Issue
The main issue is to determine if the contract between Mojo Beverages and Ben is indeed enforceable. Further, opinion also needs to be rendered with regards to the claim amount.
Law
For enacting a legally enforceable contract, it is imperative that the contract essential must be satisfied. These are as stated below (Carter, 2012).
The fulfilment of the above conditions leads to the formation of a valid contract between the two parties.
Offer is extended by a party known as offeror and directed to a particular offeree or multiple offerees. It is defined as any proposal for indulging into a particular activity for a particular consideration in the hope that the proposal would receive approval of the other party called as offeree. This is in line with the argument offered in the Gibson v Manchester City Council – CA (1978) case (Latimer, 2005). Further, in accordance with the arguments put forward in the Carlill v Carbolic Smoke Ball Co (1893) case, it is apparent that the offer would have to be communicated to the offeree for ensuring that it is valid. It is imperative that the offer terms should be definite and should lack ambiguity. This is crucial for uploading the offer validity in the court of law (Gibson & Fraser, 2014).
With regard to valid agreement, it is imperative that the offeree must offer confirmation to the extended offer.as apparent in the verdict of the Brogden v Metropolitan Railway Co. (1877) case. It is required that the offer terms must be agreeable to the offeree as conditional acceptance amounts to a counter offer being made to the original offeror (Pathinayake, 2014). Further, acceptance on a mental level on the part of the offeree does not amount to acceptance in legal terms as evident from the decision of the Powell v Lee (1908) case. It is vital that the same must be extended to offeror using appropriate communication means (Lindgren, 2011).
In event of alterations being introduced in the offer by offeror unilaterally, then the same must be granted acceptance by the offeree so as to result in a valid agreement. Unilateral alternations to the offer without the offeror giving consent and being aware of the same are not valid and do not supersede the original terms. With regards to unilateral offers, there is variation in the manner of acceptance, The acceptance is not requisite in such offers and the offeree indulging into the desired action is testimony to acceptance being given as is evident from the arguments made in Great Northern Railway Company v Witham (1873) case (Davenport & Parker, 2014)..
As per the given case facts, a unilateral offer was communicated by Mojo Beverages through publishing an advertisement whereby it offered a sum of $ 100,000 as prize money to any person who would find success in catching Lord Harry from the water. However, later it was realised that the prize money actually offered was only $ 1,000 instead of $ 100,000. The offer in the given case is unilateral which is open to the people and essentially acceptance would be communicated if any individual indulges in the activity of finding Lord Harry.
Ben was aware of the modified offer before he could catch Lord Harry. Even though it was through an unreliable third party but Ben should have ideally clarified the matter before indulging in the act of catching Lord Harry. It is quite possible that Mojo Beverages had made an announcement about the modified amount of reward but Ben was not aware of it. But after having heard the rumour, continuation with the act of catching Lord Harry is assumed to be acceptance of the modified offer as ideally if Ben was not interested in getting $ 1,000, he should not stopped his activity. The silence of the Mojo Beverage representative does not change the conclusion as Mojo had already made a public announcement regarding this before Lord Harry was caught.
Conclusion
Based on the above discussion, it may be concluded that there is an enforceable contract between Ben and Mojo Beverages and as per it, the company should make a payment of $ 1,000 to Ben.
Issue
The central issue in the given case is to determine whether Livestock Brokers have a binding contract with Dorper Sheep Sellers Pty Ltd and hence can enforce the contract based on the case facts presented.
Law
For enacting a legally enforceable contract, it is imperative that the contract essential must be satisfied. These are as stated below (Latimer, 2005).
The fulfilment of the above conditions leads to the formation of a valid contract between the two parties.
Offer is extended by a party known as offeror and directed to a particular offeree. It is defined as any proposal for indulging into a particular activity for a particular consideration in the hope that the proposal would receive approval of the other party called as offeree (Carter, 2012). Further, in accordance with the arguments put forward in the Carlill v Carbolic Smoke Ball Co (1893) case, it is apparent that the offer would have to be communicated to the offeree for ensuring that it is valid. It is imperative that the offer terms should be definite and should lack ambiguity. This is crucial for uploading the offer validity in the court of law (Fraser & Gibson, 2014)
In response of the offer being extended to the offeree, it is imperative that unconditional acceptance must be extended for the formation of a valid agreement. In case of conditional acceptance being granted, this would not result in the enactment of a valid contract. Instead as explained as in Hyde v Wrench (1840) case, a conditional acceptance would be considered as a counter offer (Pendleton & Vickery, 2005) . This counter offer is directed to the original offeror and would result in the formation of a valid contract if accepted. However, as evident from the arguments made in Stevenson v. McLean (1880) case, the act of making enquiries with the intention of gaining more information does not amount to counter offer and hence does not lead to cancellation of the offer (Pathinayake, 2014).
The acceptance of the offer must be communicated by the offeree to the offeror. In the event that the offeree does not communicate the acceptance to the offeror, then it is not held valid and does not result in formation of a valid contract. One of the means of communication that may be used for communicating acceptance is through post. As per the postal rules of contract formation, the acceptance is assumed to have been communicated by the offeree at the moment when the acceptance letter is sent to the offeror (Davenport & Parker, 2014). Any delay in receipt of the acceptance letter does not alter the contract formation and hence a legal contract is in place irrespective of the date on which the acceptance letter reaches the offeror or he/she reads the letter content. However, in case of usage of communication modes like fax which result in instantaneous communication, the above rules are not valid and thus acceptance becomes valid only when the offeror receives the fax which is evident from the arguments made in the Entores Ltd v Miles Far East Corporation (1955) case (Lindgren, 2011).
