Offer and Acceptance in the Law of Contract
Generally, Harrison needs to know that for a contract to exist and to be valid more weight is directed to the intention of creating legal relationship by all parties involved, the law of contract that applies in businesses is generally presumed by the courts that there is an intention to create legal relations unless the parties insert a clause that their agreement shall not be binding by law but shall be binding in honour only. Therefore for this case Harrison he could have considered the following applications
Offer and Acceptance
In this case of Harrison there exist the rule of offer and acceptance, whereby the law provides that an offer may be made to a specific person or to any member of a group of persons but it cannot form the basis of a contract until it has been accepted by an ascertained person. In this case we find that Harrison placed an advertisement in the local newspaper to sell his antidue stamp collection for 300, this clearly indicates that he made his offer to the general public not to a particular person. The law provides that offers made by advertisements are the commonest form of offers made to a number of individuals and can be accepted by anyone just by acting on them. Here we find that on that particular day, Amy phones Harrison telling him that she is willing to buy the collection of stamps for 280, this clearly shows that Amy made an acceptance when she decided to call Harrison, Harrison responds by telling her that he will have to make some considerations then he will have to communicate back to her after making a decision, so here the offer was not clearly accepted by the offeror.
According to the law Harrison should know that an offer may be made by the word of mouth, in writing or by conduct also an offer can only be accepted by the person to whom it is made, the offer can only be accepted in different modes, which is it can be accepted orally, in writing or by conduct. The law provides that in order to make a contract binding the acceptance must be communicated and mere mental intention to accept it is not sufficient. In this case of Harrison we find that there was communication between him the offeror and Amy the offeree, where she said that she accepts to buy the stamp collection for 280. This is clearly indicated in the case of Felthouse v Bindley, 1862 where F wrote to his nephew offering to buy one of his horses adding if I hear no more about him I consider that the horse is mine at 30.15 shillings the nephew did not reply, but told Bindley, an auctioneer, to keep the horse out of the sale of his farm stock as it was sold to the plaintiff. Bindley sold the horse by mistake and F sued him for damages. Held that as the nephew had never communicated his acceptance to F, there was contract of sale, and so the auctioneer was not liable. Therefore in the case of Amy, she can sue Harrison for the damages caused to her since she had communicated her acceptance to buy his stamps.
Declaration of Intention
By placing an advertisement in the local newspaper we find that Harrison made a declaration for his intention. The law provides that where a person expresses or declares his intention to do a thing or an act, it does not bind him to another person who suffers damage because he fails to carryout his intention despite the fact that someone relied on his declaration and acted on it. The same applies in the case Amy can not sue Harrison as a result of him declaring his intention of selling the stamps to her which he later sold to another person
This is clearly indicated in the case of Harris v Nickerson, 1873 N, an auctioneer, advertised that there would be a sale of office furniture. H, a prospective buyer, travelled from London to attend the sale, but all the furniture was withdrawn. H thereupon sued the auctioneer for the loss of time and traveling expenses. Held that the auctioneer was not bound to sell the furniture as he was merely stating his intention to sell, not making an offer that by acceptance could be turned into a contract
Consideration
Harrison should know that in his case consideration was applied. He needs to know that the contemporary law provides that a bare promise is not binding unless it is an act or supported by consideration or is in the form of specialty contract. Consideration was defined in Dunlop v Selfridge as an act or forbearance of one party, or a promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable. A simple contract is not legally binding unless it is supported by consideration, so that if A promises to give his watch to B, he cannot enforce As promise if A changes his mind. But if A agrees to sell his watch to B for ten pound, the contract is binding on both parties. There is a following benefit to each of the parties i.e. A gets ten pounds and B receives a watch.
In the case of Harrison we find that on Wednesday he receives a call from the Guildhall Fine Art Galleries who indicated their interest in buying the stamps for 400, Harrison did not accept to give out the offer but instead said to think about it, after which he calls Amy to ask whether she has raised the funds for the stamps, where she says not yet. For Harrison not to miss the high price given by the guildhall galleries he calls them and accepts to sell them the stamps at the price they were willing to give him.
In this case we find that Harrison practiced consideration by reviewing the economic benefits of selling the stamps guildhall galleries, an opportunity he could not wish to waste as a result of waiting upon his friend Amy to buy them at a lower price. Though consideration is required in every simple contract, it need not be adequate as long as it has some economic value. Even as an act or omission of small value can be consideration, but a mere sentimental motive for making the promise will not make it binding. For example a promise to pay 500 pounds by A towards a fundraising project in his area is not enforceable as the consideration is merely sentimental.
