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2 contracts entered?

Discussion in 'Contract Law' started by james mortimer, Jan 4, 2012.

  1. james mortimer New law student

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    Hi everone,

    I have a question regarding contract law.

    On Monday, Chris telephoned Bradley and left a message on Bradley’s home answering machine offering to sell his track racing bike for £3500. Bradley’s wife telephoned Chris saying that Bradley was abroad racing for two weeks. Chris said he would be prepared to wait until Bradley returned before selling elsewhere. Bradley’s wife promised to inform her husband on his return.

    On Wednesday, Chris posted a letter offering to sell the bike to Jason for the same price, adding: ‘Please let me know by Saturday’.

    On Thursday, Jason posted a reply saying: ‘I’ll buy at that price. Are you including disc wheels?’ Jason’s letter was delayed in the post and not delivered until 0830 Monday.
    Bradley, in the meanwhile, returned earlier than expected, on Sunday. He emailed immediately saying that she wanted to buy the bike from Chris.

    Chris did not read the e-mail until 11.00 Monday.

    Advise the parties.

    I have done quite a bit of work on it but just wanted to see if anyone agreed with me.

    I have stated that C does have a contract as he has replied in a quick time manner and has posted the letter so can reply on the postal rule and a contract has been formed.

    With regards to B I know the offer originally was not sent to him directly so he can not accept the offer. He is then made aware of the offer by his wife who could be an agent? The email for me is acceptance of the offer so I feel A has entered into two contracts. Or could does A have to acknowledge his acceptance as silence is not acceptance?

    I know one contract is formed it just if anyone else feels B has a valid contract or not. I suspect their is no right or wrong answer but would like everyone else opinion.

    Thanks
  2. slobrob Moderator

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    This question revolves around the postal rule and time lapse

    Postal rule - once the offer has been communicated to the offeree and the offeree decides to accept the offer, the acceptance takes place as soon as the letter has been posted - see byrne v van tienhoven 1880

    Time lapse - an offer will usually lapse after a fixed period of time or a reasonable length of time. what is defined as reasonable will depend on the actual subject matter i.e. you cant keep an offer of tomatoes open for months on end as they will rot - see ramsgate victoria hotel v montifiore 1866 & financings ltd v stimson 1962

    However, Routledge v Grant it was held a promise to keep the offer open without consideration for a period of time will not be binding.

    The law is not set in stone and usually there is always both sides to argue. For me, I would argue that the fact Chris was prepared to wait then he has kept the offer open for at least 2 weeks. although the postal rule would normally apply as the 2 week period had not lapsed, and therefore Bradley has 2 weeks from monday to respond to the offer, after that the offer has lapsed and Chris is able to accept other offers. as a result, since the time period had not lapsed the offer would be binding towards Bradley rather than Jason.


    Note: regarding emails, although they are an instantaneous mode if the postal rule applied, the contract would come into force when Bradley hit the send button. However, the question is when the message is recieved - is it received when the email is seet through the server or is it when the email is actually read by the recipient? given the practical problems that could arise it seems acceptable that the contract will not come into force until the email is read by the recipient rather than when it is sent.
  3. james mortimer New law student

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    Thanks for your detailed reply.

    Is the promise to keep the offer open for 2 weeks binding? As you mentioned by Routledge v Grant.

    He can revoke the offer but I understand he has to communicate this and we can suggest that he has not.

    Also, as he has communicated via his wife is this still acceptable as it was not direct with him. Or is the fact that she is his wife or that a voicemail was left on his phone sufficient?

    Thanks
  4. slobrob Moderator

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    Sorry, Routledge v Grant comes under revocation of an offer - time lapses is a different form of an offer expiring. As previously mentioned, there is no real right or wrong answer in law, providing that you can argue and provide sufficient reasoning, both answers may be correct.

    The fact that he had left a voicemail and then agreed to wait after speaking to Bradley's wife, I would fin sufficient to bind Chris on keeping the offer open for 2 weeks - had the email that was sent read on the Tuesday then the offer may have lapsed and therefore the contract would be binding with Jason
  5. james mortimer New law student

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    Yes I am doing a finance degree and have to do a law module. I am used to maths where you get just one answer but law is very subjective.

