LAWS2201 Legal Framework Of Business

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LAWS2201 Legal Framework Of Business

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LAWS2201 Legal Framework Of Business

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Course Code: LAWS2201
University: The University Of Western Australia

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Country: Australia

On 1st February, Arthur advertises his computer for sale in the local paper, giving information on the computer and contact details Ben reads the advertisement, and on 2nd February posts an offer to buy the computer for $2000 This letter reaches Arthur on the 4th February.
 On the 5th February. Arthur sends a letter to Ben stating. ‘Please advise if payment is by cash or cheque” In response the next day. Ben posts a letter to Arthur stating “My price is cash on delivery.’ This letter reaches Arthur on 8th February. 
On the 10th February at 2pm. Arthur sends a letter to Ben stating “I agree to your offer to buy my computer as specified for $2000 cash on delivery’ This letter reaches Ben at 3pm on the 11th February However. on the 9th February. there is a change of plans by Ben. As a result, Ben sends a letter to Arthur at 1pm on the 9th February seeking to cancel the earlier offer and stating that he was now only willing to purchase the computer for $1800 cash on delivery This letter is received by Arthur at 4pm on the 10th February.
 Is there a valid simple contract between Ben and Arthur for the computer? Justify your response citing case authority whenever relevant When answering this question. fully consider the relevant Common Law principles, rules and propositions in the Law of Contract Do not consider any matters that might arise in the circumstances under other relevant legislation 

Whether a contract has formed between Ben and Arthur?
A valid contract is formed after fulfilment of its essential elements. Firstly, an offer is made to another party regarding doing or not doing certain activities. A valid offer bound the party into a legal relationship after acceptance (Gibson, 2018). Offer is different from an invitation to treat which cannot be accepted by parties. Advertisements are an invitation to treat as given in Partridge v Crittenden [1968] 2 All ER 421 case. A request for information is also different from an offer which cannot form a contract between parties. A counter-offer terminates a contract after which the original offer cannot be accepted as Hyde v Wrench [1840] 3 Beav 334 given in the case. Acceptance for an offer must be certain and communicated by the party to become effective. The postal rule provides that acceptance is considered valid when a duly stamped and addressed letter is put in the post box.
The advertisement of Arthur was not a valid offer rather it was an invitation to treat. An offer was given by Ben for $2000. Arthur requested form information in the second letter which was not an acceptance, and a contract is not formed by the reply of Ben. Arthur sends a valid acceptance on 10th February, however, Ben sent a counter-offer on 9th February for $1800. As per postal rule, Ben’s letter was sent first, and the counter-offer rejected the original offer.
A valid contract has not formed between Ben and Arthur.
Gibson, A. (2018). Business Law (10th ed.). London: Pearson.
Hyde v Wrench [1840] 3 Beav 334
Partridge v Crittenden [1968] 2 All ER 421

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