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Law Assignment: Analyses Of Marketing Invitation To Treat Offer

Question

Task: This is a problem-solving assignment. You must address all 3 parts of the assignment question.

PART A: Heidi has been the assistant store manager of a highly successful coffee chain, Caffeine Stop Pty Ltd. Having worked at the coffee shop for the past four years, she has decided that it is time to start her own coffee shop. Her idea is create a place that is relaxed and vibrant, providing her customers with high quality coffee and delectable breakfast snacks such as parties and cakes. She forms a company, Roast the Day Away Pty Ltd.

Heidi’s first task is to procure a coffee machine. She drives to her local industrial area where she knows several coffee suppliers have factory outlets. As she drives down the main road, Heidi notices an advertisement placed in front of Machine Express Pty Ltd. The advertisement reads:

“The NewBean Coffee Machine has arrived in store! To celebrate you can purchase your NewBean Coffee Machine at half price. We have boxes and boxes so come in and get yours.”

Heidi immediately stops the car and rushes in to the store. She approaches the assistant manager and says, “I would like my half price coffee machine.” The assistant manager sighs and regretfully replies, “I’m sorry. That deal is no longer being offered. The coffee machines were selling too fast.”

Heidi is completely shocked by this and demands that she receive her half price NewBean Coffee Machine as advertised. “The sign outside is an offer and you are obliged by it,” she informs the manager. The manager shakes his head, “The sign is just an advertisement. We are not legally obliged by it.”

Heidi is very disappointed by the situation and feels that Machine Express Pty Ltd should take responsibility.

The manager sees Heidi’s disappointment and quickly provides a solution. “We do have the premium model of the NewBean Coffee Machine at 20% off today.”

Heidi really needs to the coffee machine and so decides to forget the half price standard NewBean coffee machine. She looks at the premium model of the NewBean Coffee Machine and is impressed with its size and capabilities. The price, however, is not so impressive. Heidi inquires whether the manager can do anything further with the price to which the manager replies, “Not on a brand new machine, however I can offer you the white floor stock machine at a further 10% off.”

Heidi is very keen on the idea, however the premium model of the NewBean is significantly larger than the standard model she had planned on buying. She tells the assistant manager that she will need to go and measure the space in her shop to make sure the machine fits. The assistant manager replies, “of course. The offer is open all day.”

Heidi leaves Machine Express Pty Ltd and goes straight back to her store to measure the space. Seeing that the machine would fit perfectly, she quickly stops for lunch and then rushes back to Machine Express Pty Ltd. To her dismay, as she is walking in, she sees another customer carrying out the white premium model NewBean. When the manager sees her, he immediately says, “You should have been faster. I couldn’t wait for you when the machine may not have fitted your store. I sold the machine a couple of minuted ago.”

Heidi is absolutely appalled and wants to take legal action. She wants advice on the following:

  • Whether the advertisement for half price NewBean Coffee Machine is an offer or an invitation to treat
  • Whether she has a claim against the manager for selling the premium NewBean coffee machine to another customer

PART B: Heidi arrives late for her last shift at Caffeine Stop Pty Ltd. She has been very open and honest with the store manager, Gertrude, about her hopes to open her own coffee shop and while discussing her resignation over coffee two weeks ago, the manager was very supportive.

When Heidi comes into the store and grabs her apron angrily, Gertrude is concerned. Heidi recounts the events of the morning with the two coffee machines and her annoyance at Machine Express Pty Ltd. Gertrude listens and while handing Heidi a tray with three coffees for the back table, says, “Don’t worry about it at all. You can have one of our retiring machines at a great price. It is at least something to start off with.”

Heidi is pleased by this offer and quickly accepts, thinking how much easier opening the store will be when she has a machine is already familiar with. She tells Gertrude she will bring in the money next week.

However, when Heidi arrives the next week Gertrude has had a change of heart. Gertrude explains that she would like to see how much she can get for the machine online before making any concrete decisions.

