Advise Fury as to whether he is contractually bound to Lovely, Wilder, Mike, and

Evander.

 (a)    Fury v Lovely 

 Issue: Whether there is a legally binding agreement between Fury and Lovely?

 Rule: The general rule is that a counter-offer makes the offer or contract void.
An Optional Contract is an offer to hold another offer open for a set period of
time. If this is accepted and consideration is paid then a valid contract is
formed.

 In Myers v Bavadra[1], a bare promises to keep the original offer open for a
certain number of days is  not binding on defendants because no consideration
was provided by the offeree to the offeror to keep the offer open.

 Application: Applying the above rule Lovely made a counter offer when she
offered to buy the car at $32,000 against the advertised price of $35 000. It is a
counter offer but Fury writes back to say that he will keep the offer open. He did
not expressly say that he would accept lovely’s offer of the reduced sum.

 An option contract is a type of contract that protects an offeree from an

offeror's ability to revoke their offer to engage in a contract. There is no legal
obligation from Fury because Lovely did not provide any consideration, which
has to be something valuable, for example: a deposit. Since there was no
consideration provided by the offeree, the optional contract made between Fury
and Lovely is not valid.

 Conclusion: Based on a balance of probabilities, it can be said that Fury is not

contractually bound to Lovely, due to absence of consideration.

 (b)  Fury v Wilder

Issue: Does Fury and Wilder have a valid contractual agreement?

 Rule: The general rule of acceptance is that it is only effective when

communicated to the offeror (in the sense that it is received by the offeror).
This applies to acceptances by telephone, fax, email and telex where these
types of communication are considered instantaneous. The contract is made
where and when the message is received, not when and where it is sent except
for postal.
Lord Justice Denning in Entores v Miles Far East Corp[2] stated the rule that
acceptance is made over an instantaneous medium  once the message is
received. Section 5 of the Electronic Transaction Promulgation 2008 Fiji[3]  and
subsequent amendment, Electronic Transaction (Amendment) Act) 2017 (Fiji))
approves the use of any electronic means to convey a transaction.

Sharon Christensen in ‘Formation of Contracts by Email - Is it just the same as

post?’[4] views that email are not instantaneous methods and could be delayed
but the postal rule does not apply.

Application: Applying the above rule of acceptance using Fiji’s statute, the
email message will be accepted as a correct means of acceptance as  an
electronic contract may be formed either through an exchange of email or by
completion of a document on an Internet web-site which is submitted to
another party electronically. However, Sharon’s view differs and gives direction
that emails could be accepted once it is received by the recipient. In our case,
the email was sent to the wrong address that was no longer in use.

The advertisement expressly says that reply must be made in writing to 208
Waimanu Road, Suva, but this was not done. As such, email would not be a
suitable manner of acceptance.

Conclusion: Based on a balance of probabilities, it can be said that the offer

made by Wilder is not valid and Fury is not contractually bound to him.

(c) Fury v Mike 

Issue: Is Fury contractually bound to Mike?

Rule: The general rule is that an acceptance must be communicated either by

the offeree or by someone on behalf of the offeree. To be effective the offeree
must accept using the method stipulated by the offeror.

In Adams v Lindsell[5] the Postal Rule is that acceptance by letter is complete

when the letter is posted. Also in Brinkibon Ltd v Stahag Stahl[6], it was held
that acceptance is effective when it is placed in the control of the Post Office

Application: Applying the above rule, and the ratio of the above two case laws,
since the post is considered by the parties as the proper method to
communicate acceptance, then the acceptance is deemed complete as soon as
the offeree posts the letter. The advertisement states that the offer must be
submitted in writing to the street address which Mike has complied with. As
such, he has made a valid offer in writing to Fury.

Conclusion: Based on a balance of probabilities, it can be said that Fury is

contractually bounded to Mike’s offer to buy his car.
 (d)  Fury v Evander           

Issue: Does Fury have a contractual agreement with Evander?

Rule: In Felthouse v Bindley[7], the court held that silence cannot amount to
acceptance.

