Law Assigment - Contract Formation

Commercial Law Assignment

Alan v Co. (2016)

Contract Formation

“A contract is a legally binding or valid agreement between two parties. The law will consider a contract to be valid if the agreement contains all of the following elements; offer and acceptance, an intention to create legal relations, legal capacity of the parties, consideration to be paid for the promise made and the consent of both parties.” (The Law Handbook, 2015) From the facts relayed, we understand that the only contract formed was with Damien. This was made official when Damien handed over the $200/- to Alan when the initial offer was accepted. With regards to Charleen, Alan’s younger sister, no contract was formed as there was no acceptance with regards to this. Additionally, no contract was form between Alan and Bernard as the initial offer was rejected and Bernard made a counter bargain after Alan had accepted Damien’s offer. Overall, the product, in this case, the textbook and the hand-written notes were posted on the social media platform which is considered an invitation to treat to begin with.

Charleen’s Legal Position

Charleen, whom is Alan’s younger sister has no legal rights with regards to her case. This is primarily due to the fact that the basic elements to form a contract has been breached and therefore, no contract was formed in the first place. This can be attributed to the fact that the minimum age to form a contract would be 18 years of age and Charleen is currently sitting for the GCE Ordinary levels which puts her at the age of approximately 16 to 17 years old. Therefore, no contract was formed due to the lack of legal capacity as the purpose of forming a contract would supposedly be legally binding and it is questionable if direct siblings can be involved in forming a contract that would be legally binding.

        Additionally, Charleen left the $200/- on Alan’s desk as he was about to turn in for the night and his mind was pre-occupied with his favourite soccer team formation and thus, did not acknowledge the offer and initially was not serious in selling the mentioned materials to her to begin with. Next, it was not made known if Alan had pocketed the $200/- left on his table by Charleen and even though if it did happen, no contract will still be formed with regards to this. Last but not least, the key factor here would be his form of acknowledgement was through a gesture, a smile and there was no verbal agreement and evidence to support that Alan wanted to sell his materials to Charleen.

        Alan can use the case of Frances M. Sparrow V. David D. Demonico (2011) to prove that Charleen was not of legal capacity to enter a legally binding agreement in which the court determined the contract to be voidable on her part due to the fact that she has not reached the legal age of 18 and therefore, cannot be considered rational in making self-informed decisions. Therefore, Charleen is not able to pursue this matter legally and should resort to asking her brother to return the money immediately and thus, closing this issue amicably.