May june 2014 ZA

Aga (A) is on a verge to have a contract with potential buyers who are Beatrice (B) and Chad (C). To
determine whether there is valid agreement between Aga and the rest, we will look into the concept of
offer and acceptance.

The first issue which arises is whether the advert placed by Aga is an offer or invitation to treat (ITT).
An offer is a statement by which one party is willing to enter into a contract upon the acceptance of
the terms by the offeree (McKendrick); (Storer v MCC). On the other hand, ITT is just a statement,
which is not clear and straightforward like offer, through which a party starts negotiation(Gibson V
MCC). From the facts, Arden stated the price of the pot is 500 pound or nearest to it. This is a vague
statement which supports it is not an offer rather an ITT. Furthermore, according to the case of
Partridge v Crittendon, advertisements, generally, are regarded as ITT. Hence, the advert was not an
offer made by Arden.

Next, we need to determine whether there was an agreement between B and A. B emailed A and said
that she wants to buy the pot for 450 pounds. According to the definition of offer stated above, this
email is clear and it will be considered as an offer. However, A has send an email in response to the
previous email and said that she would sell the pot for 475 pound. As established in the case of Hyde v
Wrench, a party can make a counter-offer. When A has stated that she will sell the sell the pot for 475
pounds, the original offer is destroyed and she becomes the offeror (Butler v Ex-cell-o-corporation).
When Beatrice wanted to know the method of payment, this was neither offer not acceptance rather B
just asked A about a mere information about the execution of their negotiation (Stevenson); (Mcleans).

Now we need to consider whether B correctly communicated her acceptance back to A. To be of valid
acceptance, the offeree must communicate his acceptance back to the offeror (Entores v Miles Far
East Corporation);( RTS Flexible v Molkerie). Firstly, it needs to satisfy the 憁 irror image rule? that is
offeree has accepted all the terms of the contract. Here, B has turned out to be ready to buy the pot for
475 pounds. Lastly, it needs to be determined whether the acceptance was communicated back to the
offeror. From the facts, A has waived the method of acceptance through postal rule by saying 憀 et me
know by 5 pm?(Household Fire Insurance v Grant). Hence, the instantaneous method of
communication will apply over here Email is considered as instantaneous method (Brinkibon v Stahg
Stahl), as a result the normal rules of acceptance will apply. A could not read B 抯 email due to
internet failure, hence the acceptance was not communicated to A (Entores). Hence, there was not
valid agreement between them. The principle of the case of The Brimns does not apply here since A
has not received B 抯 email late alone reading it.

The next issue to determine is whether there was valid contract between C and A. According to the
law mentioned above, C 抯 telephone cal to buy the pots for 400 pounds was an offer. On the other
hand, A 抯 statement that he would not sell it less than 475 pounds was a counter offer(Hyde v
Wrench). Next, we need to consider whether the postal rule applies over here . Postal rule was
established in the case of Adams v Lidnsell, where it was stated that upon posting a letter of
acceptance by the offeree, an agreement is created, despite the offeror does not know about it.
However, there are certain limitations to this rule. As per Henthorn v Fraser, it must be reasonable to
use post. From the given facts, it is not easy to determine the reasonableness of it. It could be argued
that C could have used a faster method (relying on the current technological advancements). A
important limitation is that, the rule does not apply if the letter was wrongly addressed (Korbetis v
Transgrain Shipping BV) as happened in the facts. The offer can run the risk of delay but he or she can
not run the risk of the letter being wrongly addressed by the offeree. Hence, the postal rule does not
apply here.

On 4th May, the pot is sold to Didier (D), who is B 抯 friend. D informs B that the pot was sold to
him. We need to determine whether B could rely upon what D has said to her. Applying the rules of
the Dickinson v Dodds, revocation of an offer by a third party is acceptable if it is of an reliable
source. D bough the pot from A, this could be said he was a reliable source. Even she does not rely
upon it, the offer was terminated due to lapse of time. Since the offer was no longer open after 5 pm
on 2nd May.

From the above discussion, it can be concluded that there was no valid agreemen between Aga and the
buyers, Beatrice and Chad.