Heidi is running out of time and was relying on the machine that Gertrude had promised. She would like to know whether a contract exists between Gertrude and herself.

PART C: Worrying that she will not have a coffee machine for her grand opening, Heidi orders the GreenBean Coffee Machine from Coffee Supplies Fast Pty Ltd, a company specialising in fast coffee supply deliveries. The machine arrives just in time for Heidi to hang the open sign on her door.

The first few coffees that the GreenBean makes are very good and customers seem really happy. However after one hour, the machine gets very hot and the coffee that comes out tastes burnt and smoked. Heidi is forced to stop making and selling any form of coffee. The only goods she has left to sell are pastries and cakes. However none of her customers are interested in the snacks without a coffee. Heidi has lost all her profits for the first day of the store being open. She quickly calls around until she finds a coffee machine supplier who has the NewBean Coffee Machine in stock. While it is not on sale, Heidi knows it is reliable. She does not open Roast the Day Away again until the NewBean arrives one week later. She has lost significant profits because of the the faulty GreenBean.

Further, one of Heidi’s main investors, Tate, comes by Roast the Day Away on day three of the store being closed. Seeing the store closed, the investor calls Heidi and informs her that he will be withdrawing his investment in her store.

Further, one of Heidi’s main investors, Tate, comes by Roast the Day Away on day three of the store being closed. Seeing the store closed, the investor calls Heidi and informs her that he will be withdrawing his investment in her store.

Answer

PART A
Issue

  1. Evaluate the distinction amid an offer and invitation to treat with respect to the advertisement for half price New Bean Coffee Machine is an offer or an invitation to treat?
  2. Evaluate the position of manager and Heidi. Can Heidi sue for selling the New Bean coffee machine to another customer and not Heidi?

Applicable law
In Australia one of the common law prevalent is contract law. It is first important to understand the meaning of offer.

Offer: At times, certain statement/proposal are transferred to an offeree by an offeror and it was specified therein that the terms of proposal should be confirmed and this act is an offer in law. An offer can be made to an individual, to group or to an entire world and is held in Carlill v Carbolic Smoke Ball Company 1 2.

It is now important to evaluate the concept of Invitation.

Invitation to Treat: But, when the offers are not made but are invited then such acts are called invitation to treats. In Partridge v Crittenden3 an advertisement was legally held to be an invitation and the inviter must receive offers from the interested parties which if confirmed by inviter results in the formation of agreement.

Now, the second element is an acceptance.

Acceptance : It is a kind of affirmation which is made by the offeree to the offer terms and the affirmation is bought without bringing any deviations. It is necessary that the affirmation should be communicated to an offeror and is held in Felthouse v Bindley4 .

Options: Those offers which can be affirmed in certain time length are called options. Now, the choice is on the offeree to affirm the option or not but the affirmation must be within the time length However, the offeror is not compelled to sell the product to the offeree only and such offers can be revoked without informing the offeree and selling the product to someone else and is held in Dickinson v Dodds5 . Such offers are only liable to be hold provided some consideration is provided by the offeree and is held in Goldsbrough Mort v Quinn6 7 .

Application of Law
It is discussed in this Law Assignment Caffeine Stop Pty Ltd is a coffee chain and Heidi is its assistant store manager. She intends to start her own coffee shop and thus forms a company, Roast the Day Away Pty Ltd. she now intends to but a coffee machine.

Issue 1: Heidi saw an advertisement on the road wherein Machine Express Pty Ltd has displayed an advertisement which states that a new Bean coffee machine can be purchased at half a price and that the stock is abundant.

It is submitted that an advertisement in the leading case of Partridge v Crittenden was considered to be an invitation to treat. It is an obligation on Heidi thus to make an offer to Machine Express Pty Ltd to purchase the coffee machine at half the price.

So, when Heidi enters the store then it is necessary that she must make an offer. However, she demands her half price coffee machine considering that a contract is made.

