In the present case, the issue is if the advertisement placed by Mojo Beverage is legally enforceable under the law of contract and if Ben can enforce the promise made by Mojo Beverage according to which they were going to be $100,000 to any person who caught Lord Harry, a fish that has been tagged by the company. In this case, the fish was caused by Ben but soon thereafter he came to know that there was an error in in the advertisement and in reality the prize was for $1000.
In order to decide this issue, first of all it needs to be decided if this advertisement can be considered as an offer or it is just an invitation to treat. There is a significant difference present between the two. While the acceptance of the offer results in the establishment of a valid contract, the acceptance of an offer to treat does not result in a valid contract between the parties. Generally, in case of the advertisements, there is a lot of puffery or vague hyperbole. In case of most of the claims made in the advertisements on it is difficult to pin down and therefore they are not considered as contractual offers. However in the leading case of Carlill v Carbolic Smoke Ball Company (1892), this position was reversed. In this case, the defendant placed an advertisement according to which the company will pay £100 to any person who used the carbolic snowballs of the company but still contracted influenza. In order to prove the seriousness of the offer, the company had deposited £1000 in the bank. Mrs. Carlill read the offer and used the smoke ball as per the instructions but still contracted influenza. However when she made a claim for the £100 as mentioned in the advertisement, the defendant refused and said that the advertisement was not an offer that would have been accepted by the plaintiff and it only amounted to an invitation to treat. However the court rejected the arguments of the defendant and claimed that a contract has been created between the parties. Regarding the argument of the defendant that it was a contract with the world and therefore it is not possible to enter into a contract with the world, the court stated that this was not a contract with the whole world but it was an offer that was made to the whole world and the contract was created only with the persons who had fulfilled the condition mentioned in the offer (Atiyah, 1990).
On the grounds of the legal position mentioned above, it is clear that in the present case also, the advertisement placed by Mojo Beverage amounts to an offer, although this offer has been made to the world at large. According to this offer, a contract will be created with the person who caught Lord Harry, a trout tagged by the company and released in the lake. This advertisement was also seen by Ben. However there are also rumors that the amount of the prize mentioned in the advertisement had been erroneously mentioned as $100,000 but in reality the amount of the prize was a $1000. These rumors were in fact true and the company intended to pay $1000. However before Ben could come to know that the actual amount of the prize was $1000, he caught the fish tagged by the company. In this case, all the requirements of a legally enforceable contract are present. The advertisement issued by Mojo Beverage can be considered as an offer and this offer was made to the world at large. However the offer could have been accepted by any person who performed the condition, mentioned in the advertisement, namely to catch the fish tagged by the company. As in this case, this condition has been performed by Ben, a legally enforceable contract has been formed between Mojo Beverage and Ben.
Therefore it can be said that Mojo Beverage owes $100,000 to Ben.
In this question, the issue is in the letter sent by Dorper Sheep Sellers Pty Ltd can be considered as an offer which could have been accepted by Livestock Brokers and if it was available to Livestock Brokers to accept this offer after six months.
Traditionally, the contractual agreements have been analyzed in terms of offer and acceptance. Therefore an offer is made by one party, to the other and the acceptance of the offer results in a binding contract (Beatson, Burrows and Cartwright, 2010). At the same time, the distinction that is present between an offer and invitation to treat also needs to be considered. The law provides that in order to be considered as an offer, it has to be established that the party making the offer had the intention of being bound by it (Harvey v Facey, 1893). In this case, a telegram was sent by Harvey to Facey in which it was asked, “Will you sell us Bumper Hall Pen? Telegram lowest cash price, answer paid.” In reply to this telegram, Facey wrote a telegram in which it was stated that the lowest price for the Bumper Hall Pen was £900. In their reply, Harvey mentioned that they were ready to buy Bumper Hall Pen at the price of £900 asked by Facey. They also asked for the title deeds so that they can get an early possession. But it was stated by the Privy Council that no contract has been created between the parties. The reason given by the court was that a direct answer had not been given by Facey regarding the first question when it was inquired if they would sell Bumper Hall Pen and therefore the lowest price that was mentioned by them in their reply was only responding to the request for information and as a result, it cannot be considered as an offer. In this way, it was stated that there was no evidence regarding an intention on the part of Facey that the reply sent by them was in fact an offer.
The law contract also provides that an offer can be withdrawn by the offeree at any time before it has been accepted (Dickinson v Dodds, 1876). Similarly when no particular deadline has been mentioned to accept the offer, it is considered that the offer is no longer available after the expiry of a reasonable time. In this regard, reasonable time to accept the offer depends on the subject matter of the contract (Atiyah, 2000).
