Contract Law Assignment : Analyzing Case Study Using Ilac Method

Question

On September 5 Robert wrote to Cameron offering to sell 50 metric tons of wheat at $250 per metric tonne. On September 7 Cameron posted a reply in which he accepted Robert’s offer but added that if he did not hear to the contrary he would assume that the price included delivery to his (Cameron’s) warehouse. The following morning, before Cameron’s letter arrived at Robert’s office, Robert read a posting on the internet which stated that the price of wheat was about to fall and he immediately sent an email to Cameron stating ‘our price of $250 includes delivery’.

On receiving Robert’s email at 10am on September 8, Cameron posted a letter to Robert confirming his acceptance of Robert’s terms. By mid-day, however, Cameron also saw the posting on the internet which indicated that wheat prices were about to fall and, having considered the matter, sent an email to Robert stating ‘I do not accept your offer of wheat’.

The price of wheat fell to $230 per metric tonne and Cameron refuses to accept any wheat from Robert. Question 1: Advise Robert regarding the above.

Answer

Issue: Can Robert obligate to Cameron to comply with the contract. Is there exists a contract amid the two?

Relevant Law: As contract law assignment contract is the formation of an offer combined with acceptance which is supported by consideration by the capable parties who have a legally binding legal intention. (Latimer, 2012)

When the offeror conveys his intention of any act/omission to the offeree with the expectation that such communication would be confirmed by an offeree then it is an offer in law (Smith v Hughes [1871]. An offer can be made by words, in written form or by conduct (Carlill v. Carbolic Smoke Ball Co (1891) but as per Felthouse v Bindley (1862) the offeree must be in the knowledge of the same in order to consider the offer valid and enforceable in law.

Whenever an offer is made as described in this assignment in contract law, then, the offeree when gave his approval to the offer terms results in an acceptance and is held in Empirall Holdings v Machon (1988). As per Stevenson Jaques& Co v McLean (1880) an acceptance should coincide with the offer terms otherwise such an acceptance is invalid and is considered as counter offer.

Further, when an acceptance is made then as per Brambles Holdings Ltd v Bathurst City Council (2001) an acceptance should reach the knowledge of the offeror in order to be enforceable. Non transmission of acceptance is not a valid acceptance and is held in Latec Finance Ltd v Knight (1969).. (Bailey, 2014)

Further, if acceptance is made through letters then the acceptance is complete when the letter is posted and is held in Adams v Lindsell (1818).

Applicable Law: As per the facts,

On 5th September, Robert had written a letter to Cameron wherein he offered to sell 50 metric tonnes of wheat @ $250 per metric tonne.

As per Felthouse v Bindley an offer when made must reach the mind of the offeree and he must be aware of the terms of the offer in order to consider any offer to be enforceable in law. Since the offer made by Robert is in the knowledge of Cameron, thus, the offer is valid.

Now, on 7th September, a reply is posted by Cameron wherein an acceptance is furnished but a term is included specifying that if nothing is heard from Robert then it will be assumed that the price of the offer is inclusive of delivery to his warehouse.

Generally, as per Adams v Lindsell as discussed in this assignment in contract law when an acceptance is made by post then it is binding immediately. But, the rule does not apply hear as the acceptance made by Cameron is not valid as a new term is incorporated by Cameron. Thus, as per Stevenson Jaques& Co v McLean a counter offer is made by Cameron to Robert on 7th September.

Now, the new offer exists which is made by Cameron to Robert on 7th September.

Cameron is the new offeror and Robert is the new offeree. The letter must reach Robert in order to consider the same as binding and enforceable.

Now, before the letter reaches Robert, Robert read a post according to which the prices of the wheat will decline. Considering the same an email is sent by Robert to Cameron wherein he submitted that the prices of the wheat are inclusive of delivery.

Now, this statement that is made by Robert to Cameron is not considered as an acceptance in law as an acceptance can only be made when the offeree is aware of the terms of the offer. An acceptance without being aware of the offer terms is not an acceptance in law and is held in Empirall Holdings v Machon. Thus, the email sent by Robert has no relevance in law.

The position is still the same, that is, Robert must send his acceptance to the counter offer made by Cameron.

The email that was sent by Robert was received by Cameron on 8th September at 10AM. Cameron then sends a letter to Robert wherein he accepts the offer that is initially made by Robert.

If Cameron would have accepted the offer initially without adding any new term, that is, the price must be inclusive of delivery, then, by applying the rule of Empirall Holdings v Machon the acceptance would have been valid.

But, now, the acceptance that is made by Cameron is against such an offer which no longer exist as the original offer that is made by Robert already ceases to exists because of the counter offer that is made by Cameron on 7th September. Cameron is the new offeror and he himself cannot accept his own offer, rather, it is Robert who must accept the offer.

Later Cameron also saw the news with respect to the fall in the price and again sent an email wherein he submits that he is not willing to accept the offer of the wheat which was initially sent by Robert on 5th September. It is stated that there is no relevance that is attributed to the mail that is sent by Cameron now, as the mail is sent against that offer which already ceases to exist by Cameron himself by making a counter offer.

Thus, the revocation of offer by Cameron has no validly.

It is submitted that the only offer that now prevails is the counter offer that is made by Cameron on 7th September. This, counter offer was never accepted by Robert giving rise to a legally binding agreement.

Conclusion
It is thus concluded in this contract law assignment that there is no contract that is established amid Robert and Cameron. The offer of Robert was rejected by the counter offer of Cameron. The new counter offer was never confirmed by Robert in order to establish a binding relationship amid the parties as discussed in this assignment in contract law. Contract law assignments are being prepared by our law homework help experts from top universities which let us to provide you a reliable assignment help online service.

Reference List
Bailey, J. (2014) Construction Law. CRC Press.

Latimer, P. (2012) Australian Business Law 2012. CCH Australia Limited.

Adams v Lindsell (1818) 1 B & Ald 681.

Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153.

Carlill v Carbolic Smoke Ball Co. Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.

Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523.

Felthouse v Bindley (1862) EWHC CP J 35.

Latec Finance Ltd v Knight (1969) 2 N.S.W.R. 79, N.S.W

Smith v Hughes [1871] LR 6 QB 597.

Stevenson, Jaques, & Co v McLean [1880] 5 QBD 346.

Choi SJ, Gulati M, Posner EA. retirement resignation letter on law: An empirical study. The Journal of Legal Studies. 2013 Jan 1;42(1):111-50.