Contract Law Advice

Legal Issue:

Is Jehni able to legally force Jek to sell the charger at $25.

Relevant Rules of Law:

1. Contract is an agreement giving rise to obligations which are enforced or recognised at law. What the parties agree on must be clear and unambiguous. In order for a contract to be legally binding, four key elements must be present which are namely, offer, acceptance, consideration and intention to create legal relations. 2. Offer is an expression made by one party ("Offeror") to another party ("Offeree") communicating the offeror's willingness to perform a promise. Offers can be made in writing, orally or by conduct. In order to determine if there is an offer, it depends whether the offeror intends to be bound by his actions. 3. However, in some cases, what seems to be an offer may only be construed as an invitation to treat. According to the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1952), a display of goods and prices in a shop is usually considered to be an invitation to treat and not an offer. In such cases, the offer is made when a customer selects the item he wants and bring it to the cashier to pay for it. This general principle has been affirmed by the Singapore High Court in Chwee Kin Keong & Others v Digilandmall.com Pte Ltd (2004). 4. In some instances, communication may not constitute an offer but a mere request or provision of information. According to case of Harvey v Facey (1893), there was no contract because the second telegraph merely amounted to a provision of information and not an offer. 5. Besides offer, acceptance is required for a contract to be legally enforceable. Acceptance refers to the unconditional expression of assent to the terms of the offer.

Application of Law:

According to the case, Jek's display of his goods for sale is not to be construed as an offer. The law states that, a seller will only have limited stock for the goods available for sale. If the display of goods is to be construed as an offer, the seller will have to sell more than what he has in stock. Therefore, the seller does not have intention to be bound by the display of his or her goods for sale. Thus, Jek's display of goods for sale does not constitutes an offer but an invitation for others to commence negotiations. This is further accentuated in the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1952) where the display of goods only constituted an invitation to treat. Furthermore, Jehni's asking of the price of the charger is a mere request for information from Jek and Jek's response that it cost $25 amounted to only a provision of information to Jehni. Therefore, there is no offer made by Jek. (Harvey v Facey (1893)). On the other hand, an offer is made by Jehni (offeror) when she said "OK, but I don't have the cash now but I will come by on Monday to pick it up." However, when Jek (offeree) replied "Don't worry, I will be here every day next week," it does not show that Jek accepted or agreed to Jehni's offer and promise to sell the charger to her at $25. Therefore, it is only to be construed as an additional provision of information that he will be around for the next week.

Conclusion:

Therefore, it is evident that Jehni did offer Jek to buy the charger at $25 but it was not accepted by Jek. Besides that, the display of goods for sale by Jek is only to be construed as an invitation to treat. Thus, without an unconditional expression of assent by Jek to Jehni's offer, there is no legally binding contract and Jehni cannot legally force Jek to sell the charger to her at $25. Assignment Question (B)

Legal Issue:

Whether there is a binding agreement between Jek and Bill for the 3 XPBs.

Relevant Rules of Law:

