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Contract law is,
essentially, the imperative necessity in binding a legal agreement between two
or more parties on the basis of a mutual understanding within terms and
conditions of a written or verbal contract. The validity of a contract must
include key factors in order for it to qualify: an acceptance, consideration
(an invitation to treat) and the intent to go through with creating legal
relations. An offeror is typically the party of which presents an offer to an
offeree, one to whom an offer is made and  has the right to accept or reject the
offer. 

                           An acceptance occurs
when the offeree expressly accepts the offer made by the offeror. To illustrate
the general rule to the case of acceptance is that it must involve
effective communication between the two parties or authorization given to a
third party on their behalf to accept.  An
acceptance can be valid to be accepted orally, via a telephone, or written in
forms of a letter or an email depending on the level of formality of the
contract. The offerer may demand a particular method of communication for the
offeree to accept but a clear acceptance must be made. In the case of Entores Ltd vs Miles Far East Corp- Denning LJ, delivered the leading judgment. He said that the
postal rule could not apply to instantaneous communications, such as telephone
or telex: if a phoneline “went dead” just before the offeree said
“yes”, it would be absurd to assume that the contract was formed and
the parties would not have to call each other back. Lord
Denning  LJ (1955, p.97)  explained “suppose for instance, that I shout
an offer to a man across a river or a courtyard but I do not hear his reply
because it is drowned by an aircraft flying overhead. There is no contract at
that moment. If he wishes to make a contract, he must wait until the aircraft
is gone and then shout back his acceptance so that I can hear what he says. Not
until I have his answer am I bound.”  – It
must be brought to the attention of the offeror when an offer is being
accepted.

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If
the method of communication is being requested via postal services, the general
rule states that the acceptance is valid from the moment the letter of
acceptance has been posted, regardless of delays, or incidences of lost, stolen
or damaged packages resulting in a failed delivery to the offeror. In the case
of ‘Adams v Lindsell (1818)’, it
establishes the postal rule which states a letter with a correct address, along
with the correct postage stamp, is classified as an acceptance. This is known
as ‘rule of convenience’, (Duxbury, 2015) and suggests that in the request of a
postal acceptance, as an offeror; all risks associated with the form of
communication must be apprehended beforehand.

            An invitation to treat
is an expression of willingness to negotiate which is not to represent an offer
and/or cannot accept as a form to bind a contract. The
courts take an objective approach in deciding whether a statement was an offer
or an invitation to treat. It is essential to understand the difference between
the two; when accepting an offer it automatically signs you up into the binding
contract, whereas an invitation to treat is the introduction to making an
offer. Invitations are some form of an advertisement in a way that it initiates
an invitation to bid or bargain for an item (or service), with these conditions
set, of course, however no party is obliged to continue with the sell or buy.            

To complete a contract,
aforementioned, one party must make an offer and the second party must accept
the offer. In the case of Pharmaceutical
Society of Great Britain v Boots (1953), the Poison Act 1933 was introduced.
The case explained: all prescribed drugs must be purchased under the
supervision of a qualified pharmacist, (Br Med J 1950;2:455). The arguments in this case,
defendants were being prosecuted due to a pharmacist not being present at the
time of selecting the pharmaceuticals from the shelf. Firstly, the displaying
of goods on the shelves was an invitation to offer without the supervision of
the pharmacist. What constitutes as an offer here was presenting the goods at
the cash register had the intention to purchase the goods, and communicated so.
The contract is accepted the moment the pharmacist accepts the customer’s offer
by taking the cash in exchange for the product. In terms of acceptance
analysis, the goods were displayed being an invitation, therefore the movement
of cash from the customer to the cashier is the offer, and is complete when
payment is taken and processed which implies acceptance.

The same analogy applies
in Fisher v Bell (1961) the lawsuit
where a ‘flick knife’ item was advertised for sale in the shop window and the display
of the product was decided that it was an invitation to treat. Any consumer whom
wished to enter the shop with the intentions of purchasing the knife at the
priced indicated in the shop window. The display was a mere invitation; meaning
that there were no forms of agreement hence no offence being performed,
(Tillotson and Mulcahy, 2004). A bilateral contract is known to have an outstanding
obligation remaining on both sides of the party which an offeror makes a
promise in return for a future bargain from the offeree. The case Partridge
v Crittenden (1968) exhibits
the rule of advertisements for its understanding known as an invitation to
treat. This advertisement was found in the section for classified advertisement
and there was no evidence of the phrases for sale on view.