In MacInnes v Gross[8], the court recognized that a contract can be made

anywhere in any circumstances. However, when the meeting takes place in a
highly informal and relaxed setting, courts will closely scrutinize the suggestion
that despite the setting there was an intention to create legal relations.

Balfour v Balfour[9] held that domestic and social arrangements are presumed

not to have legal force but this presumption can be rebutted if intention to be
legally bound is found, as in  Merrit v Merrit[10]

Application: Applying the rule of Felthouse, if there is silence to the offer put
by Fury, then it is not valid. Fury only promised Evander to sell his car but there
is nothing to show that Evander took or accepted the offer. In
applying MacInnes,  the invitation was made in a friendly and relaxed setting
and has to be closely scrutinized to see whether there are intentions to create
legal relations. When viewed objectively, there is silence from Evander and as
such, it could be seen that Evander did not wish to create a legal relation with
Fury. Also the test in Balfour could be viewed as this meeting between Fury and
Evander is more of a social meet without any legal intent and this presumption
is not rebutted by the given facts.

Conclusion: Based on a balance of probabilities, it can be said that there is no

contractual agreement between Fury and Evander.

                                            

My advice to Fury as to whether he is contractually bound to Lovely, Wilder,

Mike, and Evander will be that he is bounded only to the offer made by Mike to
buy his BMW for $35 000, and no one else.

 
 [1] Myers v Bavadra [1993], (unreported), FJHC 114; Hbc0183.93l (2
December 1993) , Notes on
Moodle, https://elearn.usp.ac.fj/mod/resource/view.php?id=244628  (Accessed
02/03/2020)

[2] Entores v Miles Far East Corp  [1955] 2 QB

327, https://webstroke.co.uk/law/cases/entores-v-miles-far-east-corporation-
1955 , (Accessed 03/03/2020)

[3] Electronic Transaction Act 2008,

Fiji,  https://www.laws.gov.fj/Acts/DisplayAct/1036 , (Accessed 03/03/2020)

[4] Christensen S; Formation of Contracts by Email - Is it just the same as

post? (2001) Vol 1 No 1 QUT LJ 22,
https://lr.law.qut.edu.au/article/view/58/57 

[5] Adams v Lindsell (1818) 106 ER

250, https://webstroke.co.uk/law/cases/adams-v-lindsell-1818  , (Accessed
05/03/2020)

[6] Brinkibon Ltd v Stahag Stahl  [1983] 2 AC

34, https://www.australiancontractlaw.com/cases/brinkibon.html , (Accessed
05/03/2020)

[7] Felthouse v Bindley (1862) 142 ER 1037, http://www.worldlii.org/cgi-

bin/disp.pl/ew/cases/EWHC/CP/1862/J35.html , (Accessed 05/03/2020)

[8] MacInnes v Gross [2017] EWHC 127 (QB) (03 February 2017,

https://uk.practicallaw.thomsonreuters.com/D-101-1222 , (Accessed
05/03/2020)

[9] Balfour v Balfour (1919) 2 KB 571, http://www.e-

lawresources.co.uk/Balfour-v-Balfour.php , (Accessed 05/03/2020)

[10]Merritt v Merritt  [1970] 1 WLR 1211, http://www.e-

lawresources.co.uk/Merritt-v-Merritt.php , (Accessed 05/03/2020)

Tags: 
 LW 201 Contract 1
Permalink

Re: Tutorial Question Week 5 – Tutorial 4  

by Khalid Hassan - Tuesday, 10 March 2020, 11:39 AM

Very nicely put, thanks for the argument. You may have a valid point there. The
advertisement of Fury is more like a call for expression of interest or a Tender.
He is asking for offers from people but has given his projected price . He says
that he will accept any offer., which may not be correct.The issue of first person
to reply is not appropriate as Lovely could have given a undervalued amount in
the offer.

In an option contract, I think Lovely should have provided a consideration like a

deposit. This is usually the case in all tenders where a refundable deposit is
given together with the offer, which is always returned to the unsuccessful
bidder.

Nice discussion with you, but I still stand by my

A