Part A
A contract is an agreement, which is created between two or more parties, which gives rise to legal rights and obligations. In a contract there are usually two parties, in which Party X promises to Party Y to do some task or work and in return, Party Y promises to fulfil the consideration condition. The formation of contract requires the presence of some specific elements (Bonell, 2009). These are the element of offer, the acceptance, consideration, capacity, clarity and intent. Upon these six elements coming together a contract is formed. Once a contract has been formed, the Party X and Party Y get under an obligation to fulfil the terms of the contract. Where the terms of the contract are not upheld, a breach of contract takes place. In order to mitigate the dispute raised from such a breach, the parties have the option of referring the matter to the different techniques of Alternative Dispute Resolution (Gibson & Fraser, 2014). This discussion is focused on these different concepts governed by the contract law.
The first issue relates to the contract formation between the different parties.
As has been provided in the previous segment, the formation of contract requires the element of offer to be present. An offer is deemed as the expression of willingness of the parties to form a contract on the basis of certain key terms and is made with the intention that once this offer is accepted, it would become binding (Treitel & Peel, 2015). There is a need to understand that an offer is different from an invitation to treat. An invitation to treat shows that the parties are only willing to negotiate upon the possible contract, which may or may not be formed, and required offer to be made. For instance, Partridge v Crittenden [1968] 1 WLR 1204 led the court to decide that the ads which are published in the magazines or the newspapers are not an offer, but an invitation to treat. However, when it came to the ad published in the landmark English case of Partridge v Crittenden [1968] 1 WLR 1204, it was deemed as a unilateral offer. This was because in this case, the offer had been made to the world, which could be accepted by anyone merely by performing the offer (Latimer, 2012).
Upon an offer being made, it becomes necessary for Party Y to accept the offer made by Party X. This has to be done in the manner in which the offer was made, and on the same terms which had been offered (Clarke & Clarke, 2016). Where Party Y makes changes in the terms of offer, the original offer expires owing to the counter offer having being drawn, and this was held by the court in the Hyde v. Wrench (1840) 3 Beav 334 case (Marson & Ferris, 2015). It is also important to note that the acceptance has to be communicated in a proper manner, and Felthouse v Bindley (1862) EWHC CP J35 provides that when the party remains silent on an offer, it is not considered as an acceptance (Andrews, 2015).
Part B
Another important aspect of acceptance is the ‘date of acceptance’ which is considered as the date on which the Party X obtains the acceptance of Part Y. However, the condition is changed when it comes to the ‘postal rules of acceptance’ (Ayres & Klass, 2012). Under these rules, the ‘date of acceptance’ is taken to be the date on which Party Y posts their acceptance through a letter with the postal office, as this office is given the status of the Party X’s implied agent (Elliot, 2011). A leading example of the applicability of this concept can be seen in Adams v. Lindsell (1818) 106 ER 250 where the court considered the drawn contract to be valid and thus, enforceable (E-Law Resources, 2017).
The next step with regards to the creation of a contract is the consideration. When it comes to the consideration, it is crucial that it is not past, and instead is present. Also, the same has to be sufficient and not adequate. This means that the value of consideration can be anything which the parties mutually agreed upon. However, a crucial requirement in this regard is for the consideration to have legal validity. Without the element of consideration, the contract cannot be deemed as a valid one (Frey & Frey, 2005).
The next contractual element is the presence of intention. There is a need for the contracting parties to have a very clear intention of entering in legal relations, which would give rise to legal obligations. This has to be followed by the presence of contractual capacity by the parties. In this context, the parties need to have the legal standing of entering in a contract, which is in terms of their legal age and soundness of mind. The last requirement relates to the clarity in the terms of the contract, so that the contract is not ambiguous (McKendrick & Liu, 2015).
Before analysing the case of each individual separately, there is a need to evaluate the offer which had been made. An offer had been made in this case by Alan, to all the students of Kaplan, apart from his friends, and this offer was made through the Facebook post of Alan on 01 November. This is being treated as an offer based on Carlill v Carbolic Smoke Ball Company as the offer was made to a large group of people and anyone could accept the offer by fulfilling the conditions laid down in the offer. This also showed the intention of Alan to enter into legal relations.
When it comes to the case of Bernard, his reply over the Facebook post of Alan would be considered as a counter offer owing to the change in consideration value. This resulted in the expiration of original offer based on Hyde v. Wrench. This counter offer was declined by Alan and he again stated that the original consideration price. However, this offer was still open as Alan had been made another offer, which was still to be accepted by Alan. So, Bernard accepted this new offer of Alan and posted his acceptance on 05 November, which would be the ‘date of acceptance’ based on postal rules. As Alan looked out for the money, the intention was clearly present. The other elements of contract formation have been assumed to be present. And so, it can be concluded that a contract was formed in between Alan and Bernard.
When it comes to the case of Charleen, the offer had never been made for Charleen as she was not yet a student of Kaplan and was sister of Alan, instead of being his friend. Also, when the offer had been made by Charleen for purchase of book to Alan, the same was not accepted as Alan remained silent, and silence is not acceptance as per Felthouse v Bindley.
In the case of Damien, the offer would be deemed to have been made to him as he studied at Kaplan. His acceptance was attained on 04 November when he gave the cash amount to Alan, as a result of which a contract was created between the two individuals.
Hence, a contract had been formed between Alan-Bernard, Alan-Damien but not between Alan-Charleen.
The second issue relates to the rights of Bernard against Alan.
To reiterate what has been covered in the introductory segment, when the promise made under a contract is not upheld, a breach of contract takes place. And this gives the parties the right of raising a claim before a competent court, whereby they are awarded remedies in form of compensation for the loss, or could other the other party to do something, or refrain from doing something, in form of specific performance and rescission order (Paterson, Robertson & Duke, 2012).
