Contract Law Assignment: Case Analysis Of Nandini Electro Pty Ltd
On 1 August, Nandini, who owns an electrical appliance store, Nandini Electro Pty Ltd, places an advertisement in the newspaper which states:
“Huge Electronics Sale. All Computers 50% off”
Visit our web site and see the large range of goods we carry.”
On 2 August, Angelo reads the advertisement and visits the web site. He sees a picture of a Apple Model Number 5 Computer and clicks on the picture. Angelo is linked to a page which has all the details on this computer. At the bottom of the page are words “Contact Us” and the store’s email address.
That afternoon Angelo sends the following email to the store: “What is the price of the Apple Model Number 5 computer? How many models of this computer do you have in stock?
Within 1 hour, Nandini replies to Angelo by email, saying:
“We have five Apple Model Number 5 computers in stock. Our retail price is $2,000 and the sale is price is $1,000.”
Angelo telephones several other computer stores to check their prices and discovers Nandini’s price is very cheap. Angelo decides to buy this computer from Nandini Electro Pty Ltd.
On 3 August Angelo telephones Nandini’s store and asks if this model computer is still on sale.
Nandini, who answers the phone, replies: “Yes, I can see one on the shelf right now, it is sale priced at $1,000.”
Angelo says: “Great, I will buy it. My name is Angelo and I will come and pick it up immediately.”
Nandini replies: “See you soon, Angelo.”
Angelo takes a taxi to Nandini’s store. When Angelo walks into the store, Angelo sees one the advertised computer he wants on the display shelf with price tag saying “Sale Price $1,000.” Angelo says to Nandini: “I just telephoned you about buying this computer for $1,000. I am here to pay for it and take it home.
Nandini replies: “I’m sorry, I have changed my mind. This is the last Apple Model Number 5 computer I have in stock and I have decided to give it to my brother, Raju, as a wedding present for his wedding tomorrow.”
Consider the above scenario and prepare a report on contract law assignment answering the points below:
(a) Advice Angelo what legal rights he has under the common law of contract in respect of the computer that he wished to purchase. Your answer must include relevant legal principles and relevant case law to support your answer.
(b) Assume the computer is still available for sale but Nandini says to Angelo she has changed her mind about the price and that it is now for sale for $1, 800. Analyse whether Nandini has acted in breach of a relevant statute law studied in this course. Your answer must identify the relevant statute and section(s) together with a discussion on its relevance to the given facts.
I. Whether Angelo can claim legal rights upon the computer under the common law of contract?
II. By changing the price of the sale price of the computer, whether Nandini has violated any of the relevant statutory provisions?
There are several laws that are part of every country. The two major law division in which the legal sector of every country is generally divided is into civil law and criminal law. The civil law is the law which aims at dealing with the wrongful acts of the private individuals. One of the major civil law that is very important is applicable like a common law in every country of the world is the law of contract. It is one of the most crucial kind of civil law that is availed by almost all the people of the world considering no two persons can get into any trade relationship unless and until there is a contract amid them, either oral or written.
No contract can be made and no provisions of the contract law is applicable on any contract unless and until there is a valid enforceable contract established by the parties. In order to make any enforceable contract there are few elements which must be comply with the parties to the contract. The elements are agreement which comprise of an offer along with an acceptance, consideration, party’s intention and their capacity to enter into contract.
An agreement is the prior elements for the formation of any legal contract and to make it enforceable.
When an offeror tries to communicate his intention which he wishes to be obeyed by any specific person, group or class, then he can do so either orally, by conduct or in written form and this transmission of the intention by the offeror is called an offer in law. In the leading case of Carlill v Carbolic Smoke Ball Company the court held that an advertisement was displayed and an offer was made to the specific class of persons and the offer is then intended for such class only and no one else,. In the leading case of Brinkibon v Stahag Stahl und StahlwarenhandelsgessellschaftmbH , it was also highlighted that when the offer is made it is very necessary that the same must be communicated to the offeree. If the offer is not communicated then there cannot be any valid offer in law.
The next requirement in order to make an agreement under the law of contract is the presence of acceptance. When the offeror provides with the offer and when the same reaches the offeree, then, the approval or the confirmation to the terms of the offer like the mirror image is called the acceptance of the offer. In the leading case of Hyde v Wrench , it was rightly held that when the acceptance is given, then, the terms of the acceptance should not vary the terms of the offer.
Also, whenever an acceptance is given, then, by applying the law in Felthouse v Bindley it is clear that the acceptance must be very clear and unambiguous. If the terms of the acceptance are not clear and are confusing in nature then the same cannot be construed as an acceptance and thus there will no agreement that can be established amid the parties.
