Offer and Acceptance Essay

Published: 2020-01-24 13:32:23
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For this case the major issue is whether a valid contract is made between Tina and Yatie, and whether the the offer by Yatie was revoked or not. According to (Miller & Jentz, 2010) every contract will involve atleast two parties. That is the offeror and the offeree. The offerer is the party who makes the offer, and the offeree is the person to whom the offer is made to.

OFFER

As per (Clarkson, Miller, Jentz, & Cross, 2009) an offer is a promise or commitment to do or not to do a certain thing. And there are three elements for an effective offer to be legally bounding from the common law. They are: the intention must be serious, its terms should be definite, and must be communicated to the oferee. In this case Yatie sends the offer letter proposing to supply hancrafts to Tina. The offer clearly satisfies these elements. Firstly it is evident that Yaties serious intention as she requested a written acceptance from Tina, as an objective aproach. If we look in to the case of Lucy v. Zehmer, 196 Va. 493; 84 S.E.2d 516 [1954], the parties signed a document which was for the sale of land and it was binding.

Similarly in this case the intention to create legal relations is evident from the Yaties request to Tina to send a written acceptance. Secondly it has clear terms (to supply handcrafts) of what they are going to do. The offer from Yatie was clear in this case, and unlike in the case of Ahmad Meah & Anor v. Nacodah Merican [1890] 4 Ky 583 where offer was too vague. And for the last element, the communication of the offer was complete when it was received by Tina (the intended party) on 4th September 2011 and when it becomed knowledge to Tina, in line with the section 4(1) of the Contracts Act 1950: Act 136 (CA) So the offer by Yatie was complete.

ACCEPTANCE

Looking into the acceptance, Tinas acceptance was communicated by her staff Anis. Acceptance is the voluntary agreement to the terms of the offer by the offeree (Clarkson, Miller, Jentz, & Cross, 2009). As Tina requested her staff Anis (an agent for Tina while Tina is the principal) to noitify her acceptance of the offer to Yatie. According to (Schneeman, 2010) because of the fiduciary relationship between the agent and the principal, the agent can act on behalf of the principal. If Anis accepted the offer as in the case of Powell v Lee [1908] 99 LT 284, then the acceptance will be held as not communicated. But in this case Anis was given actual authority from Tina by granting expressly verbally to accept the proposal of Yatie by asking to fax the acceptance. When Anis telephoned on 7th September 2011 to Yaties office to confirm the acceptance, that is also acceptance enough, as in the case of Tinn v Hoffman [1873] 29 LT 271 the ruling was although a writen acceptance is requested, other methods such as telegram and verbal messeges can be used as means of acceptance.

Even in the case of Adams v Lindsell [1818] EWHC KB J59 it was held that that the acceptance was communicated although the acceptance letter got misdirected and delayed. Therefore Tinas acceptance will be effective on 6th September 2011. When Anis posted the letter on 6th September 2011, the acceptance was completed; as from that moment onwards the control of delivering the message is out of control by Anis on behalf of Tina. Section 4(2)(a) of CA affirms so for the acceptor. And according to (Miller & Jentz, 2010) for such situations the mail box rule, which is also reffered to as the postal rule or the deposited acceptance rule will apply. And this rule was formed to avoid the confusion of situations similar to this case of Tina and Yatie.

CONSIDERATION

Consideration is the reason for the promise. And if there is no consideration in an agreement, the contract would be void as per Section 26 of CA. In this case Tina commited to receive Yaties offer of handicrafts supply, and the commitment is consideration enough as per Section 2(d) of CA. Yatie will expect Tina to complete her transaction. And with Tinas acceptance, her commitment will probably have affected her other business activities, and she also probably have rejected other business opportunities and offers due to her commitment to Yatie. So the consideration has passed between Yatie and Tina.

REVOCATION

When the revocation of the offer is sent the acceptance is already posted. And the outcome is that the revocation by the offoror will only be effective when the revocation becomes knowledge to the offeree. But when the oferee dispatches the acceptance, it will instantly be effective. The case of Byrne v Van Tienhoven [1880] 5 CPD 344 illustrates the acceptance & revocation of the offer by postal rule. In that case the facts are that the revocation of the offer will only be communicated when the offeree receive it. And not on the date the offeror posts the revocation. Section 4(2)(b) of CA gives the condition that the offerors revocation will only be completed when the intended party is aware about it.

And for the revocation SMS on 8th September 2011 by Yatie would not apply, as it was sent after the acceptance by Tina which was on the 6th September 2011. For example even if the Yaties SMS was sent before the acceptance, the revocation will still not be effective because as per the section 4(2)(b) of CA. But if we look into the case of Holwell Securities v Hughes [1974] 1 WLR 155, the postal rule was overruled, since the defendant had specified to give the acceptance notice in writing before a certain deadline and was held that the offeror should actually receive it. Based on this ground, Yatie can claim that she had specified the acceptance to be given in writing and she did not actually receive the acceptance.

But if we look into the section 5 (3) of the CA, a proposal may be revoked at any time before the communication of its acceptance, and is complete as against the proposer, but not afterwards. And thus the above said case (Holwell v Hughes) is overruled by the contracts Act. And in this case offer, acceptance and consideration were complete. And revocation by Yatie was not complete since Tina did not receive it before her acceptance. So, looking in to the facts, its highly probable for a valid promise to exist between Yatie and Tina.

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