Coml 203 Business Law For Assessment Answer

Rule of Law

In law, an acceptance should match all the offeror’s terms. An offeree’s claimed acceptance that contradicts any of the terms made by the offeror is counted as counter-offer that displaces the original offer making unavailable for acceptance(McKendrick, 2015). On the part of the intention to create a legal relation, a dispute in legal intention is solved by first categorizing the disputed agreement as either a commercial or a domestic agreement. The law assumes that domestic agreements are mere promises made for convenience but not for contractual obligations(Turner, 2014). However, this assumption can be nullified if a domestic or social agreement involves financial gain or losses, or if such agreement was in writing.

Application

The rules of counter-offer were first applied in (Hyde v Wrench, 1840). The defendant was selling the farm at £1,000. The claimant stated £950 as his price. The defendant rejected that price and the claimant sought to buy it at the old it £1,000, the original price, which the defendant also declined. The claimant filed a seeking the remedy of specific performance asserting that there was a contract. The court held that there was no contract as there was a counter-offer. The same situation will apply to Richard and Yvette. The action by Yvette stating $500 was a counter-offer and she cannot accept the offer again. On the part of the intention to create a legal relation, the case of (Balfour v Balfour, 1919) demonstrated that domestic promises made for mere convenience do not constitute contractual arrangements.  Both parties were a husband and a wife. The husband promised the wife that he would be paying £30 per month for maintenance. Later the relationship broke and the wife sort to enforce the agreement. The court ruled that it was a domestic agreement with no intention for legal enforcement. Similarly, the claim of Joan to enforce Richard promises would fail as that was a social agreement for their romantic relationship.Conclusion

The claims both by Yvette and Joan would fail. The court will find that Yvette’s first response was a counter-offer that “killed” the original offer, hence the offer was no longer available for acceptance. On the part of Joan, the court would find that Richard promise to give the phone as a gift for their love was made without the intention for legal enforcement. 

Joan and the Auctioneer

Issue

Dispute as to the adherence to the instructions of the “reserve price”.

Rule of Law

The relationship between the auctioneer and the seller (real owner) is that of a principal and agent.  An auctioneer acts as an agent selected by the seller to sell the items to the public by way of auctioning (Frey, 2015). The auctioneer has a duty to take reasonable measures in minimizing the loss that the principal can incur. The principal has the right to claim for damages for losses incurred due to the negligent actions of the auctioneer. In practice, the seller can sometimes expressly stipulate to the auctioneer that the goods should not be disposed below a particular price (Furmston & Tolhurst, 2010). If the auctioneer goes forward to ignore the seller’s instruction, and sell the item, the auctioneer would be liable to the seller just like any other agent. On the other hand, where there is a reserve price, the “reserve” binds the buyer whether it was communicated during the bidding or not. However, the principal can still be bound to the buyer if the auctioneer goes on with the trade using his apparent authority. In other words, “a reserve price” in an auction binds even the buyer to the seller, and if the auction accepts a lower price by mistake, the seller has the final say.  

Application

In (Rainbow v. Hawkins, 1904), the seller instructed the auctioneer that the price of the pony could not go below. R25. However, the auctioneer disposed the pony at Rs. 16. The court ruled that the principal could not recover the price from the buyer as he was bound by the agreement. However, he could recover the loss from the auctioneer. Similarly, in (MeManus v Fortescue, 1907), the auctioneer accepted the price of an article at a lower price than the one reserved by the seller. When the auctioneer refused to sell at that low price, the bidder commenced suit on the auctioneer. The court held that the seller had limited the authority of the auctioneer so there was no contract.

Therefore, following the stated laws, Joan has the right to elect any of the two actions. If the sale has not happened yet, Joan has barred the Us Ltd from continuing further with the sale of the Us Ltd. Else if the sale has already happened at $8,500, Joan has the right to recover the full amount as $10,000.  

Conclusion

In either way, Joan has the right to receive $10,000 by stopping the transaction if it has not happened as per the case in (MeManus v Fortescue, 1907). Else, she can recover the entire amount from the Us Ltd.

References

Balfour v Balfour, 2 KB 571 (1919).

Frey, M. A. (2015). Essentials of Contract Law (2nd ed.). Boston: Cengage Learning.

Furmston, M., & Tolhurst, G. J. (2010). Contract Formation: Law and Practice. NY: OUP Oxford.

Hyde v Wrench, 49 ER 132 (1840).

McKendrick, E. (2015). Contract law (11th ed.). Basingstoke: Palgrave Macmillan.

MeManus v Fortescue, 2 K. B. 1 (1907).

Rainbow v. Hawkins, 2 K. B. 322 (1904).

Turner, C. (2014). Unlocking contract law (4th edition). Abingdon, Oxon?; New York, NY: Routledge.