Case 1: Tenders Submitted to the University of Millennia
The issue of the case is to check the contractual liability of all the parties stated in the provided case study.
A contract can be understood as a set of promise that two or more parties exchanges in mutual for a decided consideration. A contract can be in either form i.e. the same can be prepared and developed in written as well as in oral mode (Business.gov.au, 2018). For a valid contract, some factors need to be there always. These factors are known as essential of a contract. These factors consist the following
- Offer
- Acceptance
- The intention of the parties
- Consideration (E-lawresources.co.uk, 2018)
In absence of one or more factor, a transaction cannot be considered as a contract. Offer is a very first step of a contract. An offer needs to be accepted by the person to who the sane is made. In addition to the aforementioned factors, some other terms are also there which needs to be studied. Invitation to treat is one of them. It is necessary to mention that there is a difference between offer and invitation to treat. Invitation to treat is merely an invitation for offers that comes before the offer. However, in every transaction invitation to treat is not necessary to be there (Ayres and Klass, 2012). According to the facts and decisions of the case of Spencer v Harding Law Rep. 5 C. P. 561, an invite/request for tender is considered as an invitation to treat and therefore tenders are considered as offer. Nevertheless, when a request for tender consider as an offer when the same states a condition that it will accept lowest or highest tender or states any other specific term.
The second step of a valid contract is acceptance. It is an important aspect of a contract. If there is no acceptance to an offer, there will be no agreement as well a contract. An offer is required to be accepted by the offeree only. An acceptance needs to be communicated to the offeror (Chen-Wishart, Loke and Vogenauer, 2018). As soon as offeror comes to know about the acceptance, the same is treated to be complete. It means the moment when an acceptance is communicated to the offeror, the same considers to be complete. However, there is an exception of this rule. It is a situation where postal rules are applicable. An offer and acceptance can be communicated via any valid mode of communication. In the cases where parties to a contract chose the postal mode for communication, postal rules are applicable. According to these rules, an acceptance gets complete and communicated as soon as offeree place the acceptance letter to the mailbox despite the moment when offeror received the same (Duhaime.org, 2018). The logic behind the same has been given in the case of Byrne v Van Tienhoven (1880) LR 5 CPD 344. It was held in the decision of this case that whenever postal rules are applicable, post office act as an agent of the offeror. This is the reason that postal of acceptance makes the same communicated to the offeror.
Issue
In the given case, the request for tender has not mentioned any specific term about the acceptance of tender. Hence applying the provisions of the case of Spencer v Harding Law Rep., this will be treated as an invitation to treat. In this situation, tenders will be considered as an offer. The invite was open till 01st June. The first offer made by Greenland as on 29 May. Secondly, another party Enviro made it is offer via post and hence applying the provisions of postal rules the date of the offer will be considered as 15 May. At last the third party of the transaction i.e. Plant forever made it is offer as on 30 May but the university has received the same as on 2 June. As Plant, forever made this offer via post and hence it will be treated as valid offer as the date of the offer is 30 May, not the 02 June, which is within the time period mentioned in an invitation to treat. University has lost the tender provided by Greenland and did not provide it is acceptance towards the same. Further, for the reliability issues, the university has also not accepted the offer made by Enviro. At last, University found the offer made by Plant forever suitable and accepted the same. This acceptance letter has never been received by Plant forever. Applying the provisions of postal rules and Byrne v Van Tienhoven., acceptance has validly made and communicated on the moment when university placed the acceptance letter to post.
Conclusion
In conclusion, this is to be stated that there is no contract of University between Enviro and Greenland and no parties are obliged to perform anything for each other. Further, a valid contract existed between university and Plant forever. Now, University has a right to ask for the performance in against of plant forever and can sue the same for breach of contract.
To check the legal effects of each form of communication of the parties took place between 1 October and 10 October.