1. Contract is an agreement which gives rise to obligations which are enforced or recognised at law. What the parties agree on must be clear and unambiguous. In order for a contract to be legally binding, four key elements must be present which are namely, offer, acceptance, consideration and intention to create legal relations. 2. Offer is an expression made by one party ("Offeror") to another party ("Offeree") communicating the offeror's willingness to perform a promise. Offers can be made in writing, orally or by conduct. In order to determine if there is an offer, it depends whether the offeror intends to be bound by his actions. 3. A unilateral contract is a contract brought into existence by the act of one party in response to a conditional promise by another. The offeree makes no promise but simply performs the condition attached the offeror's promise. (Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd & Ors (1984)). 4. However, in some cases, what seems to be an offer may only be construed as an invitation to treat. According to the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1952), a display of goods and prices in a shop is usually considered to be an invitation to treat and not an offer. In such cases, the offer is made when a customer selects the item he wants and bring it to the cashier to pay for it. This general principle has been affirmed by the Singapore High Court in Chwee Kin Keong & Others v Digilandmall.com Pte Ltd (2004). 5. Section 11 of the Electronic Transactions Act (ETA) states that an offer or acceptance can be sent electronically in the form of an "electronic communication". In addition, 6. Section 13 Subsection 1 of the ETA states that despatch of an electronic communication occurs when the message leaves an information system under the control of the originator. 7. Next, Section 13 Subsection 2 and 3 of the ETA states that receipt occurs either when the electronic communication becomes capable of being retrieved by the addressee at an electronic address designated by him or if the electronic communication is received at an electronic address that has not been designated by the addressee, receipt occurs when the message becomes capable of being retrieved by the addressee and when he becomes aware of it. 8. Section 14 of the ETA mention that the default rule is of an "offer" of goods / services via the internet will only be considered as an invitation to treat, unless the offeror makes it clear that he intends to be bound by it. 9. An offer can be withdrawn at any time prior to acceptance. One of the ways of such termination is through the lapse of time. If an offeror states that his offer is open for a specified period, a purported acceptance after that period would not be effective unless it can be shown that the offeror's conduct and other evidence after the lapsed offer continue to govern their relationship after the specified period. (Panwell Pte Ltd & Anor v Indian Bank (No 2) (2002)) 10. Another way where an offer can be withdrawn is where a counter-offer is made. This is when an offeree accepts an offer on a condition and the offeree will become the offeror in the counter-offer. In a counter-offer, the original offer will be rejected and a new offer by the offeree will be in place. In Hyde v Wrench (1840), it was held that there was no contract because Hyde's reply on 8 June was a counter-offer which extinguished the offer of 6 June. 11. Besides offer, acceptance is required for a contract to be legally enforceable. Acceptance refers to the unconditional expression of assent to the terms of the offer.

Application of Law:

From the case, the special price applied to the first 50 XPBs should be construed as an offer. Reason being, in the case of unilateral contracts, contract is accepted only by the actions of the offeree and not a promise exchanged with the promisor. However, in such a "special price sale", the offeree has to promise the offeror the $25. In the case of Carlill v Carbolic Smoke Ball Co (1892), the advertisement by the defendant constituted an offer because it was offered to anyone who contracted influenza and to show the intention by the defendant, they deposited 1000 pounds in their bank. However, this intention is not present in the case of Jek and Bill where Jek only offered the special price to the first 50 potential customers. Moreover, even if it is an offer made by Jek, it is not evident from the case that Bill is one of the 50 first customers. Since the offer by Jek is not a unilateral contract, we move on to study Section 13 of the ETA, where it states that the offer by Jek placed on his website is to be construed as an invitation to treat. On Monday 1st September, when Bill emailed Jek that he is interested in the 3 black-coloured XPBs, it makes Bill the offeror. Following that, on Wednesday 3rd September, when Bill received the reply, Jek explained that the black XPBs were out of stock, so he counter-offered Bill with the 3 pink-coloured XPBs and mentioned that "...if Bill wants three pink XPBs, he must email immediately or transfer the amount of $75 to his bank account as there are other interested buyers." However, Bill did not reply to Jek immediately, but only replied him 2 days later on Friday 5th September. With that, it is clear that the counter-offer by Jek would have lapsed and offer would have been invalid after 3rd September as he required an immediate reply. Furthermore, Jek did in-fact email Bill on 5th September stating that all (5) pink-coloured XPBs were sold out but the email went to Bill's junk mail. According to Section 13 Subsection 2 and 3 of ETA, Jek would have fulfilled the criteria of sending the email to Bill's designated email address as it is the same email address Bill used to email Jek. Even if the lapse of time is not in place, Jek would have fulfilled the criteria of withdrawing the offer (5th September morning) before Bill (replied at 5th September 5PM) accepted the offer.

Conclusion:

In conclusion, since there is no unilateral contract and the counter-offer made by Jek has lapsed, it is evident that there is no legally enforceable contract formed. Therefore, there is no binding agreement between Jek and Bill for the 3 XPBs.

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