The Concept of Acceptance Law - Coursework Example

Running head: LAW. Acceptance law. By Lecturer Acceptance law An offer is a promise which is capable of acceptance, bound on particular terms. The person who makes the offer is an offeror and the one who receives it is known as the offeree (Fried, 1981). There are essential requirements before the two can make an agreement and the first is a clear approach between the two. For this reason an advertisement cannot be termed as an offer but as an invitation to treat. An invitation to treat is merely an announcement to other persons that the offeror is ready to entertain offers for certain services or things. An invitation to treat carries minimal terms for others to make offers (Furmston, 2006). An invitation to treat does not bind the person extending it to accept any offers made to them. It cannot be treated as a binding contract but as an initial stage which the offeror invites interested parties to make an offer as illustrated in Gibson vs. Manchester City Council (1979). In this case Mr. Gibson claimed that the letter sent to him by the city council with the purchase price on it was an offer and his letter to the city council on the 18th March was an acceptance to the offer of the house. The House of Lords ruled that the city council had not made an offer, that the letter was an initial stage in the negotiations for a contract. This meant that this was an invitation to treat, inviting the tenant to make an application to the offer and simply not an offer (Fried, 1981). Here it is important to determine whether the advertisement placed in the gym’s notice board was an offer or an invitation to treat. Bulging muscles Ltd placed the advertisement on the notice board stating a payable fee of fifty pounds to any member who introduced a new member who buys a yearly membership. The advert is certainly an invitation to treat by the gym, capable of leading to a contract and once it is accepted it becomes legally a contract. Here the advertisement requires the ‘finding’ as the action which leads to a reward within a limited period of time. The law finds a contract binding if there is intention, an offer, acceptance and consideration (Stone, 2005) (Furmston, 2006). An offer is the willingness to be bound by the terms of the offeror should the one offering accept. An advertisement such as in Jane’s case does not fall in the offer category because the gym was merely declaring an intention to reward and did not state the capability of acceptance. A statement of intention is legally an invitation to treat as seen in the case of Partridge V Crittenden 1968. Partridge was charged for ‘offering’ wild birds for sale but did not state in the advert ‘offer for sale’. He sold the wild bird to Crittenden regardless of the Protection of Birds Act 1954. Partridge was charged and convicted but set free on appeal once the advertisement was proved to be an invitation to treat and not an offer (Furmston, 2006). In Jane’s case for acceptance interested parties were required to fill a card at the reception and post the card to Bulging muscles Ltd headquarters before 21st of May. In order to be valid the acceptance of an offer must reach the offeror within the time fixed by it. The act of acceptance is the act performed by the offeree where a binding contract is then created. The acceptance must however be communicated to the offeror either expressly or by conduct (Austen, 2006). Any mode of communication can be applied except where the mode of communication is specified. When specified it must be precisely complied with otherwise the acceptance will not be effective. The decision in Carlill V Carbolic Smoke Ball shows the importance of communication where the Carbolic placed advertisements on different newspapers offering 100 pounds to anyone who used the smoke balls three times a day as directed and contracted influenza, colds or any other disease. Carlill purchased the balls and used them as directed on contracting influenza he claimed for the reward, Carbolic refused to pay and Carlill sued. The company argued in the court of appeal that no contract had resulted between the user and the company. There had also been no communication of acceptance of the offer (Fried, 1981). Acceptance must be communicated by the offeree to the offeror. Jane posted the card on the 15th April and the advertisement’s deadline was 21st April. The post office rule applies only to communication of acceptance and not communication to offers. This rule was created in the pre-telecommunications to make communication easy. The rule generally states that a contract is not completed until acceptance of an offer is actually communicated to the offeror and a finding that the contract is completed by posting of a letter cannot be justified unless it is inferred that the offeror contemplated and intended that his offer might be accepted by the doing of the act (Stone, 2005). In the case of Nunin Holding Pty V Tullamarine Estates Pty Ltd (1994), Nunin made an offer and sent a counter copy contract of sale to the vendor signed by the purchaser. The letter said there would be a contract upon receipt of the identical contract signed by the seller company. The vendor’s solicitors then sent the contract signed by the vendor but later called the purchaser to revoke the acceptance. The purchaser sued claiming that the contract was concluded (Furmston, 2006). The court allowed that the post office rule could operate by silence. According to them the reference in the letter of offer showed an intention that the contract could not be made until the offeror had actually received it (Furmston, 2006). A person making an offer following which the offeree mails an acceptance, cannot terminate this offer after the date of posting but after receipt of the letter. This is because acceptance by posting has created a binding contract. There are main issues to consider in Jane’s case where she commits herself silently to find a person willing to buy a year’s membership. Here Jane finds James who first takes a month’s membership no longer making him a new member before he signs for a year’s membership afterwards. Jane’s acceptance according to the offeror was late hence making it ineffective. Jane in this case to make her case should endeavor to find out the date the offeror received her acceptance considering 21st April was the last day for an acceptance. By law if the offeree has sent its acceptance on time. The offeror however only has this duty if the acceptance shows that it was sent in time and that it arrived late due to unexpected delay in transmission (Austen, 2006). There is a basic rule apart from offer and acceptance where the court considers the intention to create legal relations. If the contract is commercial in nature then the court presumes that it is intended to be legally binding. In domestic agreements there is the presumption that there is no intention to create legal relations. In the case where Bulging muscle claims the offer was for new members and sites that James cannot be termed as a new member falls under silence acceptance. Silence cannot be constituted as acceptance by law. The offeror cannot be compelled to reward Jane fifty pounds if she did not communicate to the Bulging muscle Ltd of her acceptance. There needs to be communication before the performance of the offeror’s act. In this situation James joined the gym in April and paid for one month subscription and went ahead to pay for the years membership on 1st May. Jane sent her acceptance on May 15th. Here Jane cannot argue very well that a contract was formed between her and Bulge Muscle Ltd. The general rule that presumes the intention of commercial agreements creating legal relations is exempted in cases of advertising. This is with reason to protect advertisers who sometimes have no intention to create legal relations. The exact words used by advertiser cannot legal bind them as seen in the Carlill V Carbolic Smoke Ball (1893) case. Advertisements are viewed in light of overblown marketing so as to capture the audience attention (Stone, 2005). The Esso v Customs and Excise (1976) case however, saw the court rebut the presumption of intention. Esso had organized a promotion for the 1970 World Cup. A purchaser of 4 gallons of petrol was entitled to a free World Cup coin. The tax revenue board sought to recover tax on the free coins claiming they had been produced on general sales. On filing the court decided that there was intention to create legal relations (Fried, 1981). In order to advise Jane it is necessary to consider three things; the status of the advertisement, the date the offeror received the acceptance and the intention to create legal relations. In this case there are no implications unless Jane can prove that Bulging muscle Ltd had the intentions to create legal relations. Secondly the company will be required to pay her the fifty pounds if she can prove the company received her letter before April 21st. For an advertisement to be considered as an offer it has to be very specific and detailed meaning If Jane can prove the advertisement placed by the gym falls under this the gym is under obligations to enter into binding agreement. References Austen, B. 2006. ‘Offeree Silence and Contractual Agreement’. Common Law World Review, New York. Fried, L. 1981. Contract as Promise: A Theory of Contractual Obligations. Harvard University Press, London. Furmston, S. 2006.Cheshire, Fifoot and Furmston’s Law of Contract, 15th Ed. Oxford University Press, Hampshire Stone, R. 2005. Contract law, 6th Ed. Cavendish publishing, London Read More