AREA In the formation of contract, the basic principal

AREA
OF LAW

The
first part of the scenario is related to the formation and element of contracts
i.e. invitation to treat, offer, acceptance, consideration, counter offer,
revocation of an offer, agreement, legal capacity etc.

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ISSUES

The
following principle issues are being considered to analyze that whether Will has
formed the contract with BIMSoft (hereafter ‘BS’) or AutoBIM (hereafter
‘AB’)

BS
issues:

·        
Whether Sean quote is an offer?

·        
Whether Will have the legal capacity to enter into a contract
with BS or AB and conduct the misrepresentation if does not have legal capacity
in the company?

·        
Whether Will Telephone to BS and place and record the
order over the machine is the acceptance and resultantly Contract is concluded?

·        
Will Telephone to Secretory and withdraw the order is revoked
of acceptance?

·        
Whether acceptance is revoked as Sean has not yet listened
to the phone recording?

AB
issues:

·        
Whether AB advert by email to Will is constitutes an
offer, advertisement or invitation to treat?

·        
Whether Will telephone to AB and places an order is the offer
or acceptance or rejection of the offer and if acceptance was made then whether
Will formed the contract with AB?

·        
Is there any counter claim can be raised from AB against Will?

RULES;

Contract formation,

A
Contract will come into existence if an agreement has been reached. The test
whether an agreement has been reached is depends on external evidence, the
court will consider the circumstances of case when a reasonable man would think
that an agreement has been reached and a contract was created1

A
Contract is an exchange of the promises that constitutes a legally binding
agreement between individuals or corporate entities or a mixture of both. The contract
will be concluded when an offer made by one party (the offeror2) and accepted by another
(the offeree), it will indicate that offeror willingness to enter into a
contract on certain terms without further negotiations. There must be the meeting
of minds (consensus in idem) on all relevant points in each contract.

In
the formation of contract, the basic principal is that there must be an offer,
followed by an acceptance meeting the terms of the offer. A Contract can be
made verbally, In writing or by conduct but in all cases, the proof of a valid
offer and acceptance must exist, generally, the England, Wales and Scotland
courts does not require contracts to be in writing.

Offer:

An
offer must be communicated to the other party. An offer is a proposal from one
party with the intention to legally bond with definite terms like if it is
accepted legally binding contract will be concluded3.

An
offer must be illustrious from an invitation to treat4 which is mainly an
expression of willingness to negotiate. An invitation to treat is not an offer
and cannot be accepted in law as the invitation to treat can be described as an
invitation to enter into negotiations. The offer can be accepted or rejected5. An advertisement in
website, newspaper, a magazine or on TV also comprise an invitation to Treat6    

Acceptance;
Acceptance of the
offer must be communicated and is only valid if it is communicated by a person
who has the authority to do so7. The offeree is
responsible for ensuring that acceptance is communicated to the offeror8.  The acceptance must be unconditional and to
be relevant to the strict terms of the offer. An acceptance will be effective
only when it has been communicated to the offeror. The general rule of
acceptance is offer will be accepted when received by the offeror means when
acceptance is intimated9

A
telephone is clearly instantaneous communication when you get to reply to your
telephone calls, most probably voice mail message is the message that i am
accepting the offer, communication the person phone they have blinking red
light but some time voice not listen to for a day or two, this kind to be
effective communication.

Revocation:
The offer can be
revoked at any time before acceptance to be made. The rule applies even when
offeror has promised to keep the offer after open for a particular period of
time10. The renovation of an
offer must be communicated to the offeree11.

Counter
offer: The counter
offer will occur when the offeree attempts to vary the terms of the offer12. counter offer will
destroy the original offer 

Information
of Request (inquiry): Some
request are required some further information, the offer will not be rejected
and also will not be treated counter offer, in case an offer will be remain
open until will be accepted.

APPLICATION:
  

Ø 
Whether Sean quote was offer?

In one
aspect Sean, quoted price £10,500 can be considered as an offer however, as per
given scenario Sean price is including the installation and appropriate
training, therefore, court may consider that appropriate training is covering
the aspects of certainty, therefore, Sean quote may be proved invitation to
treat not the offer.

This
can be happen when Sean will raise the counter claim against Will and claimed
that Will has concluded the contract with BS as he has accepted his offer and placed
the order over the recording machine.

