In Australia, the law of contract is a very important piece of legislation and every party must comply with its requisite prior establishing any contractual relationship, the present assignment aims at introducing these elements of contract and how the same can be applied in any given scenario.
Also, the present assignment aims at understating various Alternate Dispute Resolution mechanisms which are now used by the litigants to resolve their disputes. Two of the most prominent dispute resolution mechanism is Arbitration and conciliation. Both of them are evaluated by considering their pros and cons.
A contract is an outcome of a relationship which is made amid two parties wherein one party (offeror) makes offer which is approved by another (offeree) along with consideration, intention and capacity. (Handbook, 2015)
When an offer is made then, an offeror transfers his wish to an offeree and specifies his terms and makes an expectation that his offer will be affirmed (Gibson v Manchester City Council, 1978).
When the offer is not made but, any person wish to receive offers then he make invitations and this act is called invitation to treat. An inviter either may advertise or display goods or place catalogues etc and desire to receive offers (Pharmaceutical Society v Boots Chemists , (1953)). Offers must be received by an inviter through the people who are relying on the invitation. If an invitation is made to specific persons or class of persons then the offers must be received by them only. This offer should be accepted by the offeror (inviter) in order to make a valid agreement (Fisher v Bell , 1961). (Robert & Bibi, 1998)
Thus, when a valid offer is made then the offeree should approve of such an offer and is called acceptance. A valid acceptance is one which reciprocates to the terms of the offer (Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd, 1988). Any acceptance which does not comply with offer terms is counter offer which terminates the offer so made. The counter offer is the new offer which if agreed makes a valid agreement (Hyde v Wrench, 1840). (Latimer, 2012)
When any acceptance is made then the offeree must make efforts so that such acceptance is within the knowledge of the offeror. It is only then an acceptance is considered to be valid. If the acceptance is intended but the same is not communicated then there is no acceptance (Felthouse v Bindley, 1862).
Also, when an offer and acceptance is made by the parties, then, at that time, the parties must be making the promises with the legal intention to bind by the same. In family arrangements this legal intention is normally missing and is profound in commercial relationship. But, this presumption can be invalidated by laying down valid evidence. (H.K.Luke, 1970)
At Kaplan higher education, a credit grade was give to Alan in commercial law. he now intends to sell his ‘“Introduction to Business Law in Singapore”, textbook. The intention of selling the book was communicated by him to his friends through facebook.
He posted on 1st November 2015, that all of his friends who are still enrolling or have already enrolled in Kaplan Higher Education may if intend can buy the textbook along with notes from Alan. He quoted the selling price of the book and notes at $ 200 and the time limit for the validation of advertisement was till 5th November 2015.
Now, considering the facts in (Pharmaceutical Society v Boots Chemists , (1953))any advertisement is an invitation to treat and not offers.
Alan has also advertised for the sale of his book and notes to his friend via facebook. So, the text of Alan is also an invitation.
But, an invitation can be made to specific class of persons and the acceptance must also be received from such class only as per (Carlill v Carbolic Smoke Ball Company, 1892).
So, Alan has invited only his facebook friend thus offers must also be made only by them and any offer by some other person in content of the invitation is not a valid offer.
A contract is made between Damien and Alan when Alan takes the money from Damien in the evening of 4th November. There is an instant offer and acceptance that took place amid the parties.
Bernard is the facebook friend of Alan. Also, he is enrolled in Kaplan Higher Education. So, as per, (Pharmaceutical Society v Boots Chemists , (1953)), an invitation is valid against Bernard and he can make an offer to Alan.
Now, made an offer to buy the textbook for $ 150. The offer was made on 2nd November 2015.
Against the offer, Alan submitted on 3rd that he is not intent to sell the book at $150 and will only sell at $200. So, the offer by Bernard is rejected by Alan. He further quoted that he can only sell the book $ 200. As per (Stevenson, Jaques, & Co v McLean, 1880), no quote can be considered to be an offer.
So, there is no offer on the part of Alan.
So, on 3rd night, Bernard put the $200 in an envelope and posted the same to Alan which was received by him on 5th November 2015.
It is submitted that when an offer is made and when the acceptance is made through post then the acceptance is deem to complete when the letter is posted. But, when Bernard posted the letter of acceptance at that time there was no offer which was made by Alan. So, the acceptance by Bernard has no legal basis.
So, there can be no contract that can be established amid the parties.
So, when Alan passed the book to him on 7th November then it has no relevance and he can seek the money back from him.
Now, Charleen is the younger sister of Alan. She is taking her GCE “O” levels this year. She is also enrolled in Kaplan Higher Education and is also one of the friends on facebook with Alan. So, as per (Pharmaceutical Society v Boots Chemists , (1953)) she can make an offer to the invitation of Alan.
On 2nd November 2015 (morning), she communicated his desire to purchase the book at $200. However, when the offer was made at that time Alan was still in bed and he thought that his sister must be made of thinking the subject and he just smiled. When she asked that can she deli8ber the money to him on 6th, at that time Alan was thinking of his favorite football team’s performance at last weekend’s match and nodded.
