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Legal rights

Discussion in 'Contract Law' started by shi ting, Sep 19, 2011.

  1. shi ting New law student

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    Hi all,
    I have a project on this question would be happy if your can help and analyize the question :D
    On 15 May 2011, Peter verbally offered to purchase 500 bags of cement from Mr. Lee for $75 per bag. The offer was to remain open for three months. On 15 July, Mr. Lee accepted Peter’s offer by sending him an email. However, Peter has refused to buy the cement bags, stating that it had all been a joke and that there is no formal contract.
    Mr. Lee wants to know of his legal rights in the above situation and whether he could sue Peter.
    Advise Mr. Lee. Support your answer with a minimum of three relevant case law.

    Cheers
    shi ting, Sep 19, 2011
    #1

  2. slobrob Moderator

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    Hi Shi ting,

    There are three basic elements of a contract:
    1. Offer and acceptance (reached an agreement)
    Carlill v Carbolic Smoke Company 1893, Bowerman v Associatin of British Travel Agent ltd 1995,

    You may also want to touch on acceptance by email / postal rule. Also termination of the offer e.g. revocation (routledge v grant 1828) or lapse of time (ramsgate victoria hotel v montefiore 1866)

    2. They must intend to be legally bound

    3. Both parties must have provided valuable consideration
    consideration must not be past (Re Mcardle 1951), consideration need not be adequate (chappell & co ltd v nestle co ltd 1960), (haigh v brooks 1839)

    I'm sure that will get you started, have a read through that and if you get stuck then let us know :)
    slobrob, Sep 20, 2011
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    mike and shi ting like this.

  3. shi ting New law student

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    Hi slobrob
    your reply helps alot! :D
    i will start on my report soon, thanks!!!
    shi ting, Sep 20, 2011
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  4. shi ting New law student

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    Hi slobrob!
    I have come up with some legal view to support Mr Lee to sue Peter for breach of contract and damages.

    Firstly there is an establishment of the verbal offer as a valid offer.
    In accordance to the common law, a verbal offer can be made either in person or over the telephone. When both parties agree the terms of the contract by verbal statements, the binding terms of the contract are more difficult to ascertain, however it still leads to a legal binding contract when there is an acceptance. Peter verbally offered to purchase cement from Mr Lee whether it was over the telephone or in person. Therefore Peter’s offer is valid.
    The objective theory of contracts
    In relation to Mr Lee’s case, he as a reasonable person has interpreted Peter’s offer as a serious offer with an objective intention and since he was unaware of Peter’s joke which was a subjective intention, the offer is considered valid and a binding agreement would take place right after an acceptance by Mr. Lee provided there is no revocation of offer made before the acceptance.

    Secondly there is a presence of a formal contract

    Since the verbal offer made by Peter is a valid offer, it is important to establish that a contract is valid between him and Mr Lee in order for any legal actions to be imposed. Therefore it must also be proven that Mr Lee’s acceptance is valid for a contract to be created.

    Lastly the validity of the contract

    According to the law of contracts, a contract would be considered as void if the agreement between the parties had dealings with anything that is illegal in nature and violates a local, state or federal law. For instance: both parties having a verbal contract with regards to illegal drugs. The contract between Peter and Mr Lee was the selling of cement, which is clearly not illegal and it was said to be the business which Mr Lee runs. Therefore, since it wasn’t an illegal bind, the oral contract between Peter and Mr Lee is still valid and cannot be void, hence giving Mr Lee the ability to gain a form of compensation.

    Do you think my points are valid to advise Mr Lee to sue for breach of contract and damages?
    shi ting, Oct 10, 2011
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    mike likes this.

  5. slobrob Moderator

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    Can i just clarify something here .. are you basing your answer on English law or US law as you did put in your answer ....
    either way im sure the UK and US law are similar in some ways and regarding your answer its a good start however i don't see any case law which may not bring your marks up as high as possible. If you follow the I(dentify)D(efine)E(explain) A(pply to the scenario) format it should give you a start. So, for example offer and acceptance is defined as .... by the book X. then go on to explain what offer and acceptance is by using case law e.g. in English law carlill and carbolic smoke ball co. as well as distinguishing an offer from an invitation to treat using case boots v pharmaceutical society of great britain.

    Finally you apply it to the scenario you have so, as peter verbally offered to buy his cement bags and stated it was open for 3 months this can be seen as an offer to mr. lee - in addition mr lee accepted the offer by peter by sending him an email which was still within the 3 month time limit given by peter and therefore .... you get my drift :) im sure you could word it better than i have there
    slobrob, Oct 11, 2011
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