Further, in the leading case of Stevenson, Jaques, & Co v McLean , it was also submitted that when the statements of inquiry or query is made, then, it is not a counter offer neither an acceptance, rather, the same will not hamper the sanctity of the offer in any manner whatsoever.
But, when offers are not made and the intention is to seek offers, then, it is called an invitation to treat. An invitation can be made in various ways, that is through display of goods or by advertisements or by auctions or through tenders, etc. but, whatever may be the criteria, the interested person must make an offer to the inviter and the inviter who acts like an offeree is at the liberty to approve of the offer or not and when the same is approved, then, it is an acceptance and there is the formation of agreement between the parties. In the leading case of Partridge v Crittenden , the advertisement was not treated as an offer but it was construed that it is an invitation to make offers and people relying on the advertisement must make an offer.
However, when there is a valid offer and acceptance that is made amid the parties, then, there is an agreement that is established between the parties to the contract. However, apart from the presence of agreement there are few other elements which must also be present in order to make a valid contract in law.
There should be valid consideration that must be present amid the parties, consideration is some benefit or detriment which is exchanged amid the parties in order to support the promises that are made amid the parties, that is, the offeror and the offeree. When a consideration is made then the agreement that is made amid the parties become enforceable in law. in the leading case ofCurrie v Misa , the importance of consideration is discussed.
Also, the parties who are making the offers and the acceptance must be such which are legally capable to do so. The parties are capable when they are not forbidden by law or are minors or are of unsound mind. In the leading case of Nash v Inman , the parties’capacity to enter into contract is discussed.
Also, the parties to the contract must have intention to make a contractual relationship amid themselves. If the parties do not have any legal intention to make themselves binding under law then there is no contractual intention and thu8s there will be no contract between the parties. In the leading caseBalfour v Balfour , it was held that parties in domestic relationships generally do not intent to make a contractual relationship unless otherwise proved.
Application of Law
As per the given facts, Nandini is the owner of Nandini Electro Pty Ltd, an electrical gadget shop. On 1st August she placed an advertisement in the newspaper. As per the advertisement, Nandini specifies that there is a huge electronic sale and all the computers are available @50% off. She further submitted that any person who is interested must visit the website and can survey the numerous amounts of products that are available.
Now, as analysed, there are two terms which are very different from each other under the context of law of contract, that is, an offer and an invitation to offer. In the given context the advertisement that is displayed by Nandini in the Newspaper is nothing but aninvitation to treat. By applying the law in Partridge v Crittenden it was found that an advertisement is generally an invitation to law. Thus, the advertisement that is displayed by Nandini is an invitation to treat and any person who is interested in the invitation that is given by Nandini has an option to come forwards and make an offer to Nandini and Nandini will be in the position to act like an offeree and thus has the power to either accept the offer or reject the offer.
Now, on 2nd August, the advertisement was read by Angelo. He visits the website of the company as instructed in the advertisement. While scrolling the various product he sees the ‘Apple Model Number 5 Computer’ and liked the same very much. All the information with respect to the computer was displayed and at the bottom of the page there is contact information that was provided along with the email address of the store.
On the afternoon of 2nd August, Angelo sends an email to the store which was duly received by Nandini. He wrote and enquired about the price of the ‘Apple Model Number 5 Computer’. He further enquired regarding the amount of computers of the same model is there in the stock. Now, as perPartridge v Crittenden the advertisement by Nandini is an invitation and thus Angelo is acting like an offeror. So, he must make an offer to Nandini which if accepted by Nandini will result in the formation of an agreement.
However, the email that was sent by Angelo to Nandini on 2nd August is not an email construing offer. But, by applying the law in Stevenson, Jaques, & Co v McLean it is submitted that the email is nothing but the statements of queries that was sent by Angelo to Nandini. So, there was no offer that was made by Angelo to Nandini when the mail was sent on 2nd August.
Now, what was received by Nandini through the email of Angelo are just some queries. So, within one hour of receiving the email, Nandini replied to Angelo that there are five ‘Apple Model Number 5 Computer’ which are present in stock and that the retail price pf the computer is $2,000 and as per the discount available, the sale price of the computer is $1,000.
Now, the email that is sent by Nandini to Angelo is nothing but the reply that is sent against the mail that is received by Nandini from Angelo. The reply is nothing but the resolution of the query that is raised by Angelo. Thus, as perStevenson, Jaques, & Co v McLean those are the statements of information and nothing else and thus does not land within the preview of an offer or an acceptance.