But, there is no contract as the assistant manager declined her expectations.

Thus, the advertisement by Machine Express Pty Ltd is an invitation and not an offer.

Issue 2: The issue 2 given in this Law Assignment mentions that Heidi was disappointed as the manager has considered the advertisement as an invitation. However, later the manager submitted that they have a premium model of the new bean coffee machine and which can be availed by Heidi at 20% off today. The manager also offered a white floor stock machine at a further 10% off.

Thus, the manager has made an offer to Heidi and it is now up to Heidi to accept the offer of the manager or not.

However, instead of accepting the offer she demands time. The manager affirms that the offer is open for the day. As per Dickinson v Dodds the offers which can be accepted in a certain time frame are options. However the manager is not bound to abide to keep the offer open for Heidi as no consideration is moved from Heidi. Thus, as per Goldsbrough Mort v Quinn since no consideration is provided by Heidi, then, the manager has the option to revoke the offer any time.

The manager sold the machine. Thus, Heidi cannot take any action against the manager as the option so made by the manager was never accepted by Heidi nor the same was supported with any kind of consideration.

Conclusion
It is concluded in this Law Assignment that Heidi cannot ask for coffee machine at half price as the advertisement so made was an invitation and not an offer. Further, Heidi cannot bring any claim against the manager for selling the machine as the option given by the manager was never accepted by Heidi.

PART B
Issue: Whether there exists a contract amid Gertrude and Heidi?

Applicable law
Contract: Two private parties has power to bring themselves into contractual obligations by forming a contract. An offer and acceptance together results in the formation of a valid contract. At times, certain statement/proposal are transferred to an offeree by an offeror and it was specified therein that the terms of proposal should be confirmed and this act is an offer in law and is held in Carlill v Carbolic Smoke Ball Company.

Acceptance: It is a kind of affirmation which is made by the offeree to the offer terms and the affirmation is bought without bringing any deviations and is held in Felthouse v Bindley. However, mere quotation or providing with some information cannot be regarded as a non acceptance and is considered to be valid as per Stevenson Jaques & Co v McLean8 .

Also, at times people in friendly relationship are presumed to have no legal intention to abide by offer and acceptance and is held in Balfour v Balfour . Also, in commercial relationship the intention is expected to be present and is held in Esso Petroleum Ltd v Commissioners of Customs and Excise But, the presumption is rebuttal and the parties can have legal intention to abide by the contract even if the parties are sharing friendly and cordial relationship.

Application of Law
As per the facts discussed in this Law Assignment, Heidi reached late at Caffeine Stop Pty Ltd. Heidi intends to resign from the shop and the manager, Gertrude, was very supportive. He even offered one of his retiring machines at a great price.

It is submitted that a valid offer was made by Gertrude as the same was made orally by him to Heidi and the same comes in the knowledge of Heidi and is thus valid as per Carlill v Carbolic Smoke Ball Company.

Heidi was very happy with the offer and quickly accepts the offer. She submits that she will bring the money next week.

It is submitted that the offer which was made by Gertrude was a valid offer and the same was accepted by Heidi as the same was communicated by her directly.

As per Stevenson Jaques & Co v McLean the submission of money next week is not a counter offer that is made by Heidi, rather, it is just the manner in which Heidi is willing to pay money. The statements of Heidi are not a counter offer and thus the acceptance is valid amid the parties.

Further, when the offer is made by Gertrude and when the same is accepted by Heidi, then, bit intend to abide by the contract as a price is quoted by Gertrude and the same is accepted to be paid in the week time by Heidi. Thus, though Gertrude and Heidi are in friendly relationship, but, still they have legal intention to abide by the contract.

Conclusion
It is thus concluded in this Law Assignment that the valid offer was made orally by Gertrude and the same was immediately accepted by Heidi orally and thus there is a valid contract amid the parties. It is concluded in this Law Assignment that the payment of money next week does not alter the status of the acceptance and thus there is a valid contract amid the parties. Also, the offer and acceptance that is made by Gertrude and Heidi are made with the legal intention to be abide by.

