Contract and Offer
Business Law
Question 1
For the given scenarios it is stated that both John and Patrick are aged over eighteen and are of sound mind and in the each scenario they intend to enter a legally binding contract.
For a contract to come into existence there have to be three steps involved: • Agreement (Offer and Acceptance) • Consideration • Intention to create legal relations
All three scenarios are supported by “consideration”. The general idea of consideration is that contracts involve an exchange in which both parties give something in exchange for the promise of the other. John offers his car in exchange for 10000 euros from Patrick.
As the last two steps involved in a contract are met we only look at the agreement, if there is an offer and an acceptance that would led to an enforceable contract.
a) In the first scenario John and Patrick meet on Tuesday to discuss the possible sale of John’s car. John is the offeror and offers to sell his car for 10000 euro provided that Patrick accepts the offer by 5.00 pm on Thursday. When Patrick calls back on Thursday at 7.00 pm to accept the offer he states that he had already posted an acceptance by last post on Wednesday. There is an offer and an acceptance made by post. The acceptance must be done before the offer is withdrawn or terminates. No contract can come into existence if the buyer does not respond to the offer as in Russell & Baird v Hoban. Patrick accepts by post and the rule is that an acceptance by post takes effect as soon as it is posted as per Adams v Lindsell (1818). This is important in case of revocation of an offer, where acceptance is already posted. There is an enforceable contract and Patrick is entitled to get remedies in the case John revokes his offer after his acceptance.
b) In the second scenario John and Patrick discuss the possible sale of John’s car for 10000 euros. John makes the offer, Patrick accepts the offer on Wednesday before John
Question 1
For the given scenarios it is stated that both John and Patrick are aged over eighteen and are of sound mind and in the each scenario they intend to enter a legally binding contract.
For a contract to come into existence there have to be three steps involved: • Agreement (Offer and Acceptance) • Consideration • Intention to create legal relations
All three scenarios are supported by “consideration”. The general idea of consideration is that contracts involve an exchange in which both parties give something in exchange for the promise of the other. John offers his car in exchange for 10000 euros from Patrick.
As the last two steps involved in a contract are met we only look at the agreement, if there is an offer and an acceptance that would led to an enforceable contract.
a) In the first scenario John and Patrick meet on Tuesday to discuss the possible sale of John’s car. John is the offeror and offers to sell his car for 10000 euro provided that Patrick accepts the offer by 5.00 pm on Thursday. When Patrick calls back on Thursday at 7.00 pm to accept the offer he states that he had already posted an acceptance by last post on Wednesday. There is an offer and an acceptance made by post. The acceptance must be done before the offer is withdrawn or terminates. No contract can come into existence if the buyer does not respond to the offer as in Russell & Baird v Hoban. Patrick accepts by post and the rule is that an acceptance by post takes effect as soon as it is posted as per Adams v Lindsell (1818). This is important in case of revocation of an offer, where acceptance is already posted. There is an enforceable contract and Patrick is entitled to get remedies in the case John revokes his offer after his acceptance.
b) In the second scenario John and Patrick discuss the possible sale of John’s car for 10000 euros. John makes the offer, Patrick accepts the offer on Wednesday before John