As per the given information, Dorper Sheep Sellers Pty Ltd (offeror) made an offer to sell dorper sheep flock to Livestock Brokers (offeree). The offeror sent a letter to the offeree on June 1 detailing the offer with regards to the quantity of sheep flock on offer along with the applicable price. Further, a period of 14 days was given to the offeree to communicate acceptance to the offeror.
In response to the offer by the offeror, the offeree sent a letter dated June 6 which wanted some additional information. It is apparent from the verdict of the Stevenson v. McLean (1880) case that mere asking queries or seeking incremental information does not amount to counter offer. As a result, the letter sent by offeree does not impact the offer which was still valid. Further, on June 14, the offeree through fax as the medium of communication expresses their acceptance to the offer and this was timely received by the offeror before the expiry of the offer, Thus, it may be concluded that in the given case, there is an enforceable contract between Livestock Brokers and Dorper Sheep Sellers and therefore refusal by Dorper Sheep Sellers to not entertain Livestock Brokers would amount to breach of contract and would have legal implications.
In the event, the fax letter is not received by the offeror, then it is deemed that acceptance has not taken place during the time provided as communication of acceptance to offeror is pivotal. Hence, in this case, there is no enforceable contract between the two parties and there is no legal obligation on the part of either party.
Based on the discussion above, it is evident that in case the fax letter was received by Dorper Sheep Sellers on time, then there would be contractual relation between the two parties and Dorper Sheep Sellers would have to fulfil their legal obligation by providing Livestock Brokers with the requisite quantity of sheep at the communicated price. In case of non-receipt of fax letter before offer expiry, then there would not be any contract between the two parties.
Issue
Based on the relevant facts, the core issue is to determine if Westphalia Marts can recover the shortfall of lease payment along with the full amount.
Law
In case, there is a legally enforceable contract between the parties, these are expected to fulfil their contractual obligations. Some of the terms inserted into the contract are referred to as implied terms and the source of these terms is the presence of conventions and precedent. On the other hand, express terms are those which are explicitly concluded by the contracting parties. Violation of the terms of the contract may result in contract being breached (Latimer, 2005).
It is the duty of the parties enacting the contract that the contractual terms agreed must be respected and not violated in bad faith. However, it is possible to amend the contract through change in terms or addition to the existing terms (Carter, 2012). This amendment to the contract may be achieved in the written or the oral form but the mutual acceptance of both parties is imperative. If the amended contract is written in nature, then it should bear the contracting parties signature. However, the oral contracts are also equally binding and amount to legal contracts (Lindgren, 2011).
Application
Stuart and Westphalia Marts Pty Ltd have entered into a written lease agreement whereby Stuart has hired a shop in the Prince Mall for a period of five years. In accordance with the lease agreement, Stuart is required to pay a consideration of $ 1,000 on a weekly basis. He made prompt lease payments during the initial 2.5 years as business was flourishing. However, then business took a downturn and hence Stuart offered Westphalia Marts Pty Ltd to accept a lower monthly lease payment of $ 700 till there is improvement in business which was accepted by the company. Hence, through an oral agreement, an amendment had been done to the original lease agreement. Such modifications are legally enforceable and also the contracting parties would have to comply with the amendments made. Hence, in the given case, the company cannot claim the shortfall of $ 300 per week for 2014 and also cannot demand a rent of $ 1,000 from January, 2015.
It can be concluded, that through the oral agreement between the company and Stuart, the original lease agreement is deemed to have been amended. Hence, now the shortfall cannot be recovered for 2014 and also the lease payment cannot be unilaterally increased to $ 1,000 without Stuart’s consent.
Carter, J 2012, Contract Act in Australia, 3rd eds., LexisNexis Publications, Sydney
Davenport, S & Parker, D 2014, Business and Law in Australia, 2nd eds., LexisNexis Publications, Sydney
Gibson, A & Fraser, D 2014. Business Law, 8th eds., Pearson Publications, Sydney
Latimer, P 2005. Australian business law, 24th eds., CCH Australia Ltd. Sydney
Lindgren, KE 2011, Vermeesch and Lindgren’s Business Law of Australia, 12th eds., LexisNexis Publications, Sydney
Pendleton, W & Vickery, N 2005. Australian business law: principles and applications, 5th eds., Pearson Publications, Sydney
Pathinayake, A 2014, Commercial and Corporations Law, 2nd eds., Thomson-Reuters, Sydney
Cases List:
Brogden v Metropolitan Railway Co. (1877).
Carlill v Carbolic Smoke Ball Co (1893).
Entores Ltd v Miles Far East Corporation (1955).
Felthouse v Bindley (1862)
Gibson v Manchester City Council – CA (1978).
Great Northern Railway Company v Witham (1873).
Hyde v Wrench((1840).
Mendelson-Zeller Co Inc v T & C Providores Pty Ltd(1981).
Powell v Lee (1908).
Stevenson v. McLean (1880)
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