PART C
Issue: What damages would Heidi can claim from Coffee Supplies Fast Pty Ltd for all the losses that she has incurred?

Applicable law
Contract: When any contract is established amid the parties then the parties to the contract has an obligation to comply with the terms of the contract. When any party to the contract does not comply with the terms of the contract, then, the contract is considered to be violated.

Consequences of Breach: The aggrieved party then has the option to sue the breaching party for damages and for the loss that is suffered by the aggrieved party. The main kinds of damages that can be attained by the aggrieved party include:11

Compensatory damages: These are the foremost damages that can be attained by an aggrieved party. These are those damages which are part of the written contract amid the parties. These are pre decided damages which must be paid by the defaulting party to the aggrieved party.

Restitution: Restitution can also be sought by the aggrieved party wherein the breaching party has pay back the cost that is incurred by the aggrieved party.

Liquidated Damages: Liquidated damages are those damages which are to be paid by the defaulting party on the incurrence of the breach.

Punitive Damages: Punitive damages are those damages which are paid to the aggrieved party in order to punish the defaulter.

Application of Law
As per the facts, Heidi in order to have a coffee machine orders a Green Bean Coffee Machine from Coffee Supplies Fast Pty Ltd. Coffee Supplies Fast Pty Ltd is pro in super supply of coffee deliveries.

The coffee machine was delivered on time. Initially the coffees were really goods but after 1 hour, the coffee that was coming out was very hot, burnt and taste smoky. Because of which Heidi is not able to sell the coffee. Thus, she was only able to sold cakes and pastries but the demand of the same was also no there because of non presence of coffee. Heidi lost all her profits.

She again orders a New Bean Coffee Machine which arrived after a week.

Also, one of the main investors of Heidi, Tate, comes on the third day of the closure of the store of Heidi. He later called Heidi and told him that she is not interested in the investment in the store any more.

It is now submitted that Heidi can sought –

  1. All those damages that are part of contract that was established amid Heidi and Coffee Supplies Fast Pty Ltd. the damages that were promised by Coffee Supplies Fast Pty Ltd to be paid to Heidi if the coffee machine that is sold by Coffee Supplies Fast Pty Ltd is found to be faulty;
  2. Heidi can also demand the restitution of her money that is spent by her on the purchase of the coffee machine.
  3. Heidi can sought damages of the loss of profit that is faced by her because of the closure of her business for a week because of the faulty machine that is provided by Coffee Supplies Fast Pty Ltd to Heidi.
  4. Punitive damages can also be paid for the harassment and torture that is faced by Heidi.

However, the loss of investor cannot be claimed by Heidi as the damage is too remote to anticipate.

Conclusion
It is concluded in this Law Assignment Heidi can sue Coffee Supplies Fast Pty Ltd for the liquidated damages which are decided by the parties as per the terms of the contract. Also, punitive damages can also be sought to punish Coffee Supplies Fast Pty Ltd. But, the loss that is suffered by Heidi for the loss of investment in her business is too remote and thus cannot be claimed by her from Coffee Supplies Fast Pty Ltd. Law assignments are being prepared by our law assignment help experts from top universities which let us to provide you a reliable urgent assignment help service.

Reference List
McKendrick, E, Contract Law: Text, Cases, and Materials. 2012. OUP Oxford. Peel, E and Treitel, G.H., The Law of Contract. Sweet & Maxwell.

Vermeesch, R. B. and Lindgren, Kevin E. Business Law of Australia, 2001, Butterworths Australia.

Balfour v Balfour [1919] 2 KB 571.

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

Esso Petroleum Ltd v Commissioners of Customs and Excise [1976] 1 WLR.

Stevenson Jaques & Co v McLean (1880) 5 QBD 345

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