i. To evaluate the contractual relationship between Josie and Sam?
ii. If there is contract between Josie and Sam, then, is there a contractual breach. If Yes, then what are the remedies that are available?
A contract can be established amid the parties by the presence of offer, acceptance, consideration, and intention and parties capacity.
An offeror starts an offer by making a suggestion to an offeree wherein he specifies his expectations that he wants the offeree to perform. When the offer which is so made is reciprocated by an offeree in an affirmative manner, then, it is an acceptance in law.
No confirmation by offeree is rejection of offer. But, a rejection can also be made when the offeree submits that he is willing to approve the offer but with some changes. It is settled that an acceptance is valid only when it is same as the offer. Changes and alterations is no acceptance and is called counter offer which is rejection of an offer and the counter offer is converted into a new offer and if approved again without any variations, results in contract.
An offer must reach the offeree and the acceptance must reach the offeror to make them legal. If an acceptance is made through post then it is final when the letter is posted but in other cases it must reach the offeror to make it binding.
If an offeror wants to cancel the offer the revocation must be made before acceptance. When the offer is revoked by leaving the message on the answering machine then it is complete when the same is communicated during normal working hours. But, when an acceptance is to be revoked then the same must be done before the same is received by an offeror. Once received by an offeror an acceptance is valid.
Also, when offers are not made but are invited then they are invitations. They are normally made by advertising, display of goods, catalogue, etc. The interested part makes an offer and the same when approved by the inviter makes a contract between the parties.
Further, a valid contract when made must be performed by the parties. If a party violates a contract term then there is breach. If the breach is of such a term that is core to the contract then the condition is breached and will allow the cancellation of contract and seeking damages. But, if additional terms are violated that are not core to the contract then the warranties are breached and only damages can be claimed and the contract remains valid.
Josie is an artist and makes pictures which she sells through her studio. She once made living painting watercolors of sunflowers. She placed the painting at her studio and placed a price tag adjacent to the painting which depicts the amount of $ 900.
In Fisher v Bell , a distinction is made amid an offer and an invitation wherein goods displayed with price tags are held to be in the category of invitation. So, the display of painting by Josie is an act of invitation and she must act like an offeree and she should either accept or reject the offers so received.
Sam visited Josie on 19th February (Sunday) and acted like an offeror and thus offered to purchase the painting by paying $ 700.
So, Sam by acting as an offeror made a valid offer which is duly heard by Josie making it complete and valid.
Josie instead of accepting the offer so made by Sam, made a counter reply, that, she cannot confirm an offer below $ 800. So, there was a clear rejection on the part of Josie as she brought variations in the terms of offer by changing the price. So, a counter offer is made which is equivalent in new offer
The new offer communicated to Sam in written form wherein Josie submitted that the offer of $ 800 to sell the painting to Sam is made and the acceptance can be made till 21st February (Tuesday).
Normally, when an offer is made then the same can be revoked before it is accepted. Josie, on 20th February (Monday) sold the painting to Wendy and thus she now wants to cancel her offer against Sam. She calls Sam and communicates the facts that the painting was sold.
Now, the normal rule is that when the revocation is made the same is valid when it is communicated. When revocation is made on faxes, answering machines, then, as per Re Imperial Land Co of Marseilles (Townsend’s Case), it is deem to be communicated if the same is made during the normal working hours of the business.
Before Sam can listen to the answering machine, he calls Josie at 10 AM but was not able to communicate his confirmation. So, there is no acceptance. However, the revocation of offer by Josie should deem to be complete. Thus, when the letter of acceptance is posted by Sam which is received by Josie on 23rd have no relevance.
So, a contract is established between Sam and Josie.
If there is contractual relationship between Sam and Josie, then, Josie was in breach of contract by selling the painting to Wendy. Now, the core of the contract was the sale of the painting and when the same was supplied to someone else, thus, the essence of contract is breached. So, a condition is not comply with which will grant right to Sam to terminate the contract and he can sue Josie for damages and compensation.
Conclusion
A contract is not made between Sam and Josie because the offer was revoke before the same had been accepted by Sam. If it is presumed that a contract do exist amid them, then, Josie is in contract volition and should pay damages and compensation to Josie.
2. The simple rule that is laid down in Pinnel’s Case simply submits that there must be consideration, that is, some kind of benefit or gain to support the promises that are exchanged amid the parties, in every kind of simple contracts. This rule is found to be fair and sensible, however, there are times when this simple rule that is laid down in Pinnel’s Case is found to be inapplicable.
Prior Pinnel’s Case, there was a landmark case of Stilk v Myrick. It is an English law case wherein the main subject matter of concern is Consideration. It is submitted by Lord Ellenborough that when a contract is to be performed by any person and he is duty bound to perform the same, then, such duty cannot become a good consideration for any new contract. Thus, even a simple and ordinary promise is only enforceable in law provided there must be consideration to support the same. In Williams v Roffey Bros & Nicholls (Contractors) Ltd, a slight deviation was made and it was held that a simple contract which requires consideration for its enforceability can still become enforceable by presence of economic duress, but, there has to be some form of consideration to support the promises.
To state generally, a consideration is something which is sufficient enough to hold the promises enforceable in law. It is not required to be relevant in nature but it must be something which supports the promises that is exchanged amid the promisor and the promisee.
