction

Law is a critical element in the establishment of a stable society.1 There are numerous laws in existence to establish normalcy within a society. These laws fall into two main classes, which include civil and criminal laws. Through the various laws formulated, individuals can co-exist while businesses can thrive. The success of the business environment hinges on the numerous contracts that exist amongst different business entities. The law of contract plays a central role in ensuring that the involved parties execute contracts effectively. A number of elements have to be functional for the law of contract to become enforceable. Some of these elements include an agreement, consideration, intention, mutuality, and legal purpose.2 In the course of their operation, businesses have adopted the Internet as one of the mediums of market communication. In a bid to be effective, the adverts posted on the Internet should be comprehensive.The objective is to identify whether the element of agreement exists in the case study and whether the online advertising undertaken by Fred complies with the law.

Issue – Agreement to sell

There are various categories of contracts. Contracts fall in different categories based on their enforceability, formation, and performance. Additionally, valid contracts can fall into three main classes, which include enforceable, voidable, and unenforceable contracts. Voidable contracts entail contracts whereby one of the parties has the option of avoiding the requirements of the contract. Some good examples of such contracts entail those that are formed by minors. Unenforceable contracts include contracts that are not legally enforceable due to the existence of certain legal issues. On the other hand, void contracts entail agreements that did not amount to the establishment of any contract.

Rule

An example of contract based on enforceability relates to contract of sale, which refers to an undertaking between two parties whereby one party (seller) is required to supply certain goods or services to another(buyer) at an agreed amount of money either on cash or credit terms. A contract of sale exists if one of the parties (seller) agrees to transfer the product in question to the purchaser at a certain price.

Contract of sale constitutes two generic terms, which include “agreement to sell” and a “sale”. For a contract to be established, a number of elements should be incorporated. One of these elements relates to agreement.2 For an agreement to exist, a number of issues are critical. Firstly, there must be the offeror and the offeree. The offeror entails “the party making the offer while the offeree refers to the party to whom the offer has been made and a serious and objective intention on the part of the offeror must be evident”.3

Despite the element of intention and consideration being evident in the case of Francis and Alex, one can assert that a bidding agreement between the two individuals did not exist. This assertion hinges on the fact that the element of offer and an acceptance, which constitutes an agreement were compromised. In a bid to ensure the existence of “a legally binding contract, the involved parties must have accepted the terms of the contract”.4 Francis, the shop owner, made an offer to sell the antique comb set to Alex at $200, which is less than the marked price. On the other hand, Alex agreed to purchase the antique comb set at the offered price. However, this offer was only valid within a particular duration. Alex was required to make the payment the following day at 10 AM. Despite agreeing to the offer, he later changed his mind regarding the payment time. Consequently, he communicated to Francis regarding his change of mind through an answering machine. However, Francis did not receive the message in time; hence, he did not have an opportunity to reply. As a result, Francis did not respond regarding whether he would extend the offer to the following afternoon. Alex assumed that Francis had received the message and agreed to his terms.5

Analysis

For a particular agreement to be legally binding, acceptance must be communicated effectively to the offeror.6 In this case, Francis and Alex were in a bilateral contract, which makes effective communication one of the critical elements. Bilateral contract underscores the promise made by the offeror and the offeree.7 Additionally, the acceptance must be timely. Consequently, it is paramount for the involved parties to communicate by use of an authorised mode of communication.

In spite the fact that Alex made an effort to communicate with Francis before the set time within which the contract was valid, Francis did not receive the message in time. Consequently, there was no legally binding agreement. Communication in an agreement is very critical.8 The mode of communication used must be subject to authorisation by the offeror. In some situations, communication challenge might occur. In this case, Francis had not told Alex on the mode of communication to use. Alex decided to communicate using an instantaneous method. Consequently, the mailbox rule, which stipulates that an acceptance is evident immediately after the mail is deposited in the post office, does not apply. This aspect arises from the fact that Alex decided to use instantaneous mode of communication due to the situation surrounding the sale contract. The failure of the offeror to reply cannot qualify as an acceptance by the offeree, for the offer did not include a clause stipulating that silence translates to acceptance.

Conclusion

From the above analysis, the element of agreement cannot be established with certainty for there is no meeting of mind or mutual assent. Consequently, Alex does not have a legally enforceable contract with Francis for he changed the original terms of the contract. Any material change on the terms of the offer results into automatic termination of the offer. The material changes made to the initial offer results into counter offer. Counter offers do not require acceptance. Additionally, Francis is not under any obligation to sell the antique comb and mirror set to Alex because the elements of offer and acceptance, which constitute the formation of an agreement, did not result in the creation of a mutual agreement.

References

Bagley, Constance, and Savage Diane. Managers and the legal environment: Strategies for the 21st century. Mason, OH: Cengage, 2010.

Gillies, Peter. Business law. Sydney: Federation Press, 2004.

Gillies, Peter. Concise contract law. Sydney: Federation Press, 2008.

Goldman, Arnold, and Sigismond William. Business law: Principles and practices. Mason, OH: Cengage, 2011.

Meiners, Roger, and Edwards Frances. The legal environment of business. Mason, OH: Cengage Learning, 2008.

Miller, Roger, and Frank Cross. Legal environment today: Business in its ethical, regulatory, e-commerce and global setting. Mason, OH: Cengage Learning, 2010.

Miller, Roger, and Jentz Gaylord. Business law today: The essentials; text and summarised cases: e-commerce, legal, ethical, and international environment. Mason, OH: Cengage Learning, 2011.

Miller, Roger. Modern principles of business law: Contracts, the UCC and business organizations. Mason, OH: Cengage Learning, 2012.

Piotrowski, Christine. Professional practice for interior design. Hoboken: John Wiley, 2002.

Rao, Peddina. Mercantile law. London: PHI Learning, 2008.

Footnotes

  1. Roger Meiners and Edwards Frances, The legal environment of business (Mason, OH: Cengage Learning, 2008), 54.
  2. Ibid, 243.
  3. Arnold Goldman and William, Business law: Principles and practice (Mason, OH: Cengage, 2011), 97.
  4. Ibid, 107.
  5. Meiners and Edwards, 252.
  6. Goldman and William, 178.
  7. Roger Miller and Frank Cross, Legal environment today: Business in its ethical, regulatory, e-commerce and global setting (Mason, OH: Cengage Learning, 2010) 86.
  8. Roger Miller, Modern principles of business law: Contracts, the UCC and business organisations (Mason, OH: Cengage Learning, 2012) 104.
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