Will
can defend such statement in the court that as the offer condition for the
appropriate training was not clearly demonstrated by Sean therefore, he again raised
the inquiry at the same time whether appropriate staff training means training
of site staff up to six months is included in the price £10,500, hence contract
is not yet reached.     

 

Ø 
Whether Will have the legal capacity to enter into
Contract with BS or AB and conduct the misrepresentation if does not have legal
capacity in company

 

In lieu
of given scenario legal capacity of Will is also one of the questions here, the
legal authority of Will to enter into contract on behalf of the company is not
clearly outlined which court may can also consider and declared the contract set
aside the contract if formed. So, in this case BS and AB may be in the position
to raise the counter claim that Will has made the misrepresentation as Will is not
legally enter into contract on behalf of the company as his name was not
‘articles of association; and ‘memorandum of association.

 

Ø  Whether AB
advert by email to Will is constitutes an offer, advertisement or invitation to
treat.

 

Advertisement
email can be an offer13 or invitation to treat14 as well, Court will look
into facts that either AB advertisement was the invitation to treat or AB
invite Will to make them offer, considering the given scenario, AB has given
the invitation to treat to the potential contractors rather than offer, and it
was up to the contractor who wants to offer the AB for acceptance

 

Ø 
Whether Will telephone to AB and places an order was offer
or acceptance or revoked of offer and if acceptance was made then whether
Contract formed with AB?

 

Initially,
Will has given the offer to AB for the amount of £9,000 which converted to rejection
after the discussion with the technical staff as price is reached £12000 (most
probably due to training of staff) as offer is rejected resultantly, Will has
not concluded the contract with AB.

 

However,
AB can make the counter claim that Will has accepted our offer and placed the
order at a price £9,000, therefore, a contract is concluded.

 

Will
maybe defend his position in the court that terms of offer were not certainly outlined
therefore, I have changed my mind and rejected the offer, therefore the contract
is not concluded and obviously court will look carefully the evidence and
clarity of intention of both parties and distinguish whether AB advert was
offer or invitation to treat15and if it was offer of AB
(apparent here) then either Will has made the acceptance or not and this is
because16:

·        
Will reserve his position or have the option of rejecting
 any offer following invitation to treat
of AB

·        
It is commercially not justified that AB under an
obligation to supply the software all those contractors who replied.  

          

Ø 
Whether Will Telephone to BS and place and record the
order over the machine was the acceptance and resultantly Contract was
concluded?

 

It is
appears that Will telephone to BS is instantaneous communication of acceptance,
the general principle that instantaneous communication is being effective upon
receipt17, but considering the
scenario Will called to BM is not the valid acceptance although it is also not
rejection as Will raised the inquiry nor rejection or the counter offer, as per
the circumstances it is still open offer which still to be accepted after the
clarification of inquiry.

 

Ø 
Will Telephone to Secretory and withdraw the order was
revoked of acceptance?

Will acceptance with the inquiry has
not yet reached to offeror (Sean) and before listen the recording Will has
withdrawn the acceptance which was given with the inquiry, therefore, acceptance
is revoked and contract has not yet reached with BM.

Ø 
Is there counter claim from BS to Will keeping in mind
acceptance was made by Will after recording the message on machine.

Court may apply the case18 however BS can make the
counter claim and may defend that in their case acceptance has been made
therefore, contract has been concluded.

Will may defend his case that offer is
still open however court will distinguish either it was counter offer or
inquiry     

CONCLUSION:

As regards the scenario at hand, it is demonstrated that
Will placing order over to recording machine is an inquiry nor the acceptance
of offer, and offer was still open for acceptance. It is also rule that offer,
accepted should be reached to offeror as it is not yet listened by the Sean therefore,
offer acceptance was not made and resultantly contract is not concluded,
however as aforementioned BM can make the counter claim that as Will has
acceptance the offer, as he has recorded the audio message within the working
hours and upon received contract has been reached. In the second scenario of AB,
it’s straightforward that AB was invitation to treat and did not made offer which
was rejected by Will therefore, no contract is formed as there is no valid
offer. So, in conclusion if no acceptance established mean no contract was
reached which can be legally enforceable. 
However court will look the evidence of both parties and will distingue
whether offer is still open or acceptance as been made.   