As mentioned in the previous segment that an offer is different from an invitation to treat, this is to mention that in an invitation to treat, parties merely negotiate on the terms of the possible contract. According to the decision of the case of Partridge v Critenden (1968) 2 All ER 425, an advertisement comes under the category of invitation to treat. Further, another term of contract law, which is a request of information, is also different from the offer. A request of information is not an offer itself but is simply a question about price, delivery or other aspects. An offer needs to consist a consideration for another party. According to the decision of the case of Chappell v Nestle [1960] AC 87 a consideration is required to be sufficient and not adequate. Further, behind every offer and acceptance there be must be an intention of the p[arties to bind each other in a legal mode (Australiancontractlaw.com, 2018).
When a person makes an offer, it is required on the part of offeree to accept the same. Under Contract Law certain essentials are mentioned which are identification a valid acceptance. For instance, the offeree must make such acceptance. Further, the same is required to communicate to the offeror. In conjunction with this, it is also required that such acceptance must be clear and must not make an alteration in any term of the original offer. An acceptance where offeree altered the terms of the original offer, then such acceptance is known as a counter offer and not the consent. It was held in the case of Hyde v Wrench (1840) Beav 334 that a counteroffer cancels all the previous offers and therefore offeree cannot accept the previously made offers (Webstroke.co.uk, 2018). There is also a difference between a counter offer and request of information and one should not get confused in between both of them. Where a counteroffer rejects all the previous offer, the same does not go with the request of information.
In the given case, there are different parties that have communicated with each other various times. First of all the notice published in the newspaper by Footloose Pty Ltd would be considered as an invitation to treat as per the provisions of the case of Partridge v Critenden. The advertisement shows the chances of negotiation. The other communication placed on 2 October where Famous Footwear made shown it is a willingness to buy 500 pairs at $2000 per hundred to Mr. Simone (who was acting on behalf of Footloose Pty Ltd). This was an offer but not the acceptance as the advertisement was merely an invitation to treat in reply of which Famous Footwear made the offer. On 4 October, James made another offer. In his offer, James made everything clear. It was a valid offer as all the elements such as consideration and intention to create legal relationship was there. In the communication made on 6 October, Simone changes the terms of the original offer made by James as he excluded the delivery service and asked Kames to accept the offer. The communication made by Simone of 6 October was a counter offer and not the acceptance. This counteroffer canceled the offer made by James.
Further, on 8 October James stated that he is ready to counter offer made by Simone on 6 October and want to know the earliest delivery date. It was a request of information, as it was not a complete acceptance. On 10 October, parties have agreed on the terms and conditions and everything was clear between them. On this day, James faxed a letter to Simone in everything was included such as mode of payment, objects, delivery date, and consideration. It was the final offer of the case and was accepted as both of the parties became agree on every term of the offer.
Conclusion
In order to review the legal effect of various terms of the transactions, this is to mention that the contractual relationship was there between James and Simone and Famous Footwear is not eligible to accept the advertisement as the same was only an invitation to treat.
References
Australiancontractlaw.com. (2018) Chappell & Co Ltd v Nestle Co Ltd [online] Available from: https://www.australiancontractlaw.com/cases/chappell.html [Accessed on 15/12/2018]
Ayres, I., and Klass, G. (2012) Studies in Contract Law. 8th ed. New York: Foundation Press.
Business.gov.au. (2018). Types of contracts. [online] Available from: https://www.business.gov.au/people/contractors/understanding-contracts/types-of-contracts [Accessed on 15/12/2018]
Byrne v Van Tienhoven (1880) LR 5 CPD 344
Chappell v Nestle [1960] AC 87
Chen-Wishart, M., Loke, A. and Vogenauer, S. (2018). Formation and third party beneficiaries. UK:Oxford University Press,
Duhaime.org. (2018) Postal Rule Definition. [online] Available from: https://www.duhaime.org/LegalDictionary/P/PostalRule.aspx [Accessed on 15/12/2018]
E-lawresources.co.uk. (2018) Contract Law. [online] Available from: https://e-lawresources.co.uk/Contract.php [Accessed on 15/12/2018]
Hyde v Wrench (1840) Beav 334
Partridge v Critenden (1968) 2 All ER 425
Spencer v Harding Law Rep. 5 C. P. 561
Webstroke.co.uk. (2018) Hyde v Wrench [1840] [online] Available from: https://webstroke.co.uk/law/cases/hyde-v-wrench-1840 [Accessed on 15/12/2018]
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