However, this is not an acceptance as the offeree must have intention to make an acceptance while communicating the same. If the offeree is not aware of the offer when the acceptance was made then such acceptance has no validity in law.
So, there is no valid acceptance to the offer made by Charleen. Thus, when Charleen left the money on Alan’s table on 6th November, then, such acts of Charleen has no reliance.
So, there is no concluding contract between the parties.
Damien is also studying at Kaplan Higher Education. He is not the friend of Alan nor he was on the facebook friend list of Alan. He was the friend of Bernard. Thus, the invitation is not meant to be for him. Thus, he cannot make any offer which is based on the invitation made by Alan.
However, he heard of the offer of Alan from Bernard and is interested in buying the book and notes. He took the phone number of Alan from Bernard and sent him a message.
Now, through message he submitted that he is interested in buying the book and can ent the money by 4th November. Later in the evening of 4th, he saw Alan in Kaplan Higher Education. He reached to Alan and he hand over $200 to Alan and stated that it is the money for the book. Now, the initial offer that is made by Damien has no relevance as he was not qualified to make such offers. But, when he provided money along with his intention to buy the book, then, a new offer is made by him to Alan which is not based on the advertisement that is issued by Alan. So. When Alan received the money and agreed to supply the book and notes to him on 7th November, then, it is called acceptance on the part of Alan which is duly received by Damien. Both book and notes are provided to him, so, there is a valid contract that is made amid the two.
Today with the pace with which the development and technology are progressing there are number of situations wherein the ideologies of people does not match and which results in raising disputes amid the parties. In earlier times, whenever there are disputes amid the parties, the same are resolved by court process. However, by major economic changes propel are now intent to resolve the conflicts at much speed. This is because the disputes in court are a very long process which is not only very harsh but also very expensive. There are very long procedure and paper work which is involved and thus in order to overcome this shortcoming a new dispute resolution system was developed called Alternate Dispute Resolution Mechanism (ADR). (Clarb, 2014)
An ADR is a technique wherein there is no involvement of court process, rather, the disputes are resolved with the help of some third party who is not only neutral but also independent in its approach. Normally, there are two kinds of ADR techniques that are availed by the parties. the same are:
Arbitration – it is a dispute settling technique wherein the parties appoint a neutral person who is independent in his approach and he acts like a quasi judicial officer. He looks into all the facts and evidences of the case and the decision that is imposed by an arbitrator is binding upon the parties.
An arbitration procedure is very advantageous because it s a formal procedure where confidentiality of the parties is maintained. Also, since the decision is binding upon the parties then there are no chances that the dispute will continue in the court of law. the parties intent to resolve their disputes and thus there are chances of easy resolution.
But, there are few drawbacks that can also be associated with arbitration, that is, since there is proper formal procedure for dispute resolution then it is also very time consuming. The same is also expensive. Also, since the arbitrator is aware that his decision is binding then he at times act like a dictator. (Michael, 2013)
Mediation – It is also one of the ways in which the dispute is settled amid the parties. In this case also a neutral person is appointed by the parties to resolve the disputes.
There are various advantages that can be associated with mediation process is that there are less formalities that are required to resolve the disputes. Also, the disputes are resolved much quicker when compared with litigation and is also less expensive.
However, there are few disadvantages also such as, the parties can still the help of court of wants to challenge the decision of the mediator; the decision is not binding upon the parties; there is not much confidentiality that can be retained in mediation. Both the dispute resolution mechanism is important and can be availed by the parties in order to resolve their disputes. (Michael, 2013)
Conclusion
It is thus concluded that a valid contract has been established amid Damien and Alan at a time when Damien showed his intention to purchase the book in the evening of 4th November and Alan confirmed the offer made by Damien there and then. Also, there are two major kinds of Alternate dispute resolution mechanism, that is, arbitration and conciliation and both of them are very important laws and must be govern adequately. These dispute resolution mechanisms are better when the disputes are to be resolved in quick time.
Carlill v Carbolic Smoke Ball Company (1892).
Clarb. (2014). ADR, Arbitration, and Mediation. Author House.
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988).
Felthouse v Bindley (1862).
Fisher v Bell (1961).
Gibson v Manchester City Council (1978).
H.K.Luke. (1970). The Intnetion to create Legal Relations. The Adelaide Law Review .
Handbook, T. L. (2015, June 30). The Law Hand Book. Retrieved May 20, 2017, from Elements of a contract: https://www.lawhandbook.org.au/07_01_02_elements_of_a_contract/
Hyde v Wrench (1840).
Latimer, P. (2012). Australian Business Law 2012. CCH Australia Limited.
Michael, L. (2013). The Future of Dispute Resolution. LexisNexis Butterworths.
Pharmaceutical Society v Boots Chemists ((1953)).
Robert, M., & Bibi, S. (1998). NetK. Retrieved May 20, 2017, from Contract Law Lecture – Formation of Contract – Offer and Acceptance: https://netk.net.au/Contract/02Formation.asp
Stevenson, Jaques, & Co v McLean (1880).
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