Business Law: Donoghue v. Stevenson - Essay Example

?Business Law The problem in this question relates to offer, unilateral offer, invitation to treat, acceptance, rejection of offer and past consideration. These would be discussed in line with the facts and determination of conclusion of the issues would be made in accordance with that. The important aspect in respect of the question is that of the differentiation between an offer and invitation to treat. This has been drawn by the courts. Invitation to treat is an expression of willingness of one party to go into into negotiations with another party anticipating that a contract would be concluded at the end of such negotiations. Items on shop display and their prices are treated as an invitation to treat (Fisher v Bell). Advertisements are generally treated as invitation to treat (Harris v. Nickerson ). There are certain exceptions to this the reasoning based on intention and certainty. (Carlill v Carbolic Smoke Ball Co, a case on unilateral offer.)1. An offer on the other hand has been defined as an unequivocal willingness by a party known as the offeror to enter into a contract on stated terms and provided that such terms would be accepted by the person to whom the offer is made (offeree) a contract would come into existence. Acceptance has been defined as the unconditional acquiesce to the terms that were laid down by the offeror. The important aspects of acceptance are that it should be unconditional and must be communicated to the. ( Holwell Securities v. Hughes2) . A number of exceptions have developed in respect of communication, one of them being the postal rule, whereby acceptance takes place as soon as a letter is posted. As far as instantaneous means of communication is concerned it can be said that the postal rule in Adams v. Lindsell3 of acceptance is not applicable and thus actual communication of acceptance needs to be done (Mondial Shipping and Chartering BV v. Astarte Shipping Ltd4). As far as silence constituting to be acceptance is concerned, the courts have been consistent in their approach that silence would not constitute as acceptance and acceptance needs to be communicated or can occur by way of conduct. (Felthouse v. Bendley)5 . The advertisement that was placed cannot be classified as a unilateral offer as the facts do not show the requisite certainty and unconditional offer, thus it is evident that the advertisement is an invitation to treat. The discussion with Rose was merely an invitation to treat as there was hope of a contract being concluded and at no point can it be seen that an offer been made, so there can be no acceptance. In line with the discussion with Mary, the offer of Rose was made and communicated to Mary, however, the problem lies in the fact that even though there Mary responded and accepted the offer, it was never communicated to Rose and so in line with authorities on instantaneous communication it can be concluded that acceptance did not take place and so no action can be brought about by Rose. As far as Matthew is concerned, the problem lies in the fact that it was conditional on the fact that Matthew would receive payment and therefore a conditional offer, or in other words it was not a conclusive offer which could be accepted. Applying the approach of courts in respect of silence and that it would not constitute to be acceptance; the actions of John cannot in any way create a binding contract. Furthermore, there has been no actions or conduct which show acceptance, on the contrary Mary destroyed the cheque which shows her intention of not being bound. The next issue is in respect of consideration, which is that it must generally be given after promise so as to make it enforceable. Thus a promise made after alleged consideration is complete is unenforceable (Re Mcardle)6. Thus past consideration is generally held not to be good consideration. However, the courts in Pao On v. Lau Yiu Long whereby Lord Scarman laid down the three condition which were to be satisfied if the exceptions were to be relied upon, the first being that the act which was done must have been done at the request of the promisor; secondly the parties had understood that the work was to be paid for in one way or the other, which could have been by way of money or other benefit; finally the promise would be legally enforceable had it been made prior to the acts which constituted consideration. The most difficult of the condition would be the anticipation of payment.7 An evaluation of the facts make it clear that Louisa’s acts would constitute to be past consideration and would not satisfy the exceptions that have been provided for in Pao On. Therefore no contract can be said to be existent Finally the discussion with Richard whereby an offer and acceptance was done (which included an agreement on the price) can be effectively said to have create a legal obligation and make both Richard and Mary bound to abide by their obligations. Thus a valid contract has come into existence between Richard and Mary and so any inaction by any of the party would lead to a breach of contract. 2. The question requires an analysis of the decision of Donoghue v. Stevenson and why it is considered important. Furthermore, the evaluation of how the judges scrutinized duty of care, breach of duty, causation and damages in respect of this case will also be evaluated upon. The courts have defined negligence as any conduct which tends to fall below the standard that has been laid down by the law so as to protect others from the risk of unreasonable harm. Donoghue v Stevenson8, a case decided in the House of Lords is a landmark case which established the concept of negligence and imposed what is now known as the duty of care concept. The facts of the case will not be discussed. The Plaintiff brought ginger beer from a cafe and due to the fact that there was a decomposed snail in the beer suffered from stomach pain and gastroenteritis and as a result of this was in a state of severe shock. The Plaintiff brought an action against the manufacturer claiming damages worth ?500. The only problem in respect of the case was that the Plaintiff had not purchased the beer from the Defendant, that is the manufacturer and so privity could not be established. The decision is considered to be important even though it was settled out of court due to the reason that the Defendant expired. Negligence and the neighbor principle in the case was laid down by Lord Atkin whereby he stated that reasonable care should be taken by a person so as to avoid acts or omission which iin reasonable contemplation would injury to his neighbor. The definition of neighbor was stated to be that of a person directly and closely affected by the acts or omission by the acts and so the person should contemplated that he would be affected due to such act or omission. The neighbor principle was a deciding criteria on which liability of the manufacturer was established, as it was found that the manufacturer should have had considered that his negligent act would lead to an injury to the final consumer. Thus proximity in respect of the manufacturer and the final consumer was considered and liability was construed in accordance with the neighbor principle. The courts found the duty of care on the basis of neighbor principle and went on to say that the duty had been breach by the manufacturer because he had been negligent and therefore due to his inactions the injury was caused to the final consumer. The courts when evaluation the condition of the Plaintiff evaluation there the cause of the harm because of the breach of the Defendant and was therefore directly attributable to him and so ven though there had been others involved in respect of the ginger beer reaching the final consumer, that did not break the chain of causation and liability remained intact and so a valid claim existed against the manufacturer. The damages in respect of the case were evaluated on the basis that since there had been a breach and the injury had been caused, the final consumer should be compensated for the negligence of the manufacturer and therefore the damage was attributed to the manufacturer. The only problem that remained in respect of damages was the fact that the case was settled out of court and therefore the evaluation of damages remained in ambiguity. The decision can be cited as one of the most important decision in respect of negligence, as reforms were made on the basis of the neighbor principle and the criteria for duty of care was established in this case, which till today, even though reformed in subsequent cases is still being followed. One other important aspect of the case was that privity of contact was no longer required for a claim to be brought for an injury like this. References MCKENDRICK, E. (2009). Contract law. Basingstoke, Palgrave Macmillan MARKESINIS, B. S., JOHNSTON, A. C., & DEAKIN, S. F. (2007). Markesinis and Deakin's tort law. Oxford, Oxford University Press. Read More