Advise Quotation 2

Area of Law:

Vicarious liability (Due to negligence one employee) ,
Contributory negligence, Tortious remedies  

Issue

Ø  Sara Claim against Vishnu
Employer.

Ø  Whether Vishu is the
employee of BS

Ø  Whether Sara is eligible to
claim the liability against BS

Ø  Whether Sara can claim the
liability against the hospital due to negligence or special care as she was
already injured.

Ø  The Doctor advises Sara is
unfit for the three months, in this case either Sara liability will exceed more
than three months. Therefore, how much and what is way of compensation for
Sara, especially when both parties will be committed to tort. 

Ø  Whether Sara also getting
some benefit from the football team as a professional member, can Sara claim
such charges from the hospital and BS

Ø  Sara Also school student
when she has paid the school semester fee whether Sara is also liable to get
such charges.

Rule:

With regard to ‘vicarious liability’ in practice, a
person is liable for his wrongdoing acts but in certain cases, a person could
be liable for wrongful acts of another. Mostly it is happening in employment
situations where an employer is vicariously liable for wrongdoing acts of his
employees if proved that he cause the injury to another person. The other
person can be another employee of the same employer or it can be an also different
person. In order to determine either employer is vicarious liable it is
essential to establish that employee was committed in tort, and elements of
vicarious liability are found at the time of wrongful acts of employee, there
is no need to reflect that employer itself was at fault to be vicariously
liable. Mostly employee tort found in the negligence’s cases but employer is liable
for another kind of tort as well, for example an employee harassment by another19.

The UK Supreme Court has established the close connection
test in the case20 and the traditional tests of vicarious liability have
been further modified through further cases21. In case22 Supreme Court has adopted two stages approached to
determine the vicarious liability

In current scenario, Sara has to prove the following test
to succeed in his claim which ware established by the court in case23  

APPLICATION:

Stage 1 – Essential Elements of the Relationship

In order to determine whether a case match the first stage of the
test the Supreme Court applied the five policy criteria

(i)           
the employer is more likely to have the means to
compensate the victim than the employee and can be expected to have insured
against that liability;

(ii)          
the tort will have been committed as a result of an activity
being taken by the employee on behalf of the employer;

(iii)         
the employees activity is likely to be part of the
business activity of the employer; (iv) the employer, by employing the employee
to carry on the activity will have created the risk of the tort committed by
the employee;

(iv)        
the employer, by employing the employee to
carry on the
activity will have created the risk of the tort committed by the employee

(v)
the employee will, to a greater or lesser degree, have been under the
control of the employer

Stage 2 – Connection between the tort and the relationship between
the defendant and the tortfeasor

The claimant must establish that the employee was acting during
the course of employment when committed to tort as established in Various
Claimant.

Whether Sara can claim the vicarious
liability against Vishnu or his Employer (BS)?

In accordance of scenario in hand, the employer and employee
relationship has been established as Vishnu is the employee of BS and visited
the premises of W for the installation of software on behalf of employer
business activity and create the risk and committed the tort and albeit under
the control of Employer and cause the injury to Sara rise to vicarious
liability. 

BS can also make the counter claim and can defend the case by
involving the Novus Actus Interveniens and resultantly can be liable only for
the injury caused due to negligence of his employee nor further damages caused
by the hospital staff.  

Whether Sara can claim the vicarious
liability against Will?

It is not definite that Sara in position to claim against will as
Will does not know the following

1.   
A contract has been reached with BS and

2.   
BS engineering team is coming to visit his
premises.

Whether Sara can claim the vicarious liability against Hospital?

In regard of scenario, Sara may also claim against the hospital,
against the ambulance negligence of duty of care but in case Hospital may also
make the counter claim that test for the remoteness of damage are not
fulfilled. i.e reasonable foreseeability test24 

CONCLUSION

Following are the advice to Sara to establish his legal claim

1.   
Sara can claim the liability against Vishnu
and his employer but Court will not compensate the full liability as BS can
make the counter claim due to broken the injuries claim.

2.   
Sara can also claim against hospital due to
negligence of ambulance driver but beware for counter claim by the hospital
when remoteness of damages test to be applied.     

