The approach of offer and acceptance in business law is focused on the determination of agreement existence between two parties; it is a kind of contract between the ‘offeror’ and ‘offeree’ built on the principles of particular terms without the necessity to further negotiations. It is necessary to underline the fact that the central formula of this approach determines the moment of parties’ agreement.
The case study under analysis discloses the conflict between eccentric millionaire Lamar Smunt, being enraged at his mother’s insult, and the portrait artist Casmir Roginsky, who was offered to do a portrait paid $500 000, but refused by mistake; the thing is that the offer was made by the client, and refused in the rude form, three hours later the artist accepted it providing certain excuses for his remarks, though Smunt perceived it as mother’s insult and expressed no desire to have any future business cooperation. The paper will concentrated on the analysis of Roginsky’s contract against Smunt on the basis of offer and acceptance approach.
The contract validity is identified through the made offer by one party and its acceptance by the other. The terms of the contract are dictated by the offeror; the acceptance of the offer means the acceptance of its terms. It should be stressed that sometimes the offer indicated the limitations in time of its acceptance; in case this point is not provided, the courts identify the period of its expire. Acceptance of the offer can be made both orally, and in the written form; besides, it is important to provide invitation to offer by the ‘offeror’.
In order to analyze the artist’s chances to success, it is necessary to identify the cases determining the validity of the contract. They are the following:
- Legal relationships: terms and obligations provided in the contract;
- Clear and definite: the conditions are clearly expressed and the invitation is provided; the acceptance of the offer determines its validity;
- The communication between the offeror and the offeree should take place;
- The absence of negative conditions;
- Offer revocation.
It is necessary to underline the fact that in case the offer is accepted, all its terms are taken into account automatically and legal terms are established. The offeree has no right to accept the contract and in a certain period of time refuse some of its terms. The offer can be revoked by the party on the basis of any revocation method taking into account the purpose of revocation. (Peralta, 2008)
Offer and acceptance approach is built in accordance with the principle of mail box rule; this provision is considered to be the acknowledgement of the document or contract delivery on the specified date if it is required. The case study under analysis should be viewed in accordance with the terms and conditions provided within the offer contract; in case the validity of the contract is not limited by certain time period, its acceptance after 3 hours can be considered as valid. The communication between the partners was held over the telephone and the acceptance by Roginsky was presented in the oral form, as it is allowed in accordance with the rules of offer and acceptance approach. (Cheeseman, 2006)
It is necessary to underline the fact that acceptance of the offer is considered to be a serious agreement, providing certain obligations to the other party according to the contract terms. The success of the offeree is dependant on the time limitations inserted by the offeror; nevertheless, any of the parties has the right to refuse further cooperation on the basis of serious grounds providing. In case the contract is discharged by breach, the law is to provide ‘remedy’ for the party injured.
Case Study 2
According the business law, a Statute of Frauds is considered to be the determination of the contracts’ form, stating the necessity for them to be presented in the writing form or signed by the parties. In order to satisfy the statute requirements, it is necessary to determine the contradicting parties through the writing, reciting the contract matter and providing clear terms and conditions of the agreement. There are some circumstances requiring contract writing in accordance with the statute:
- The period of contract performance is more than one year;
- Marriage consideration contracts;
- The concept of surety is presented;
- Goods sale above particular value, etc. (Cheeseman, 2006)
The case study under consideration is concentrated on the validity of oral employment contract; the parties, employer Tony, and employee Wombat, who was promised a position of a district manager for a period of three years. Oral agreement between the parties resulted in Wombat’s removal to another state taking his family and selling the house; unexpectedly, Tony’s Company could not provide the promised position to Wombat and he suffered financial losses and moral breakage connected with the removal. (Larson, 2003)
According to the Statute of Frauds, terms and conditions of employment contract are to be presented in the written form; the oral promise of employer not to fire the worker, but for the retirement age, or hire someone, cannot be considered as enforceable, as it is not written, nevertheless, it can be considered equitable. Wombat suffered losses through the oral employment agreement; nevertheless, according to business law, Tony is not obliged to compensate for this, as there is no any written documentation disclosing the conditions of future employment with the identification of the promised time period. (Statute of Frauds. 2006)
Taking into account business law regulations and theoretical approaches reflecting legal terms of contract and agreement acceptance, it is necessary to stress that any provisions and conditions, as well as employment promises are to be supported in the writing form. Oral agreement between two parties as to future cooperation and productive work for the period of three years is the issue of business ethics. From the ethical point of view, Tony’s company is to compensate for removal losses suffered by Wombat. It is necessary to underline the idea that compensation can be presented both, in the form of financial support, or a kind of job, even if taking lower position.
It is necessary to stress that there is always a danger of oral employment agreement consequences; any court would reject oral modification, as in accordance with the law, terms and conditions are to be formally supportive. The process of employment is considered to be a sophisticated contract covering a number of points to be agreed on by the employee and employer, such as medical insurance, salary, etc. All these regulations cannot be presented only in the oral form in the form of promise, because there can be some unexpected circumstanced providing obstacles for contract fulfillment. (Larson, 2003) Nevertheless, considering the norms of morality and business ethics, people are always responsible for their promises; especially they impact the life of other people.
References
Cheeseman, H. Business law: legal environment, online commerce, business ethics, and international issues. 6th Edition. Pearson Prentice Hall, 2006.
Larson, A. The Statute of Frauds and the Contract Law. Law Offices of Aaron Larson. 2003.
Peralta, V. Contract and Agency Law. Business Law in Practice. Campbell’s College. 2008.
Statute of Frauds. Law Law Stud. 2006. Web.