     The Tort of negligence measures
and strictly governs circumstances of wrong doings affecting an
individual the legal wrong doing
where the defendant breached the applicable standard of care. Duty of care is
an area in the tort of negligence regarding the moral and legal obligation
which should ensure the safety or well-being of others across a range of
factors including physical, mental injury and even economic loss. Duty of care
is tested via three key areas: forcibility, Proximity and Just and
reasonableness. The different, complex
areas in torts makes it difficult to define but can be seen as: ‘a tort is
conduct which renders the defendant liable unless he has some defence.’ (Weir, 2002). In the workplace there are legislations such as Health and Safety at Work Act 1974 for
guidance to prevent the amount of injuries caused. This can be
simplified in the circumstances that for those who act irresponsibly and
reckless can result in damages or injury of another being due to not acting
responsibly. In the case of negligence, tort law will compare the actions of
the defendant to the hypothetical reasonable man, in the exact situation.

The case of Langley vs
Dray (1988) examines forcibility; the defendant driving a stolen car was chased
by a police officer. The officer slipped and was injured in the process. The
court rules that the defendant owed a duty of care as he knew or ought to have foreseen
that the police would be in pursuit as thus should not have gone so fast. He
had a duty not to create such a risk. For assessing proximity, we take from the
Watson v BBBC (1999) case; the defendant failed to provide sufficient medical
care at the ringside. The claimant suffered severe brain damage following an
injury in the ring, but the evidence suggested his injuries would have been
less severe had better medical attention been available ringside. The court
ruled that the sport’s controlling body owned a duty of care to those who took
part. Injury was foreseeable. The license system created proximity; it was just
fair and reasonable to impose such a duty.

 

Scenario
1 Analysis

        In consideration of the original contract the three piece settee
leather chairs were to be supplied at the payment of £1200. In the case of Dixon
displayed an invitation to treat, to those interested in the product. A
negotiation was then agreed over the phone between the offerer, Dixon, and the
offeree, Carol to take the new range of sofas at the price of £960. By verbally
accepting this £960 offer over the phone, this acceptance binds the contract
between the two parties. Carol had the responsibility to be aware of the terms
and conditions upon accepting the offer. When this deal was sealed, there were
no terms to change the price or external services (delivery) when it was
agreed. In order for the terms and conditions of the offeror to prevail, to
whom you are negotiating with needs to respect the measures needed to be put in
place in order to objectify the performance of the agreement. This is to reduce
the chances of being challenged by any terms which the offeree has to offer.

Scenario
Two: The store wrote to Xeaz Ltd on 1 October offering to sell a 1920 coffee
table for £120. On 12th October, having received no reply from Xeaz Ltd
the stores decided to withdraw the offer and sent a second letter, this time by
recorded delivery. On the 12th October, Xeaz received the original
letter, and then posted a reply to the store accepting the offer. However, the
store never received Xeaz’s letter and sold the coffee table to Melanie on 15th
October.

 

Scenario
2 Analysis

Aforesaid
in the case of ‘Adams v Lindsell (1818)’,
it is established that the postal rule which states a letter with a correct
address, along with the correct postage stamp, is classified as an acceptance. The
‘rule of convenience’, (Duxbury, 2015) again takes place and suggests that in
the request of a postal acceptance, as an offeror; Always Stores Ltd
 must then take all risks associated with
the form of communication must be apprehended beforehand. However, a clear
communication of acceptance must be made by the offeree tp classify and bind
the contract of which was not received in the end which essentially voids the
terms.  

 

Introduction
to forming a PLC:

                           Holding a title of a
PLC contributes immensely to the company’s financial status which can be seen
as a prestigious profile within the industry. The main advantage of this is
that it holds. There are two mandatory documents required to registering a
public limited company to enable trading- A Memorandum of Association and an
Article of Association.

The memorandum of association,
which is often simply referred to as the memorandum is the document that
governs the relationship between the company and outside stakeholders; allowing
prospective investors to know what the company is to be used for and what risks
they will be taking with their money. The memorandum is basically a statement
that the subscribers wish to form a company under the Companies Act 2006 and
have agreed to become members.

The article of association
outlines the responsibilities of a director. In order to start trading as a
public limited company a company name would be needed as well as company
details i.e. the address of a Director as well as a company address and a
statement of capital. Finally, you would need to incorporate your company
whether it be via Formation Agents or an Accountant.

Duties Involved:

In relation to the law of agency an agent is the representation of a
principal. In order to act accordingly as an agent a duty of loyalty is
expected towards the principal. This simply means the agent cannot act in
his/her own interests or benefits when carrying out an action for the
principal. There is also a duty of care. It is expected that the agent will
exercise a reasonable duty of care when carrying out the duties on behalf of
the principal. It is also expected that the agent keep the principal fully
informed when carrying out an action and to also obey the instructions of the
principal. The only times these duties can be exempted is if an emergency
situation should occur and the agent cannot come in contact with the principal
or if a violation of the law should unfold. A failure to abide by these results
in a breach of contract of Agency and the agent is therefore liable for any
loss sustained by the principle.

 

 

 

 

 

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