The any contractual liability to Fernando or Ali.

The situation that is being addressed is being examined to
see if a contract has been formed, regarding if Simon owes any contractual
liability to Fernando or Ali.

‘A contract is an agreement between two or more persons
which is legally binding’. 1. Research is conducted to find out if
an advertisement in the local newspaper creates a contractual liability between
the people involved.

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The advertisement that was displayed by Simon in the paper
is called an invitation to treat. Invitations to treat are statements that open
up negotiations but are not actually offers. 2 The case that is
linked in with ITT’s is Harvey v Facey. 3
– Such statements are not offers and cannot be accepted as much. An
advertisement in a newspaper is one of the everyday situations which generally
give rise to invitations to treat, developed through the case Partridge v Crittenden. 4

Firstly, Fernando became immediately interested in the
product that Simon was advertising in the local paper so he quickly sent a
cheque through the post of £7000 to pay for the book, including paying for the
cost of the postage and packing. In this case, the ‘Postal Rule’ falls into
place, meaning that as soon as there is an acceptance of an offer by post, it
is valid as soon as it is posted, produced through the case Adams v Lindsell. 5 Also,
Simon did not receive the cheque from Fernando in time and it is not known if
he received the cheque or not but despite this, the acceptance by post will
create a valid and binding agreement, developed from the case Household Fire Insurance v Grant. 6
This concludes that the defendant Simon is in a breach of contract with
Fernando.

In
order to have prevented this problem from happening, Fernando could have used
another form of communication where Simon would receive the acceptance directly.
An example for this is immediate communication such as speaking by telephone –
Simon put his telephone number on the advertisement. This would result in Simon
receiving the acceptance straight away, developed from the case Entores v Miles Far East Corporation. 7
It would have prevented the unwanted, unnecessary problems that have been
caused.

1.       
 Lucy
Jones. Introduction to Business Law (4th edn, OUP 2017) 81

2.       
“An Invitation to Treat.”
(LawTeacher.net. 11 2013) https://www.lawteacher.net/free-law-essays/european-law/an-invitation-to-treat.php?cref=1

3.       
Harvey v Facey (1893) AC 552 (PC)

4.       
Partridge v Crittenden 1968 1 WLR 1204
(DC)

5.       
Adams v Lindsell 106 ER 250; (1818) 1 B
& Ald 681 (KB)

6.       
Household Fire and Carriage Accident
Insurance Company Ltd v Grant (1878-79) LR 4 Ex D 216 (CA)

7.       
Entores v Miles Far East Corporation
(1955) 2 QB 327; 1955 3 WLR 48 (CA)

The second claimant who wanted to purchase the book is Ali.
Ali first of all rejected the offer to pay £7000 and made a counter offer of
£6500 which was terminated by the defendant Simon, this term was used due to
the case of Hyde v Wrench. 8 At this point, there is no contract
between the claimant and the defendant. Ali agreed to pay the £7000 and emailed
Simon – the acceptance was sent, Simon deleted the email from Ali confusing it
with a spam email and Ali sent the cheque through the post. Email is different
from the postal rule. 9 Email informs you whether the email has been
sent to the other person in the situation, where as you will not receive this
information from posting a letter. Therefore, a contract has not been made between
Ali and Simon in this sense. In argument to this, Ali has already posted the
cheque stating that she does have a contract with Simon due to the postal rule
– the contract is made once the acceptance has been posted.

In conclusion, Simon has a contractual liability to both
Ali and more so Fernando. The postal rule summaries this due to them both
sending their acceptances through the post, meaning as soon as the cheque is
posted there is a contract made whether Simon receives the cheque or not. The
advice that would be suitable to give both Fernando and Ali is that immediate
means of communication would solve many issues and delays in the long run.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.       
Hyde v Wrench (1840) 3 Beav 334 (Ct Ch)

9.       
“Acceptance: Postal rule” (Contract Law, 7
December 2012)

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