Introduction
Contract is a term which means parties are come closer for making an agreement with mutual obligations that is enforceable by law. However, some of the basic factors which is requisite for making a legal agreement such as; mutual assent, expressed by valid offer and acceptance, effective consideration, capability and legality (Kashdan and Ciarrochi, 2013). Therefore, this assignment is going to throw lights on various situations faced by seller and buyer while offering a contract or while acceptance. Thus, two distinct cases are covered in the project for understanding necessary elements which incurred while making contract. Moreover, concept of counter offer and battle of forms is further outlined in the project.
MAIN BODY
a) Contract between Professor Plum and Mustard
According to the given case study, Professor Plum have seen an online advertisement on Gumtree which offered a sale of £100 that is a vintage a copy of Cluedo board game. This add covers name of sellers and its address. Thus, Plum visits to that address for asking about the advertisement and inform that he want to accept the sale of £100 of board game. But now Mustard answers that now he doesn’t want to sell the board game to plum because ten minutes before he had received call from Mr Peacock who is offering £150 for the same game. Now Plum is insisting to Mustard that please give the game to him as he wants it.
By analysing this situation, it has been determined that first or foremost element of contract is available in this contract as; Mustard offered the game by giving advertisement and mentioned address also for contacting with him for further procedure. Furthermore, acceptance is also done in this situation as Plum accepted the contract but before he comes for finalizing the agreement, Mrs Peacock already called Mustard for buying the game with increase price. It means, according to the rule of legal norms, Mustard have right to dismiss the acceptance of Plum because he gets ten minutes late (Wallquist and et. al., 2012).
However, legitimate norms states that the person who is offering a contract have a right to select final user of their product according to his/her choice and no one have right to ask question with them regarding this. On the other hand, person who accepted the contract don’t have right to enforce offerer for giving him possession of product. In the case of Mustard, Mrs Peacock is offering maximum amount as compared to the advertisement he has given. Then, it’s very obvious that offeror can go for maximum amount of contract. On the other hand, a number of cases has identified which shows that its totally depend upon the person who have offered the product to whom he/she is going to sell the product. But at the same time, the law says that if a person comes first for accepting the contract as per set terms and conditions then offeror is liable to sell the product to him/her.
However, some of the necessary elements which must be considered while acceptance are as follows-
Acceptance must be absolute and unqualified- This means that, Section 7 of contract act states that acceptance of product needs to be absolute. If there is any variation in terms of acceptance then it will not be accepted but consider as counter offer that might accepted by proposer or not. Basically, counter offer just destroyed the original terms and conditions.
For example; Mr A offering to sell his cycle for a sum of £90 but B sends the acceptance call for purchasing it on sum of £70 than in this situation there is no acceptance will be taken because counter offer is given by B (Burrell and Morgan, 2017).
Acceptance needs to be in mode of prescribed- If an individual wanted to accept the proposal then he/she is liable for accepting the terms and conditions. As if the acceptance is not given as per description mode then the proposer has a right to reject that contract.
For example; Offer is made for acquiring the shares which indicates that acceptance will be come from telegram then if it will come through ordinary post then it might be get rejected by proposer.
It means, Plum visited on the address by Mustard for accepting the contract but unfortunately contract get rejected because Mrs Peacock have already called MUSTARD through telephone mode.
b) Agreement for selling a BMW
In the given scenario, Green wrote a letter to white on 21st August that his former wife wanted to sell his 2013 BMW 3 series motor car whose registration XXX63 123, for almost £9,000 and acceptance notice is required till 28th august. On the other hand, White send acceptance letter to Green the next day on 22nd August however the letter doesn’t arrive till 30th august but the car has already sell to black his civil partner for £10000. After a day, white contact Green and informs that now car is hers. This means that, Green gets late and selected wrong mode of contacting due to which he gets late for accepting the contract. In fact, white even don’t know about the acceptance of Green till 29th August because he didn’t receive any acceptance letter from Green. Therefore, it has been understood that there are number of terms and conditions that must be considered by party while accepting the contract such as;
Acceptance must be communicated to offeror- As per this term, acceptance of contract must be interacted with the party for binding a contract. Mental acceptance is not considered under law. But if the offer is accepted by acting upon then this will be considered as acceptance of contract. Thus, in given case study, Green have just sent a letter without contracting to white for knowing about the contract and doesn’t selected any other mode for contacting with White then this type of agreement will automatically get rejected (Haug and Stigson, 2016).
For instance; manager of railway organization received a draft of agreement and manager just written approved on that and kept the draft on his table. Due to some oversight this approval remains in drawer and never communicated. Thus, it has been understood that none of the agreement as acceptance has been passed because approved letter is just kept in a drawer.
Silence never prescribed as mode of acceptance- Silence of a person is not considered as acceptance reaction from the party. It means that whether offeror hadn’t mentioned the mode of acceptance but still it is essential to use some technique for accepting the contract (Wolsink, 2012).
For example; one of the most leading case which shows the example of silence agreement Felthouse V. Bindley (1863) in which F offered an agreement through letter to buy his nephew’s horse from almost £ 30 and added that if I will not hear anything about it than I shall consider this as mine horse for around £30. But nephew didn’t get any reward but he already told to auctioneer who have taken the responsibility of selling his horses that don’t sell it because that specific horse is already sold to his uncle. But, unfortunately auctioneer sole the horse. After that, as per the legitimate norms F has a right to claim against auctioneer because his nephew has already said that the horse was sold to his uncle don’t sell it. But, still F doesn’t claim against auctioneer because F horse didn’t belong to F. This shows that silence cannot be described as mode of acceptance (Felthouse V. Bindley (1863).
Hence, it has been assessed that various essential elements of acceptance needs to be considered by both the parties or persons who is going to accept the contract in order to minimize the probabilities of risk.
c) Meaning of Counter Offer and battle of forms
According to legal bodies, counter offer is a term which means that acceptance party comes with a new terms and conditions by seeing the agreement of proposer. This means that counter offer is an offer which is made by another party while responding to the previous one and negotiating for final agreement as per their new terms and conditions. Thus, this new offer rejected the original offer that cannot be accepted until and unless revived by offeror. However, coming up with counter offer instantly rejected the previous offer and requisite an acceptance as per the terms and conditions of counter offer (Venkatesh, Thong and Xu, 2012).
For example; Mr A have given an advertisement of selling his car in £800 but B comes with acceptance of contract but with counter offer that please give that car in £700 which shows that B comes with new terms and conditions. Thus, in this situation there is a chance of rejection of contract.
On the other hand, Battle of forms is a term which shows the uncommon situation where one business organization offer a contract in different form such as; might be in pre-printed form but the respond of its acceptance by offeree comes in its own form. As per the common law, discrepancy between distinct forms will protect the offeree response from operating as an acceptance.
Conclusion
From the above report, it has been summarised that a contract gone through various terms and conditions as well as requisite to consider necessary elements which is set by legal bodies for controlling probabilities of mistake. Throughout the analysis, it has been understood that party who is going for accepting the contract needs to consider necessary terms and conditions of acceptance in order to reduce the probabilities of wrongful acts.