I BOB AND CARL
A Issue
Does agreement exist at time letter is posted and if it does can the acceptance be revoked by a more direct method of communication?
B Law & C Application
The postal acceptance rule only applies if it is reasonable, authorised or within contemplation of the parties, that the acceptance will be by letter. Acceptance is complete as soon as the letter is posted. It seems reasonable that communication of acceptance in the case of Bob and Carl should be by letter because Carl specifies this in the offer that he initially emailed to Bob.
After sending his acceptance by letter, Bob then decides to withdraw from the contract and uses a more direct method of communication i.e. a message on Carl’s answering machine, to do …show more content…
The acceptance cannot be revoked regardless of whether notification of revocation is delivered using a more direct method of communication. Posting of acceptance ultimately results in the formation of a contract and as such the offeree cannot unilaterally withdraw, without the agreement of the offeror. This view is represented by the case of Wenkheim v Arndt. If this approach is taken the acceptance cannot be revoked particularly since Carl was uninformed of Bob’s intention to withdraw, because he had ignored the message left on his messaging system.
The second approach states that no contract is formed because the offeree has rejected the contract in the first formal communication with the offeror, although the acceptance letter was posted. The postal acceptance rule does not apply in this situation. This view is represented by the case of Dunmore v Alexander. Thus, Bob would be able to revoke his acceptance since the message left for Carl was the first formal communication made to the offeree, despite the fact that Carl ignored the …show more content…
The formal contract serves as a means of restating this agreement in a more formalized manner, which is what Elaine wants to achieve in order to be reassured, since Bob does not have the equipment in his possession yet. As a result, the preliminary oral agreement is enforceable against Elaine even though it was never written into a formal contract.
IV BOB AND FRANK
A Issue
Is there an enforceable contract between the two parties?
B Law & C Application
The three principle elements of contract formation are agreement, consideration and intention. Agreement can be determined by applying the rules of offer and acceptance. With regard to Bob and Frank, as far as can be told from the scenario, it would appear that Frank has extended an offer to purchase the system which Bob then agrees to sell for $5,000. There is an exchange of promises and this is considered to be sufficient consideration by the Courts. This fundamental rule is explained in the Woolworths v Kelly case.
D Conclusion
Bob has agreed to sell the air conditioning system for $5,000 and with the limited information provided in the scenario the parties seem to have an intention to be legally bound after reaching agreement on the sale. Therefore, an enforceable contract exists between the two
A Issue
Does agreement exist at time letter is posted and if it does can the acceptance be revoked by a more direct method of communication?
B Law & C Application
The postal acceptance rule only applies if it is reasonable, authorised or within contemplation of the parties, that the acceptance will be by letter. Acceptance is complete as soon as the letter is posted. It seems reasonable that communication of acceptance in the case of Bob and Carl should be by letter because Carl specifies this in the offer that he initially emailed to Bob.
After sending his acceptance by letter, Bob then decides to withdraw from the contract and uses a more direct method of communication i.e. a message on Carl’s answering machine, to do …show more content…
The acceptance cannot be revoked regardless of whether notification of revocation is delivered using a more direct method of communication. Posting of acceptance ultimately results in the formation of a contract and as such the offeree cannot unilaterally withdraw, without the agreement of the offeror. This view is represented by the case of Wenkheim v Arndt. If this approach is taken the acceptance cannot be revoked particularly since Carl was uninformed of Bob’s intention to withdraw, because he had ignored the message left on his messaging system.
The second approach states that no contract is formed because the offeree has rejected the contract in the first formal communication with the offeror, although the acceptance letter was posted. The postal acceptance rule does not apply in this situation. This view is represented by the case of Dunmore v Alexander. Thus, Bob would be able to revoke his acceptance since the message left for Carl was the first formal communication made to the offeree, despite the fact that Carl ignored the …show more content…
The formal contract serves as a means of restating this agreement in a more formalized manner, which is what Elaine wants to achieve in order to be reassured, since Bob does not have the equipment in his possession yet. As a result, the preliminary oral agreement is enforceable against Elaine even though it was never written into a formal contract.
IV BOB AND FRANK
A Issue
Is there an enforceable contract between the two parties?
B Law & C Application
The three principle elements of contract formation are agreement, consideration and intention. Agreement can be determined by applying the rules of offer and acceptance. With regard to Bob and Frank, as far as can be told from the scenario, it would appear that Frank has extended an offer to purchase the system which Bob then agrees to sell for $5,000. There is an exchange of promises and this is considered to be sufficient consideration by the Courts. This fundamental rule is explained in the Woolworths v Kelly case.
D Conclusion
Bob has agreed to sell the air conditioning system for $5,000 and with the limited information provided in the scenario the parties seem to have an intention to be legally bound after reaching agreement on the sale. Therefore, an enforceable contract exists between the two