The contract law provides certain vitiating factors which render the contract voidable at the option of the aggrieved party. Misrepresentation is one of such vitiating factors, in which a false statement is made by Party Y to Party Y to induce Party Y in entering the contract. This false statement has to be a statement of fact and if the same is of opinion a case of misrepresentation cannot be upheld (McKendrick, 2014).
The case study highlights that a promise had been made by Alan to give Bernard the handwritten notes and the university book. However, this contractual promise was not upheld, as he was not given the handwritten notes, resulting in a breach of contract. So, Bernard can make a case of breach of contract against Alan. He can also make a case of misrepresentation claiming the false representation of Bernard with regards to being given handwritten notes, which were never provided to him.
Hence, Bernard has the right of making a case of misrepresentation and breach of contract against Alan.
The third issue relates to the rights of Charleen against Alan.
As covered in previous segments.
Without a contract being formed, a breach of contract cannot be claimed.
Hence, there are no rights available with Charleen in this case.
The fourth issue relates to the rights of Damien against Alan.
As covered in previous segments.
The case study highlights that a promise had been made by Alan to give Damien the handwritten notes and the university book. However, this contractual promise was not upheld, as he was not given the university book, resulting in a breach of contract. So, Damien can make a case of breach of contract against Alan. He can also make a case of misrepresentation claiming the false representation of Damien with regards to being given university book, which were never provided to him.
Hence, Damien has the right of making a case of misrepresentation and breach of contract against Alan.
When a dispute is raised between the parties, they have the option of going before the court by opting for litigation method for solving their dispute. As discussed in the previous segment, Bernard and Damien can go to the court against Alan for misrepresentation and breach of contract. However, instead of option for litigation, they can opt for the different methods of Alternative Dispute Resolution (ADR). The three key ADRs are arbitration, mediation and conciliation (Nolan-Haley, 2013).
Arbitration is a method in which the parties select an arbitrator, who arbitrates the disputed issue. Where the parties cannot select a common arbitrator, they can each elect one arbitrator and then these elected arbitrators elect a final arbitrator, and then the case is arbitrated by an arbitration panel. The main benefits of arbitration include the method being cost effective, not only in monetary terms, but also with regards to the time window, as litigation takes a long period of time to solve a single dispute. And then the litigation decision is followed by lengthy appeals. The arbitration proceedings are private and confidential, which is not the case in litigation. The disadvantage of this method is that the arbitration award requires confirmation by court to be legally binding (Gramberg, 2006).
Coming to the next method of ADR is the method of mediation. In this method, the parties resort to a mediator who attempts to mediate the method by use of diverse negotiation techniques. Like arbitration, these proceedings are also confidential and cost effective. And as is the case with arbitration, the mediator cannot force the order on the parties. Also, the denial of mediation result would mean that the matter has to be referred to court, which means more costs than the parties could have saved (Ware, 2016).
The last method is that of conciliation where the dispute is attempted to be resolved by conciliator. In this method, the parties can suggest the possible solution to the dispute, thus giving more control to the parties and resulting in effective resolution of dispute, as the parties are involved. The parties are met with separately by the conciliator to solve the dispute. The advantages and disadvantages of this method are similar to the other two methods. Also, a conciliator cannot force the parties to speak the truth or force the production of any evidence (Kramer, 2016).
References
Gibson, A., & Fraser, D. (2014). Business Law 2014 (8th ed.). Melbourne, Pearson Education Australia.
Andrews, N. (2015). Contract Law (2nd ed.). UK: Cambridge University Press
Ayres, I. & Klass, G. (2012). Studies in Contract Law (8th ed.). New York: Foundation Press.
Bonell, M.J. (2009). An International Restatement of Contract Law: The Unidroit Principles of International Commercial Contracts (3rd ed.). New York: Transnational Publishers, Inc.
Clarke, P. & Clarke, J (2016). Contract Law: Commentaries, Cases and Perspectives (3rd ed.). South Melbourne: Oxford University Press.
E-Law Resources. (2017). Adams v Lindsell (1818) 106 ER 250. Retrieved from: https://www.e-lawresources.co.uk/Adams-v-Lindsell.php
Elliot, C. (2011). Contract Law (8th ed.). London: Pearson.
Frey, H P. & Frey, M A. (2005). Essentials of Contract Law (3rd ed.). Portland: Delmar Cengage Learning.
Gramberg, G.V. (2006). Managing Workplace Conflict: Alternative Dispute Resolution in Australia. New South Wales: The Federation Press.
Kramer, H. S. (2016). Alternative Dispute Resolution in the Work Place. New York: Law Journal Press.
Latimer, P. (2012). Australian Business Law 2012 (31st ed.). Sydney, NSW: CCH Australia Limited.
Marson, J., & Ferris, K. (2015). Business Law (4th ed.). Oxford: Oxford University Press.
McKendrick, E. & Liu, Q. (2015). Contract Law: Australian Edition. London: Palgrave Macmillan
McKendrick, E. (2014). Contract Law: Text, Cases, and Materials (6th ed.). Oxford: Oxford University Press.
Nolan-Haley, J.M. (2013). Alternative Dispute Resolution in a Nutshell (4th ed.). Minnesota: West Academic.
Paterson, J.M., Robertson, A., and Duke, A. (2012). Principles of Contract Law. 4th ed. Rozelle, NSW: Thomson Reuters (Professional) Australia.
Treitel, G H. & Peel, E. (2015). The Law of Contract (14th ed.) London: Sweet & Maxwell.
Ware, S. (2016). Principles of Alternative Dispute Resolution. Minnesota: West Academic.
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