Tort Remedies,

It is seems that Sara will be able to prove that she is liable for
the compensation for her injury and loss in shape of money25, the
general principal that the victim to be returned prior to loss or injury which
is called restitution in integrum26 . Sara
pecuniary loss27
will include for the loss of earning covering the gross income which she will
earned when she was not injured28 for the
duration of three month or may be more subject to final declaration of court
depending on evidence which may include the following loss of earning29 

1.   
Earning from the football team.

2.   
Potential Loss of future earing capacity if
will be unfit for football playing in the future.  

3.   
Loss of School semester fees

4.   
Hospital expenses if she treated in private
hospital

5.   
Job earning if school semester is not missed

And
under the non-pecuniary loss, she may deserve the claim damages for the pain30 and suffering,
amenity loss31.
However, Sara cannot recover the loss from the all the parties, like BS,
hospital and any other parties which may contributory32 (effect
on quantum) after the applicable deduction33 like
insurance34
and other social benefits.35 But It is
finally depand on court as not pecuniary may be declined by the court36and will
be limited to physical and financial losses which may further extended to range
of exception37.

 

Bibliography

Books

Taylor
R & Taylor D, Contract Law Direction (6th edn, Oxford 2017)

Stone
R, The Modern Law of Contract (12th edn, Routledge 2017)

McKendrick
E, Contract Law (11th edn,Palgrave Macmillan 2015)

Arvind
T, Contract Law (1st  edn,
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C, Quinn F, Contract Law (11th edn, Pearson 2017)

Richards
P, Law of Contract (13th edn, Pearson 2017)

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T & Fitchen K, Optimize Contract Law (2nd edn, Routledge 2017)

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R & Devenney J, Text, cases and materials on Contract Law (4th edn,
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F, Tort Law ( 1st edn, Pearson 2017)

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C, Key Facts Key Cases Tort Law (1st edn, Pearson 2014)

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ARTICLES

Nolan, D, offer and acceptance in the electronic age in Contract
formation and parties(Burrows & Peels eds, oxford, 2010) 61.

1
Smith V Hughes 1871 LR 6 QB 597 , Forddell Estates LTD v Delitte 2014 CSOH
55 (Scotland); Bieber V Teathers Ltd 2014 EWHC 4205 (England and Wales)

2 Catherine
Elliott and Frances Quinn, Contract Law (11th edn, Pearson 2017) 49.  The person making an offer is called the
offeror, and the person to whom the offer. G.H. Treitel, The Law of Contract
(Sweet & Maxwell, London, 2003) 8.), See Cambridge dictionary definition of
Offeror (‘a person, company, or organization that offers to buy something from
another person, company, or organization’), Offeree (a person or an
organization that is offered something, especially the opportunity to buy or
sell shares’).

3 Biggv
Boyd-Gibbins Ltd 1971 1 WLR 913; 1971 2 All ER 183, Richard Taylor & Damian
Taylor, Contract Law Direction (6th edn, Oxford 2017) 23, , Catherine Elliott
and Frances Quinn, Contract Law ( 11th edn, Pearson 2017) 12

4 Grainger
v Gough 1896 AC 325; Carlill v Carbolic Smoke Ball Company 1892 2 QB 484;
Partridge v Crittenden 1968 1 WLR 1204; 1968 2 All ER 421; Clifton v
Palumbo 1944 2 All ER 497; Harvey v Facey1893 AC 552; Spencer v Harding
(1870) LR 5 CP 561;  Richard Taylor &
Damian Taylor, Contract Law Direction (6th edn, Oxford 2017) 23, Richard Stone
and James Devenney, The Modern Law of Contract (12th edn, Routledge 2017) 35, Kathrin
Kuhnel-Fitchen and Tracey Hough, Optimize Contract Law (2nd edn, Routledge 2017)
6, Catherine Elliott and Frances Quinn, Contract Law ( 11th edn,
Pearson 2017) 49, TT Arvind, Contract Law (1st 
edn, Oxford 2017) 54,574, Paul Richards, Law of Contract (13th edn,
Pearson 2017) 19,  Richard Stone & James
Devenney J, Text, cases and materials on Contract Law (4th edn, Routledge 2017),
Ewan McKendrick, Contract Law (11th edn, Palgrave  Macmillan 2015) 26. Fafinski S
Emily, Contract Law ( 4th edn,Pearson 2015) 5.