This is clearly indicated in the case of Bainbridge v Firmstone, 1838 the plaintiff owned two boilers and agreed to allow the defendant to them, provided they were returned in as good a condition as they were lent. The defendant dismantled the boilers in order to weigh them, and returned them in that state. The plaintiff sued for damages, and the defendant pleaded the absence of consideration for his promise. Held that the consideration was that the plaintiff at the request of the defendant allowed him to weigh the boiler, and he was held liable to pay damages.
Harrison is therefore advised to note that for consideration to support a simple contract may be either executed or executory, but it must not be past. In this case the executed consideration is some value already given by the promisee to the promisor e.g. purchase of goods on credit. The seller has performed his side of the obligation in delivering the goods to the purchaser.
Executory consideration is a promise to do something in the future for example in the above illustration, the consideration for the purchaser of the goods is executory until he pays for the goods received. It may be sometimes executory on both sides, such as where the seller agrees to deliver the goods on a future date and the buyer promises to make the payment on delivery.
Harrison is advised to put in mind that there are rules that should apply in terms of consideration which are as follows Consideration must be real although it need not be adequate. The statement means that it must have some values in the eyes of the law the consideration must not be past. This means some past act or forbearance which took place before the promise is made. Consideration must move from the promisee. This statement means that no one can enforce anothers promise unless he has been a party to a contract, and provided consideration to the promisor. In other words a stranger to consideration cannot sue on the contract although made for his benefit.
Revocation of an Offer
The law provides that once an acceptance is made it cannot be revoked. An offer may be revoked by an express notice before it is accepted. But acceptance can not be revoked in any circumstances. This means that the moment a person expresses his acceptance of an offer, that very moment the contract is concluded. And it does not matter whether the acceptance is by word of mouth or in writing and sent by post. In this case we find that Amy communicated her acceptance through telephone through which Harrison accepted to give her the offer. According to the law we find that Amy has a right to claim for the stamps, since she had actually communicated her acceptance.
In the same case we find that Harrison had terminated the offer to Amy who had accepted to buy the stamps, this offer was terminated by revocation meaning it was actually withdrawn by Harrison, we find that the law provides that revocation of an offer must be communicated to the offeree, though not necessarily by the offeror himself, it also provides that it is sufficient if the offeree comes to know of it through any reliable source meaning that a third party should be involved through whom such a notice of revocation or withdrawal is passed so that the offeree can not accept the offer. The case clearly indicates that Harrison did communicate to Amy about his revocation of the offer by calling her but due to her absence he left the message on the answering machine, this proves that Amy cannot sue Harrison on this issue of buying stamps since he had explained every thing on the answering machine, which Amy claims to have gotten the message after she had sold her vehicle with an intention of buying Harrisons stamps this makes it clear that Harrison carried out his obligation of revoking his offer to Amy, thus- he can not be sued for any damages caused to Amy which came up as a result of her not answering his phone call. This is best explained in the case of Dickinson v Dodds, 1876 on Wednesday, the defendant gave the plaintiff a written offer to sell him his house for 800. The offer was to be left open until next Friday 9.a.m. on Thursday the defendant sold the house to someone else. On that very evening of Thursday, the plaintiff was told of the sale by a third party but before 9 a.m. on Friday, the plaintiff delivered his acceptance to the defendant, which the defendant refused to receive. It was held by the court that there was a proper revocation of the offer and the plaintiff could not accept it. Amy is therefore advised to know that as the result of the use of revocation of the offer by Harrison, she can not therefore claim for the damages caused to her.
Accord and Satisfaction
In the case of Harrison and guildhall galleries who claim to take the stamps at a lower price than the one agreed upon since they alleged that some of the stamps were forgeries, this makes the representative of the guildhall galleries to force him to take the money or leave it, as a result of fulfilling his needs for the money, Harrison accepts to sell the stamps at a lower price. We have stated earlier that consideration is necessarily not only for making the contracts but also for their discharge. It is however possible to discharge an existing obligation by an accord and satisfaction. Accord and satisfaction occur when one party has performed his obligations under the contract and agrees to accept something different from that to which he is entitled under the contract in discharge of his rights. The same applies in the case of Harrison and Guildhall galleries where He accepts to sell the stamps at a lower price than the one they agreed upon in the beginning. The new agreement is the accord and the carrying out of it is the satisfaction. It is essential that if the new agreement is to be enforceable, consideration should be given by one party in return for the surrender of his rights under the original contract by the other. As a result of accord and satisfaction Harrison is therefore in a position to discharge the contract with guildhall galleries without claiming for the damages caused by the Galleries. Thus the promise of payment of a lesser sum than one which is already due cannot -5 b
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