Aspects of Contract and Negligence for Business

SAMPLE ANSWERS FOR UNIT 05

ASPECTS OF CONTRACT AND NEGLIGENCE FOR BUSINESS[pic 2]

OFFER AND ACCEPTANCE

On 1st May, Aafreen decides to sell her collection of pots. She places an advert in the local paper,  ‘Beautiful  clay  pots  for  sale.  $500  or  nearest  offer.’  She  includes  her  telephone

number, email address, and postal address on the advert. On 2nd May, Betty emails Aafreen saying, ‘I will buy the pot for $450’. Aafreen replies saying, ‘I will take $475 but please let

me know by 5pm today’. Betty immediately emails back asking if Aafreen will  accept payment by cheque. By 4:30pm, she had not heard from Aafreen so Betty sends a further email to say she will buy the pot for $475. Aafreen’s internet connection is lost that afternoon

and Aafreen does not get this email until it is reconnected on 5th May. On 3rd May, Caleb calls

Aafreen and says he will buy the pot for $400 but Aafreen says she would not take less than

$475. Caleb says he will think about this. Later that day, Caleb writes to Aafreen saying he will pay $475 but the letter is misaddressed and never arrives. On 4th May Aafreen sells that pot to Dayan for $500. Dayan, a friend of Betty, meets her on 5th May and tells her of his luck in getting the pot. Betty is upset as the pot would have completed her collection.

The situation at hand is concerned with offer and acceptance. There appears to be various offers made for the sale or purchase of the clay pots. In order to determine who should be receiving the pots, we need to identify who has accepted a valid offer first. In order to make the discussion clearer, we will go through the case according to the persons.

Firstly, Aafreen has printed an advertisement hoping to sell her clay pots. We need to decide if this is an invitation to treat or a unilateral offer. Generally, advertisements are considered as an ITT, as seen in the case of Partridge v Crittenden. The advertisement works to invite people who are interested in dealing with the advertiser to connect with them and discuss a business transaction. However, in some situation, the advertisement can be a unilateral offer, like in the case of Carlil v Carbolic Smokeball Co. In this case, the advertisement was seen as a unilateral offer as it offered to others a way to accept the offer and a condition to perform. The Co also took various steps to actually show their interest in dealing under an offer.

In Aafreen’s case, we need to decide if her advertisement is an ITT or a unilateral offer. To do so, we need to look at what she had stated and whether that can be a condition. Aafreen had stated ‘$500 or nearest offer’. This was not capabale of being seen as a condition that can be performed to be accepted by another. Also, she was asking for others to make her an offer or to offer to purchase it for $500. Therefore, her advertisement was an ITT.

The first person she deals with is Betty who suggests a selling price of $450. This is sent via email. In this case, Betty is responding to the advert and making an offer of