5  Harvey v Facey 1853 AC 552 ( Harvey(H) sent
a telegraph to Facey(F) saying; ‘will you sell me bumper Hall pen (BHP)
telegraph lowest cash price, F replied’ lowest price for BHP is £900′ H replied’ we agree to pay £900 for BHP’. F would not go ahead H
brought an action against him, H action failed. The court held that F reply was
response to a request for information and not an offer. He was simply
stipulating the price he would sell at if he decided to sell.

6
See the case Let us consider Partridge v Crittenden 1968 1 WLR 1204 (An
advertisement was placed in a magazine advertising bramble finches for sale at
25 shillings each. The defendant was charged under the protection of Birds Act
1954 for offering live wild birds for sale Held: The advertisement was an
invitation to treat, so the defendant was not guilty. He had not ‘offered’ wild
birds for sale. See other cases; Harris v Nickerson 1873 ; Carlill v Carbolic
Smoke Ball Co 1893 1 QB 256

7 Powell
v Lee (1908) 99 LT 284

8

9
Entores Lts V Miles Far East Corp 19552 All E.r. 493, Brinkibon Ltd V Stahag
Stahl1982 1 All E.r 293         

10 Payne v Cave 1789 and Routledge v
Grant (1828),

11
Byrne v Van Tienhoven 918800 5 CPD 344 (The defendant posted a letter in
Cardiff on 1 October offering to sell tinplate to the plaintiffs in New York.
The offer was received on 11 October and immediately accepted by telegram. On 8
October the defendants posted a letter of revocation which arrived with the
plaintiff on 20 October. HELD: he contract came into force when the telegram
was sent on 11 October. The letter of revocation could only be effective upon
receipt. The date of receipt was 20 October. This date fell after acceptance
had taken place. Byrne v Van Tienhoven(1880) 5 CPD 344, Dickenson v Dodds(1876)
2 Ch D 463, Routledgev Grant (1828) 4 Bing 653, Erringtonv Errington and Woods
1952 1 KB 290.

12
Hyde v Wrench 1840 49 ER 132( Case precedent)

13
Lefkowitz V Greatminneapolis Surplus Store 1957 86 NW 2d 689 (as advertisement
for three fur coats for $ 1 each, first come, first served was held to be an
offer. Whilst US law is obviously not binding in England and Wales, it is often
used as an example of how a case might be decided in England and Wales)

14 Partridge
v Crittenden 1968 2 All ER 421, HC QBD

15
Gibson V MANCHESTER City Concil1979 1 WLR 294

16
Modern Law of Contract

17
Modern law of contract

18
Stevenson, Jacques and Co v Mclean

19 Majrowski
v Guy’s and St Thomas’ NHS Trust 2006 UKHL 34

20
Lister v Hall Hesley Hall Ltd

21 Four
Seasons Holdings Incorporated v Brownlie 2017 UKSC 80; Morrison
Supermarkets plc 2016 UKSC 11; Cox v Ministry of Justice 2016
UKSC 10; Various Claimants v Institute of the Brothers of the Christian
Schools 2012 UKSC 56; E v English
Province of Our Lady of Charity 2012 EWCA Civ 938; Viasystems
(Tyneside) Ltd v Thermal Transfer (Northern) Ltd 2005 EWCA Civ 1151;

22 Cox v
Ministry of Justice 2016 UKSC 10

23 Cox v
Ministry of Justice 2016 UKSC 10

24 Re
Polemis & Furness, Withy & Co Ltd 1921 3 KB 560

25 Livingstone
v The Rawyards Coal Company (1880) HL

26
Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39 (Lord Blackburn).
Winfield & Jolowicz (n

38) 690

27 AB v South-West Water 1993 QB 507

28 British
Transport Commission v Gourley (n 120)

29 Doyle
v Wallace (1998) CA

30 Wise v Kaye 1962 1 QB 638

31 H West and Son Ltd. v
Shepherd 1964 AC 326

32 Froom
v Butcher 1975 CA, Fitzgerald v Lane 1988 HL

33 Donnelly
v Joyce 1973 CA

34 Bradburn v GW Rly (1874) LR Ex 1

35 Provisions of Social Security (Recovery of Benefits) 1997
apply

36
Farley v Skinner 2001

37 Richard
Taylor & Damian Taylor, Contract Law Direction (6th edn, Oxford 2017) 305