In the present case, Livestock Brokers have not accepted the offer within a reasonable time. Instead of accepting the offer, they asked if the sale can be financed on the usual terms. However there was no reply to this letter by Dorper Sheep Sellers. Under these circumstances, under the circumstances, after nearly 6 months Livestock Brokers send the fax to Dorper Sheep Sellers Pty Ltd in which they stated that they have accepted the offer. But Dorper Sheep Sellers replied that they have sold their flock of sheep to another purchaser.
In this case, it can be said that it has not been established that the letter written by Dorper Sheep Sellers amounted to an offer. At the same time, Livestock Brokers have not accepted the offer. Instead they wrote a letter in which they asked if they sale can be completed on the usual terms. This was not the valid acceptance of the offer. On the other hand, after nearly 6 months they decide to accept the offer and send a fax to Dorper Sheep Sellers Pty Ltd. They were informed that the flock of sheep has already been sold to another buyer. Under the circumstances, it can be said that no contract has been created between Dorper Sheep Sellers Pty Ltd and Livestock Brokers due to reason that the elements that are necessary for creating a valid contract, namely offer and acceptance was not present in this case.
If it is assumed that the offer was accepted by Livestock Brokers on 14th June and they also sent the fax but as a result of a translation error, it was not received by Dorper Sheep Sellers Pty, it needs to be mentioned that the postal rule of acceptance is not applicable in case of instantaneous modes of communication. According to the postal rule of acceptance, the acceptance is considered to be completed as soon as the letter of acceptance is put in the mailbox. But in the present case, this rule is not applicable and therefore the general rule will apply which requires that in order to be effective, acceptance needs to be communicated to the party making the offer. Therefore in this case also, there is no contact between Dorper Sheep Sellers Pty and Livestock Brokers.
The issue in this case is if the part payment of the debt can be treated as good consideration in return of the promised to relinquish the balance.
In this regard the rule provided in Pinnel’s Case (1602) is applicable. According to this rule, the part payment of a debt cannot be treated as a good consideration for the promised to forgo the rest of the amount. Consequently if A owed $50 to B and B had accepted $25 as the full satisfaction on the due date, B is not prevented later on from claiming the balance amount. The reason is that there is no consideration provided by A to support the promise made by B to accept the part payment as the full amount. The reason is that in such a case, A is already bound to pay the full amount under the contract, as was stated by the court in Stilk v Myrick (1809). At the same time, this rule also shields the creditors from the economic duress on part of the debtors.
The brief facts of the Pinnel’s Case are that Cole owed £8.50 to Pinnel at this money was due on 11 November. At the demand of Pinnel, £5.11 was paid by Cole on 1st October that was accepted by Pinnel as the complete satisfaction of the dues. But afterwards, Pinnel sued Cole for the rest of the amount. Therefore in this case, the court came to the conclusion that the part payment in itself was not consideration. Although the court also stated that the agreement to accept the part payment will be considered as binding is the debtor has provided some fresh consideration, at creditor’s demand.
Therefore, according to the law contract, consideration may be supplied if the creditor had agreed to accept (i) part payment on an earlier date instead of the due date; (ii) chattel instead of money or part payment at a different place instead of the originally specified place (Collins, 2003). Although the role provided in Pinnel’s case is considered a somewhat harsh but still it represents the law that is applicable at present. Another case that is applicable to the facts of the present case is that of Foakes v Beer (1884). In this case, Mrs. Beers had obtained a judgment against Dr. Foakes regarding a debt and Dr. Foakes afterwards requested for some time to pay the debt. Mrs. Beer agreed that she will not take any further action if Dr. Foakes immediately paid £500 and the balance in installments of £150. The agreement was duly followed by Foakes. However the judgment debts also carry interest. In this regard, it was stated by the House of Lords that in this case Mrs. Beer can recover £360 as interest on the amount. The promise made by Mrs. Beer, not to take any further action, has not been bought by Foakes. Therefore the court stated that the consideration has been provided in this case.
In the present question also, the promise made by Westphalia Marts Pty Ltd to accept a reduced rental of $700 per week was not supported by any consideration provided by Stuart. As a result in this case, they can ask to work to pay the shortfall of $300 per week as well as the full payment of $1000 per week rent in future. The advice was to it is that the promise made by Westphalia Marts is not really enforceable due to the lack of consideration to support the promise made by them.
Atiyah, P.S. (1990) Essays on Contract, Oxford University Press, New York
Atiyah, P.S. (2000) An Introduction to the Law of Contract, Clarendon
Beatson, J. Burrows A. and Cartwright, J. (2010) Anson’s Law of Contract, 29th edn OUP
Collins, H. (2003) Contract Law in Context 4th edn CUP
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
Harvey v Facey [1893] UKPC 1
Foakes v Beer (1884) 9 App Cas 605
Stilk v Myrick [1809] EWHC KB J58
Pinnel’s Case (1602) 5 CoRep 117a
Dickinson v Dodds (1876) 2 Ch. D. 463
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