But, how the principle of consideration is applicable when there is part payment of debt that is made by one party to another. When a creditor assures that he will consider the discharge of full payment of debt when the debtor will pay him part of the same, then, in law, the same was not held to be a valid consideration. This is mainly that how a small amount of money is capable enough to satisfy the want of larger sum of money. This is the guiding force that was evolved in Pinnel’s Case.
The facts of the case revels that there was a bond that was established amid D and P and P sued D over such bond. However, it was contended by D that P has taken £5 2/6d on 1st October from D against the full and finals settlement of the amount £8 10s. D has to pay the amount on 11th November but has agreed to pay the same on 1st October as P was ready to accept the reduced amount for full and final settlement. The court upheld the transaction valid and submitted that any settlement before the due date is valid but of the same has taken place on the same day when the amount was due, then, it is not a good consideration for the settlement of the due amount.
Later in Foakes v Beer the courts willingly applied the law that was settled in Pinnel’s Case. As per the facts, Mrs Beer has to take £2,000 from Dr Foakes as per the ruling of a judgment. It was agreed amid the parties that £500 will be paid by Dr Foakes at a time and the rest will be paid in installments and against the said agreement there will no judicial proceedings that are taken by Mrs Beer till the time the installments are been paid. However, neither of the parties discussed on the issue of interests on the payments that were paid. When all the installments were paid, Mrs Beer sued Dr Foakes on the amount of interest. The court held that no settlement can be achieved by paying off less in exchange for the settlement of the full amount and thus Dr Foakes must pay the interest amount.
It is a simple rule that if the parties are willing to change the terms of the contract then the same should always be supported with some kind of gain or benefit, that is, consideration, in order to hold the change as valid in law. The decision was retreated in various cases and it was held that no part payment can be held to be good consideration for the whole of the amount.
However, there is two basic principles to the said rule, that is,
i. When the part payment is made not in the due date but the settlement is achieved prior to the due date.
ii. Also, if the debtor is paying off or setting off the whole of the amount in exchange of something other than money then also such set off is considered to be valid in law.
Thus, a general principle was established in the Pinnel’s Case that no lesser sum of money can set off a larger amount of the settlement is taking place on the due date. But, if the settlement is taking place before the due date or in exchange of something other than money than the rule is not applicable.
But, this rule has its own setbacks. The courts have analyzed that a creditor can take a canary or horse or tomtit for the full settle of the claim but is not permitted to take a lesser amount unless the settle is taking place before the due date. Thus there is a need that the landmark decision that is laid down in Pinnel’s Case must be changed and must be brought to the level of the need of the time. Considering the above scenario, there are few exceptions which are applicable upon which the rule laid down in Pinnel’s Case is not applicable. The same are:
i. Whenever there is payment of the part of the debt by any third party then the rule laid down in Pinnel’s Case is not applicable. When the third party pay part of the debt to the creditor and as per which the debtor is relived from any dues then such kind of settlement is held to be valid in law;
ii. When there is applicability of the promissory topple then there is no application of Pinnel’s Case. The rule of estoppel submits that when on the promise made by one party, the other party indulges in some kind of act or omission, then, the first party who has made the promise is not allowed to avoid or back out from his words and must perform the promise so declared by him. So, if the creditor promised that he will relieve the debtor from al the dues if part payment of dent is made and on such promise the debtor undertook some act or omission, then, the creditor is compelled to fulfil his promisee and is valid in law;
iii. Whenever a composition agreement is settled and established amid the creditors and debtors wherein the debtors are relieved from the debt of part payment is made to the group of creditors, then, such kind of settlement is valid in law. No single creditor can later bring any kind of action against the debtor
To conclude it can be submitted that the rule in Pinnel’s case is very essential as it submits that no part payment can set off the whole of the claim amount unless the set off has taken place before the due date or against something valuable but not money. But, this basic principle was held to be invalid and criticized in Couldery v Bartrum . Thus, there is a great need that the exceptions must be applied wherever possible to bring just and equitable results.
Books/Articles/Journals
Clark, Eugene, ‘Cyber Law in Australia’ (Kluwer Law International, 2010).
Hill, Simone W. B, ‘Email Contracts – When is the Contract Formed?’ [2001] JlLawInfoSci 4
Malbon, J and Bishop, B, ‘Australian Export’ (Cambridge University Press, 30-Oct-2014).
Neyers, Jason W , Richard Bronaugh and Stephen G A Pitel, ‘Exploring Contract Law’ Bloomsbury Publishing, 14-May-2009).
Case laws
Adam v Lindsell [1818] EWHC J59.
Associated Newspapers Ltd v Bancks [1955] HCA 24.
Australia cotton case (17 September 2003).
Bettini v Gye (1876).
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
Coulls v Bagots Executor & Trustee Co Ltd (1967).
Foakes v Beer (1883-84).
Fisher v Bell [1961] 1 QB 394.
Musumeci v Winadell Pty Ltd. (1994) 34 NSWLR 723.
Pinnel’s Case [1602].
Re Imperial Land Co of Marseilles (Townsend’s Case) (1871) LR 13 Eq 148.
Stilk v Myrick [1809] EWHC KB J58.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download