After receiving the email from Nandini, Angelo makes calls to various computer stores and finds out that the price that is offered by Nandini is very cheap and thus he decides to purchase the computers from the store of Nandini only. In order to so, he called Nandini on 3rd August and again enquires that whether ‘Apple Model Number 5 Computer’ is still available on sale. Now, again as perStevenson, Jaques, & Co v McLean the statement that is made by Angelo is an enquiry and thus no offer is made. Against the query of Angelo, Nandini replied in affirmative and submitted that there is one computer that she can see on the shelf with the price of $1000.
Against the statement made by Nandini, Angelo submitted that he is willing to buy the ‘Apple Model Number 5 Computer’. He further stated his name and submitted that he is willing to buy the same and thus he is coming immediately to buy the same. Now, there is an offer that is made by Angelo to Nandini. Now, the offeror in the given position is now Angelo. Now, Nandini has to act like an offeree and she can now accept the offer or reject the offer so made by Angelo.
However, Nandini did not say anything which implies that there is acceptance of the offer that is made by her. By applying the law in Felthouse v Bindleyit is submitted that the acceptance that is made by the offeree must be clear and unambiguous. However. Nandini simply states that she will see Angelo soon, however, there is nothing which can portray that there is an acceptance that is given by Nandini to the offer made by Angelo.
Thus, there is no acceptance that is made by Nandini. So, till now, there is no acceptance and thus there is no kind of agreement that is made amid the parties.
Then, Angelo visits the store of Nandini. He saw that computer that he wishes to purchase at the display shelf of the store with the price of $1,000. He submitted to Nandini that he had come to pick up the computer for $1,000 as the same was bought by him through telephone. It is submitted that when there is a telephonic conversation amid the parties, then, an offer was made by Angelo which was not accepted by Nandini. Thus, there was no agreement that was established amid the parties.
Thus, Nandini is not obligated to sell the computer to Angelo and thus she has every right to change her mind and thus has every right to deny the sale of computer to Angela.
If it is now assumed that the computer is still available for the sale but now, Nandini again submits to Angelo that the price of the computer is not $1,000, but, the price of the computer is now $1,800, then, in such situation, Nandini has not acted in any kind of violation. This is because, the change in the price of the computer from $1000 to $1800 is done before any kind of acceptance is made by Nandini to Angelo.
Angelo has made an offer for the price of $1000. However, there was no acceptance that was given by Nandini, rather, she has made a counter offer and raise the price of the computer from $1000 to $1800, thus, by, apply Hyde v Wrench any counter offer has the capacity to revoke all the previous offer so made by the offeror.’
Thus, the new offer that is now made by Nandini is that the computer isnow available for slae at the price of $1800. This offer is independent from the amount that is mentioned ion the advertisement as this is altogether a new kind of offer that is made by Nandini to Angelo. It is a counter offer that is made to the offer of Angelo and thus the only offer now stands is the new offer that is made by Nandini, that is, the selling price of the computer is now $1800.
Now, if Angelo us willing to purchase the computer at the new offer prize of $1800, then, he has every right to accept the offer without bringing any kind of deviation to the terms of the offer. By applying the law in Hyde v Wrench if the counter offer is accepted by Angelo, then, it is an acceptance as per law.
So, there will be a valid offer and acceptance exchange amid the parties. Thus, there is no kind of violation of breach that is made by Nandini by raising the prize of the computer from $1000 to $1800
It is concluded in the end that in order to make a valid contract there is a need of an agreement along with other contract essentials. It is thus submitted that the first two important ingredients that are required to make an agreement, that is, offer and acceptance are not present., an offer was made by Angela but the same was not accepted by Nandini at any point of time. Thus, there is no contractual relationship that is established amid the parties and Nandini has every right to deny the sale of ‘Apple Model Number 5 Computer’ to Angelo.
Further it is submitted that Nandini has not violated any kind of provisions of the law of contract when she raised the prize of the computer from $1000 to $1800. The raise is made by Nandini before making any kind of acceptance to the offer of Angela. It is nothing but a kind of counter offer that is made by Nandini against the offer of Angela and thus revoking the offer of Angela. ?
Books/Articles/Journals Collins, H. 2003. The Law of contract.
Paul Latimer. 2012. Australian Business Law. Walters Kluwer Business. Case laws Balfour v Balfour  2 KB 571 Currie v Misa (1875) LR 10 Ex 153.
Carlill v Carbolic Smoke Ball Company  EWCA Civ 1.
Brinkibon v Stahag Stahl und StahlwarenhandelsgessellschaftmbH  2 AC 34. Hyde v Wrench  EWHC ChJ90 .
Felthouse v Bindley (1862) 142 ER 1037.
Stevenson, Jaques, & Co v McLean  5 QBD 346 Partridge v Crittenden  2 All ER 421.
Nash v Inman  2 KB 1.