Case Study Related to Business Law

...

In order to achieve a legal outcome for this case, below are five issues that we had discussed and analysed:

1. Is Joshua advertisement sufficiently clear to constitute an offer, or will a court follows the standard approach or treating it as an invitation to treat?

2. Assuming John statement is an offer or counter offer, what is the effect of Joshua agreeing to silence as a means of communicating his acceptance?

3. Is Joshua eventually acceptance unqualified and if so what was it communicated?

4. If the original advertisement was an offer, has James accepted that offer by calling at the house and leaving his note? Has this resulted in an immediate communication of his acceptance?

5. Does the postal rule apply to Janet purported acceptance?"

Discussion and Analysis

Issue 1

Is Joshua advertisement sufficiently clear to constitute an offer, or will a court follows the standard approach or treating it as an invitation to treat?

According to s. 2(a) of the Contracts Act 1950, when a person indicates an offer or proposal of his willingness to do or to abstain doing anything with a view to obtaining the assent of that other to the act or abstinence, he is assumed to make a proposal. Offer is a particular proposal to enter into a contract with another person. Offer is very important in forming a lawful contract as an offer and the acceptance of the offer that creates the contract. Besides that, an offer can be done in three different ways that are be implied, orally or in writing by the conduct of the person that is making the offer.

An offer is not deemed to have been made when it appear to be whether one party bound by his ‘offer’ and a contract has been formed if an offer is considered to have been accepted by a parties . The offer will be distinguish by court if it is known as an ‘invitation to treat’ by objectively asking if the party intended to be bound by their statement or not.

In this case, when Joshua tries and sells his car by parking it outside his house with a notice on the windscreen stating: “For sale. Pristine example-one owner RM80,000.00 or near offer. Please call number 38 or telephone 03-7552525, only”. This is an advertisement not an offer as he only put a notice on his car windscreen. It is a unilateral offer that means an offer made to the world as whole rather than to a specific person without the need of further consultations, mainly when an offer involves the offeree to perform an act and mostly, an offer cannot be made to the world at large as referred to Carlill v. Carbolic Smoke Ball case. Thus, advertisement is not an offer. The court would refer this case as invitation to treat as opposed to an offer if only one party is hoping to begin the negotiations. How would the court decided between an offer and an invitation to treat? The court will decide between an offer and an invitation to treat by always look upon the language used by the parties, the act or the inferred intention that the parties used when they perform an act.

Therefore, to get negotiations going and show the terms to which one party may be willing to accept, an invitation to treat is a tool that means a person does not plan to be bound as soon as another person accepts it to which the act is given. Things are different to an offer as in an offer the person is willing to be officially bound by upon acceptance. For that reason, Joshua’s notice on his car windscreen is to be considered as an invitation to treat not as an offer.

Discussion and Analysis

Issue 2

Assuming John statement is an offer or counter offer, what is the effects of Joshua agreeing to silence as a means of communicating his acceptance?

John is clearly making an offer to Joshua to buy the car for 55,000. Joshua was eager with the deal since issued a letter states that payment must be made in cash. What is the effect of this letter?

First, by introducing this new requirement of payment in cash, Joshua responses may be classified as a qualified acceptance, i.e a counter offer. If that so, the counter offer destroy John’s original offer (Hyde v Wrench (1840) 3 Beav 334) and John would need to accept this counter offer before any contract came into existence (of which there is no evidence). Moreover, Joshua’s subsequently recorded telephone message would effectively revoke this counter offer, at the very latest when John listened to it on Wednesday. The alternative view is by specifying that payment should be made in cash, Joshua may simply be clarifying the position. What other way John could pay, especially as payment by cheque is considered to be equivalent to payment in cash (d & C Builders Ltd v Rees [1966] 2 QB 617))? .

Assuming Joshua’s acceptance to be unqualified, when is it effective? As the letter is posted, it may attract the postal rule, whereby acceptance is effective on posting (Adams v Kindsell (1818) 1B &Ald 681). If so, modern authority would consider Joshua’s subsequent retraction to be ineffective (Wenkheim v Arndt (1873) IJR 73 (NZ)), however, one should question the reasonableness of using the post in these circumstances. The notice on the car required would be purchased to visit Joshua’s home or telephone him personally. An instantaneous communication is clearly contemplated by the parties, lest other people show an interest in the car whilst a letter is in transit. In these circumstances a court might well declare the postal rule inapplicable, particularly as John would not have expected a posted response. If so, the letter cannot be effective prior to its receipt, making the final result dependent upon whether the letter was delivered before or after John listened to Joshua’s record message on Wednesday.

- John need to accept the counter offer before any contract came into existence, as there is none stated in the case. However Joshua had leaving a message on the recorded telephone message “Ignore the letter you will receive-deal off” would effectively revoke this counter offer at very latest but John is away on business and listen to the tape on Wednesday evening.

In addition there is an example of cases the builders Ltd vs Rees 1996, actually Joshua might be clarifying the position by specifying payment should be made by cash and if the payment was made by cheque is considered to be equivalent to payment in cash.

Besides that, according to the Re selectmove Ltd [1995] 1 WLR 474,