Whether there existed a valid contract between Plant Forever and University of Millenia?
Whether there was a valid acceptance of offer by Greenland?
Whether there was a valid acceptance of offer by Enviro?
Traditionally contractual agreements are analysed in the terms of ‘offer and acceptance’. An offer is made by the offerors which upon acceptance by the offeree becomes a binding contract. There is however a distinction that exists between invitation to treat and offer. An offer leads to a contract that is binding on acceptance however there is no acceptance for invitation to it is only an invitation for making offers. Contract by tender is a representation of invitation to treat and each of the tender that is submitted amounts to an offer unless it has been specified that either the highest or lowest tender would be accepted or any other such condition. If there are certain conditions that are mentioned as stated before then such a contract would be a unilateral contract (Carlill v Carbolic Smoke Ball Company [1893]).
In common law the general rule states that invitation to tender is not an offer but only an invitation to negotiate (Spencer v. Harding [1870]). It has to be a clear invitation that needs to be addressed to small portion of parties who are interested.
A key role is played by acceptance in an offer and it can be defined as an assent that is unconditional that is communicated by the buyer with all the offer’s terms. It means that there is an agreement by the offeree to be bound by all the offer’s terms. There is general rule that is developed by courts with respect to acceptance. First the acceptance made for the offer is required to be communicated in a manner which is implied or requested in the offer by the offeror (Powell v Lee [1908]). Secondly if there is a established a new term or a term that is varied from the term of the offer by the offeree then it cannot be stated that the reply would lead to an acceptance of the offer. Instead it would be treated as a counter offer which is up the original offeror to either reject or accept (Hyde v Wrench (1840)). The third and most essential is that there should be determined a legal existence of acceptance and an offer to the acceptance (Peel and Treitel, 2011).
The rule of postal acceptance states that acceptance to an offer take place once that letter has been posted for the acceptance of the offer (Adams v Lindsell [1818]), even if the letter is lost or it goes astray (Household Fire [1879]). However an offer made would only be considered as made once it reaches the the offeree. It has been confirmed by later cases that the rule of Adams v Lindsell would be applicable whenever it was reasonable to expect the postal acceptance by the offeror (Henthorn v Fraser [182]). The only manner in which this expectation can be removed is if there is an express instruction by the offeror, in which the postal rule is displaced by the ‘notice in writing’ requirement.
In the case of Greenland and Enviro, the University’s tender was only an an invitation to offer, it was also not a unilateral contract where acceptance could be made simply by doing a certain or fulfilling a certain condition. There was thus no binding on the University to accept the offers made by Greenland and Enviro in response to the tender/invitation to offer made by the University.
In the case of Plant Forever since there was an offer which was made by Plant Forever to the University and which the university accepted there is a valid contract that exists and Plant Forever is liable to fulfill the conditions of such a contract. As per the Postal Rule an offer is accepted once the acceptance is posted and since there was no written notification Plant Forever could have reasonably expected for the offer to come via postal services.
Conclusion
Conclusively it can be stated that the University made a tender which was an invitation to treat for which offers were made by the three companies Greenland, Enviro and Plant Forever. However, the response to the tenders was not an acceptance to an offer but an invitation to make offer therefore there was no binding on the University for the invitation to treat. Once the University accepted one of the offers it would form as binding as with Plant Forever.
Displays and advertisements are regarded generally as an invitation to treat and not as an offer (Boots Cash Chemist) because there is requirement for the protection of the party who has placed the advertisement for any liability that is intermediate.
There are two ways that advertisement can be divided advertisement of unilateral contract and advertisement of bilateral contract. A bilateral advertisement does not amount to being an offer and is an an invitation for creation of an offer. The two main reasons for which bilateral advertisement does not amount to offer are that first there may be further bargaining that it may lead to; and second there may be a requirement for the seller to be sure as to whether there is an ability that the purchaser has for making the payment of the good’s price before the contract is entered into (The law of contract, 2010). It was in the case of Partridge v Crittenden (Partridge v Crittenden [1968])and Grainger & Son v Gough (Grainger & Son v Gough [1896]), where the said principle was explained. In the case of Patridge there was an advertisement which was made for selling wild birds. It was opined by the Court of Appeal that it was not an offer but only an invitation to treat since it was bilateral in nature. A unilateral offer general states the reward or price as stated by the common would constitute an offer as was opined in the Carlill case.
If there is counter-offer which is made then the original offer will cease to exist. This would include trying to get more favorable terms in the offer such as reduction of price (Hyde vs. Wrench [1840]).
A binding contract is formed once there is a valid acceptance that takes place. It is therefore essential to understand what forms a valid acceptance in order for it to be established whether the parties to a contract would be bound by it. Three main rules exist with relation to an acceptance:
The general rule of communication is that the acceptance should be received by the offeror prior to it is effective date (Entorres v Miles Far East, [1955]).
Footloose Pty Ltd and Famous Shoes: The advertisement is only an invitation to treat as it is clearly a unilateral advertisement which states the starting pricing and calls for negotiation. It does not state a specific price or reward for a particular act. Since bilateral advertisement as mentioned is only an invitation to treat there cannot be an acceptance to such offer and it only calls for offers to be made. Thus there is no binding contract between Footloose Pty Ltd and Famous Shoes.
Footloose Pty Ltd and James’s Shoes: The advertisement being an invitation to treat an offer was made by James’s shoes on 4th October. To this offer a counter offer was made by Footloose Pty Ltd on 6th October, this counter offer forms a new offer and not an acceptance to an old offer, this makes the old offer made on 4th October redundant. This offer was accepted clearly and certainly with all the terms matching on 8th of October where it was mentioned specifically that the offer made on 6th of October has been accepted. There has been an agreement reached between the parties regarding the price and date and place of delivery, thus a valid contract with offer and acceptance has come to play between both the parties.
Conclusion
Thus it can be stated conclusively that there is no valid contract that exists between Footloose Pty Ltd and Famous Shoes however there is a valid and binding contract that exists between Footloose Pty Ltd and James’s Shoes
References
Adams v Lindsell [1818]1 B & Ald 681.
Carlill v Carbolic Smoke Ball Company [1893]EWCA Civ 1.
Entorres v Miles Far East [1955]2 QB 327.
Grainger & Son v Gough [1896]AC 325.
Henthorn v Fraser [1892]2 Ch 27.
Household Fire and Carriage Insurance Co v Grant [1879]4ex d 219.
Hyde v Wrench [1840]3 Beav 334.
Hyde vs. Wrench [1840]EWHC Ch J90.
Partridge v Crittenden [1968] [1968]1 WLR 1204.
Peel, E. and Treitel, G. (2011). The law of contract. London: Sweet & Maxwell.
Powell v Lee [1908]99 LT 284.
Spencer v. Harding [1870]LR 5 CP 561.
The law of contract. (2010). London: LexisNexis.
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