    I might mention that as the offer was still open for bradley and he had recieved no firm acceptance from Bradley he could sell to who he wants. He recieves acceptance from jason on the thursday. Chris could then on Monday after 8.30am but before 10.30am contact Bradley to say he has withdrawn his offer. This might work as he has not read the email from bradley untill 10.30am. So he could call him at 9am after he recieves the letter. Maybe this is why we get given times?
  6. slobrob Moderator

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    Bradley has 14 days to decide whether or not he wants to purchase the bike, and that include anytime of the day on monday. when he returns he immediately states he wants the bike - so the offer would have to be kept open for Bradely until the close of play Monday, before he could sell to whoever he wants. In addition, Chris did not inform Bradley that he was revoking the offer (this is where Routledge v Grant comes in), an had time to do so.

    You say in your answer above what Chris could have done, but this is not what is in the facts so you can only advise the parties on the facts of the case - could, should or would is not enough to persuade the court. Always stick to the facts of the case, you could however say that, Had Chris contacted Bradley to revoke the offer before opening the email, Jason would be bound to the contract.

    So in a simple answer, Chris agreed to keep the offer open for 14days / 2 weeks, even though he read Jason's letter, failed to contact Bradley about revoking the original offer. As a result of this, as soon as the email had been read by Chris the contract was binding - regardless of the letter by Jason. The only way Jason would be bound is if the time period had lapsed i.e. no response from Bradley after Monday.

    Although Jason says he will buy at the price, you could argue that he has asked a question in addition which has not been answered and could be argued that his intention to be bound would be on the basis of whether or not the disc wheels were included and merely an inquisitive reply.
  7. james mortimer New law student

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    Thanks for all your help you have been a big help in understanding all this.

    So would you agree that two contracts have been entered into as soon as he reads the email from Bradley? As he offered the bike to Jason. Jason just accepts the offer presented to him and is not aware of the problems. Could he not take action if he did not get the bike? Thanks
  8. slobrob Moderator

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    No contract exists with Jason as the offer was open to Bradley for 2 weeks and the contract was bound upon reading the email. The only contract existing is with Bradley and as far as remedies for Jason, I'm certain there are none available as there is no contract.

    just to note, when answering scenario questions its always best to identify the problem and define, explain the relevant case law and then apply it to the scenario at hand - basic elements of a contract is an offer, an acceptance and the intention to be legally bound.
  9. james mortimer New law student

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    Thanks again I think i am nearly done now.

    Why is the offer to jason invalid is it beacuse he has already offered it to Bradley? Can he not offer to he wants? Does the postal rule not apply in this case then. Do you know any case law that makes Jason offer no good?

    Thanks
  10. slobrob Moderator

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    depending on the situation, you cannot just offer to anyone. In this case, Chris offered the bike to Bradley first and decided to keep the offer open to him for 2 weeks. That means you must keep the offer open to the person for that period of time before accepting another persons offer.

    If for example, Chris read the email Monday morning and then sold the bike to Jason, Bradley could sue Chris for breach of contract as the contract would be binding. Unfortunately there is no contract binding between Chris and Jason as Chris must keep the offer open to Bradley for 2 weeks and since Bradley accepted the offer, any offer made to Jason is void.

    examples of time lapse
    Ramsgate Victoria Hotel v Montifiore 1866
    financings ltd v stimson 1962 are

    OR
    you could also read Goldsbrough Mort v Quinn (1910) - Note, This is an Australian case and therefore has no binding on UK courts however it can be used as persuasive authority

  11. james mortimer New law student

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    Thats very interesting. It is much clearer now.

    Bradleys offer was not given to him directly does this matter as his wife is not an authorised person? Or can we assume a home phone is enough to communicate the offer?

    Thanks
  12. wasilissa New law student

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    can any one plz send me full answer for diz question

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