First case comprises the issue regarding the presence of enforceable contract between Bob and Mike.
Second case comprises the issue related to the legal rights on the part of Tom and to extend a legal advice to offeror Bob about his legal duties towards Tom.
The third case involves the issues regarding the past consideration between Steve and Bob and discussion about the legal obligations on the part of Bob.
Fourth case contains the various issues regarding the presence of doctrine of promissory estoppel between the parties and relevant liability of Bob.
The two main elements for enacting a legal enforceable contract are lawful offer and lawful acceptance. Offeror makes an offer to the offeree and the concerned offeree makes an acceptance to the offeror. When the offeree includes some other conditions in the initial offer and then sends the acceptance, then the acceptance becomes a counter offer (Andrews, 2012). The time when the offeree sends the counter offer to the offeror, the initial offer directed on behalf of the offeror gets automatically cancelled. Further, the offeree cannot claim the offeror to enact a contract on the basis of the initial offer. This argument of enforceable contract is highlighted in The Hyde v Wrench (1840) 49 ER 132 case.
As per common law, offer can be revoked by the offeror but it is perquisite that the offer must not have been confirmed by the offeree. Further, if valid acceptance is sent by the offeree, then the contract become enforceable on the parties irrespective of the fact that offeror has ended the offer after the valid acceptance. In this regards, the mode of communication also plays a vital role for the validation of the acceptance (Peel, 2008). The moment when the acceptance is expressed via post then only the acceptance become enforceable (Carter, 2013). Further, it is not important that the post is received by the offer before the specified time or after it. The leading case in this regards is Adams v. Lindsell (1818) 106 ER 25.
The other essential component of contract is existence of lawful consideration. Consideration can be any favor, object, number, promise or act. Moreover, any past act or promise would not form a good consideration for the enactment of contract and any parties who used past consideration for the enactment, then the contract is termed as null or void contract (Andrews, 2012). Therefore, it is essential that the consideration must not be past consideration as per verdict of the Re McArdle (1951) case.
According to the provision of doctrine of promissory estoppel the two parties are believed to be legally obliged to complete the duties irrespective of the fact that one party wants to enter into this relationship or not. The provision states that when one party mistakenly makes a promise to other and same has been communicated to the other party then he made a lawful promise (Peel, 2008). Also, the innocent party is not aware about the unilateral mistake made by the promisor. In this regards, the other party has started carrying out the activity and completely relies on the promise made by the promisor. In such case, the innocent party can bind the promisor to complete the promise as per the decision of Walton’s Stores Ltd v Maher (1988) 164 CLR 387 case (McKendrick, 2003).
Mike has directed an offer to Bob, which specified the cost of computers and mentioned that the cost also covers GST. In the return of the offer, Bob made a counter offer, which states that he accepts the offer only if the cost would not comprise the GST. The moment when Bob has sent the counter offer to Mike at that instant the initial offer gets dismissed. Further, Mike replied back to Bob regarding the rejection of counteroffer. Despite the rejection of counter offer, Bob has sent the acceptance for the initial offer and then sent computer and bills to Mike. In this scenario, the presence of the counter offer results in cancellation of the initial offer. Therefore, Mike and Bob have not entered into a contract and there is no accountability on the part of Mike to fulfill the contractual liabilities.
Tom has unconditionally accepted the offer led by Bob and same has been confirmed with the help of letter sent through post. Further, Bob changed his mind and sent an email regarding the dissolution of the offer. In this case, as enforceable contract has been accomplished by the parties because Bob has sent the mail for the dissolution of the offer after the validation of the acceptance and hence, parties are entered into an enforceable contract relation. Therefore, Bob is liable to complete the promise mentioned in offer.
Steve had executed a favor for Bob by taking care of his pet (cat) at the time when he was interstate for holiday. When Bob came back, Steve requested to issue him a new computer system. Bob has stated that he would give a computer owing to Steve taking care of his cat but later denied. It is apparent that the favor done by Steve is a past consideration and the contract cannot be executed based on the past consideration and thus, the parties have not entered into an enforceable contractual relation.
Bob was negotiating about the acquisition of a van with Mary (sale manager). Later on Mary sent a letter to Bob, which Bob signed by mistake. which Mary received the fax and on the account of the promise, she ordered the van for the stock and the existing van dispatched for the delivery to Bob. It is evident that Mary has performed the activities by trusting the promise extended on the part of Bob and thus, Bon and Mary are in legal relation based on the provision of doctrine of promissory estoppel. Hence, Bob has the liability to accomplish the promise.
Conclusion
No contract is enacted between Mike and Bob on the account of the counter offer.
An enforceable contract is created between Tom and Bob. Hence, Bob is accountable to execute the promise made in the offer or else Tom is liable to sue him on the account of not fulfilling the duties.
Steve has made claim based on the past favor. Hence, no contract is enacted between them and thus, Bob is not legally bound to issue him computer system.
Bob has made unilateral mistake, which leads the doctrine of promissory estoppel and hence, he has to satisfy the act stated in promise.
Reference
Books
Andrews, N, (2012). Contract Law (4rd ed.). Cambridge: Cambridge University Press.
Carter, J. (2013). Contract Act in Australia (5rd ed.). Sydney: LexisNexis Publications. McKendrick, E. (2003). Contract Law (5th ed.). Basingstoke: Palgrave.
Peel, E. (2008). The Law of Contract (7th ed.). London: Thompson.
Case law
Hyde v Wrench (1840) 49 ER 132
Adams v. Lindsell (1818) 106 ER 25
Re McArdle (1951)
Walton’s Stores Ltd v Maher (1988) 164 CLR 387
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