Commercial Law

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And for such a contract of sale to be legally binding and valid, the acceptance has to be identical to the offer with respect to terms and condition (Borchard, 1838). This means that either Bernard, Damien or both of them has to agree and fulfil the obligations that is specified by the offer to sell by Alan within the enforceable period before Alan terminates his offer to sell on the 5th of November 2014, in the manner stipulated by Alan. If acceptance is not according to the conditions specified by Alan, it ends up as an agreement that is not legally binding, because legal bonds only arises if the conditions of offer exactly matches the conditions of acceptance.

On 1st November 2014, Alan made an offer to sell on his Facebook wall as a message to all existing and future students of Kaplan Higher Education taking the unit Commercial Law. The conditions for the sale was that he was selling his textbook along with this exercise book containing his handwritten notes for the unit of Commercial Law. Both items are to be sold together for $200 and the full payment must be received by Alan by 5th November 2014.

Between Alan and Bernard, a contract was formed on 3rd November 2014. The earlier messages between them on 2nd November 2014 was invalid in the formation of contract as Bernard made a counter-offer to buy at a lower price of $150, which was immediately rejected by Alan on 3rd November 2014. The rejection invalidates the counter-offer to buy at $150 and at the same time terminates Alan’s initial offer to sell at $200. Thereafter, Bernard made a new offer to accept Alan’s offer to sell at $200 and to make arrangements to mail $200 to Alan before Alan’s deadline of 5th November 2014. In this case, acceptance on 3rd November 2014 matches Alan’s terms and condition and the contract was formed.

Between Alan and Damien, a contract was formed on 2nd November 2014 after Damien managed to get Bernard to pass him Alan’s handphone number. In this case, Damien immediately accepted Alan’s offer to sell and indicated he would like to make payment for the books on the 4th of November, therefore matching Alan’s terms of $200 being the price and also payment to be made by 5th November 2014.

Between Alan and Charleen, there was no contract being formed despite the fact that Charleen verbally made arrangements with Alan to buy the textbook from him and to make payment. Firstly, Charleen being a minor, and the textbook not being a necessary invalidates any attempts in making any agreement between them a contract. Secondly, Alan’s silent acceptance of just nodding and smiling at Charleen when she was verbally conveying her intention to agree to Alan’s offer to sell is not considered a positive acceptance (Llewellyn, 1939). Therefore, since Alan’s passive acceptance of silence invalidates a contract, there was no contract formed between them. Thirdly, Charleen made payment on 6th November 2014, which was past the deadline of 5th November 2014 set by Alan. This does not match Alan’s initial offer of selling and therefore Charleen’s acceptance to pay is not considered as an acceptance in Alan’s offer.

Legal positions of Bernard, Charleen and Damien

Due to the fact that Charleen did not form a legally binding contract of sale with Alan, she has no legal position in this case.

Bernard fulfilled his legal obligations by making payment of $200 for both the textbook an exercise book when Alan received $200 from him via postage on 5th November 2014, 5:00pm. This is within his conditional parameters of receiving payment by 5th November as per stated on his initial Facebook wall message. This then results in the contract being discharged (White, 1988).

However Bernard has been dealt with a wrongful act as Alan has breached the contract. Alan broke the conditions of the contract on 7th November 2014 when he failed to hand Bernard both the textbook and exercise book containing his handwritten notes. Instead, he only handed Bernard the textbook only. Therefore the contract between Alan and Bernard was discharged due to a breach (Simpson, 1959).

Damien also fulfilled his legal obligations when he made payment of $200 to Alan on 4th of November 2014 when he met Alan and handed him cash. Following that, Alan informed Damien that he will be receiving the goods on 7th November 2014. On 7th November 2014, Damien received both a textbook and the exercise book from Alan and the contract was discharged on performance (Rosett, 1974) as both parties were able to act on the conditions stated in the contract in terms of time and payment.

Dispute resolution options

Common law can be used to deal with the breach of contract that was experienced between Alan and Bernard. Bernard did not receive the promised two items and instead he only received one. Therefore the goods that he received from Alan can be considered to be defective. Since the price was fixed and quantifiable, Bernard can apply for special damages and have the amount of $200 compensated back to him.

The pros of this is that Bernard’s loss of $200 in buying a defective product from Alan will be resolved. However the cons to such an option is that if Bernard were to seek legal advice and settlement for this issue, the cost incurred to do so will be many times more than $200 since legal fee usually amount to thousands of dollars. Therefore it is recommended that Alan and Bernard seek private settlement on this issue. If in the event they are unable to arrive to an amicable settlement, perhaps they can approach Kaplan Higher Education for mediation and assistance in this matter.

References

Borchard, E. (1838). Neutrality. The Yale Law Journal, 37-53.

Chandran, R. (2009). Introduction to Business Law. McGraw-Hill Education (Asia).

Gilson, R. J., Sabel, C. F., & Scott, R. E. (2015). Text and context: contract interpretation as contract design . Cornell Law Review, 23-98.

Llewellyn, K. N. (1939). Our Case-Law of Contract: Offer and Acceptance, II . The Yale Law Journal , 779-818.

Rosett, A. I. (1974). Contract Performance: Promises, Conditions and the Obligation to Communicate .

Simpson, L. P. (1959). Punitive Damages for Breach of Contract. Ohio.

Tabalujan, B. S., & Du, V. T.-L. (2012). Singapore Business Law. Singapore: Business Law Asia.

The Statutes of the Republic