University of the South Pacific

LW201- Law of Contract I

Semester 1, 2020

Name: Benazir Nikita Nisha

Student ID: S11174604
Assignment Number: 1
Course Coordinator: Mr. Pradeep Tiwari
 Assignment 1
Advertisements are mostly considered as invitation to treat instead of an offer. This is
distinguished in Partridge v Crittenden1 whereby the advertisement for ‘Bramblefinch cocks,
Bramblefinch hens 25s each’2 was held to be an invitation to treat and not an offer. Therefore,
Josefa’s advertisement is also regarded as an invitation to treat because there is no willingness to
be bound by making an offer but is rather seeking for offers for the cocoa seeds. Thus, the
following issues will be taken into account, considering that this advertisement is an invitation to
treat.

Issue 1
Can there be a legally binding contract between Latu and Josefa?
Rules
Meehan v Jones (1982) 149 CLR 571
Application
In Meehan v Jones3, it is stated that “subject to finance” is considered to be a conditional offer,
and once it is fulfilled by the offeror the contract then it cannot be held void and both the parties
will have a legally binding contract.
Therefore, in the case of Latu, he had made an offer to Josefa stating that he would buy the cocoa
seeds for the advertised amount “subject to finance by ASB Bank” clearly intending to be bound
by this agreement if the finance is granted by the bank and was able to secure his loan as well.
Thus, the condition was fulfilled and he had written to Josefa prior, informing him about his
offer with its subsequent condition, to which Josefa had assent to as “no worries”. But
‘conditional assent does not amount to acceptance’ 4, however since the condition is satisfied,
they now have a legally binding contract.
Conclusion
Thus, because the subsequent condition is fulfilled therefore Latu and Josefa have a legally
binding contract.

Issue 2
Can Mary claim to have a legally binding contract with Josefa?
1
Partridge v Cirttenden [1968] 2 All ER 421
2
Above n 1
3
Meehan v Jones (1982) 149 CLR 571
4
Jennifer Corrin Care, “Contract Law in the South Pacific”, Cavendish Publishing Ltd, London, 2001, p 43

1
Rules
Entores v Miles Far East [1955] 2 QB 327 Court of Appeal
Pacific Architect Ltd v Commissioner of Lands (1997), unreported, 14 March, High Court,
Solomon Islands, Civ Cas 175/1995
Sale of Goods Act, Cap 230 (Fiji Islands), section 10
Application
It is stated by Lord Denning in Entores v Miles Far East5 that ‘the rule about instantaneous
communications between the parties is different from the rule about the post. The contract is only
complete when the acceptance is received by the offeror; and the contract is made at the place
where the acceptance is received’6 This is further highlighted by Lord Justice Birkett in
agreement with Lord Denning, that ‘there can be no binding contract until the offeror receives
notice of the acceptance from the offeree.’7 Therefore, in Josefa’s case, because Mary left a
message on voicemail, it does not amount to acceptance as she has used an instantaneous form of
communication and thus it will only form a contract once it is received by Josefa and he is able
to communicate his acceptance through the voice call. Moreover, the postal rule referred to is
from Adam’s v Lindsell8 which cannot be used in this matter because of the mode of
communication is not a letter. Thus, in Josefa’s case, because Mary left a message on voicemail,
it does not amount to acceptance as she has used an instantaneous form of communication and a
legal contract can only be formed, once it is received by Josefa and he is able to communicate his
acceptance through the voice call.
Furthermore, Mary also posted a letter stating “I will buy your 50 bags of cocoa seeds”, however
she did not state the price that she is willing to purchase it for and therefore it becomes an
incomplete offer or agreement to be held legally binding. This is also depicted in the case of
Pacific Architects Ltd v Commissioner of Lands 9, whereby the court held that the sale of land
agreement between the defendant and plaintiff was unenforceable due to the failure of clear
specifications of price, boundaries of the lands and other terms needed for the application of
transfer of lands by the Commissioner. The rule on “Ascertainment of price” is also discussed in
section 10 of the Sale of Goods Act, Cap 230 (Fiji Islands)10 as:

5
Entores v Miles Far East [1955] 2 QB 327 Court of Appeal
6
Above n 2
7
Above n 2
8
Adams v Lindsell (1818) 106 ER 250
9
Pacific Architect Ltd v Commissioner of Lands (1997), unreported, 14 March, High Court, Solomon Islands, Civ
Cas 175/1995
10
Sale of Goods Act, Cap 230 (Fiji Islands), section 10

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 10.-(1) The price in a contract of sale may be fixed by the contract or may be left
to be fixed in manner thereby agreed or may be determined by the course of
dealing between the parties11
Therefore, this provision states that the price must be fixed over time for the deal to be
finalized between the parties and would differ according to the offer made by the offeree.
Thus, the advertisement Josefa placed is an invitation to treat and Mary should have
extended her offer to purchase the cocoa seeds by clearly stating the price she is willing
to pay to purchase the cocoa seeds. Subsequently, she is also related to Josefa, and ‘the
presumption is that domestic and social agreements are not intended to have legal force’ 12
unless it could be rebutted and intention is proved. However, in this case, Mary fails to
prove her intention by not stating the price in her offer to Josefa for the purchase of cocoa
seeds, which leads her offer to be deemed as an “incomplete agreement”.
Conclusion
Thus, failure of communication of acceptance via call and making an incomplete offer by
not stating the price she is willing to pay, hence proves that she is not intending to be
legally bound by the “incomplete” agreement. Therefore, there is no contract of any legal
effect between the siblings.

Issue 3
Can Charles claim to have a legally binding contract with Josefa?
Rules
Hyde v Wrench (1840) 49 ER 132
Application
In the case of Hyde v Wrench13 the defendant had made an offer for his farm but the plaintiff
made a counter-offer instead of accepting the initial offer, which was rejected by the defendant
later on. However, the plaintiff tried to accept the initial offer and sought for remedies but it was
held by the court that ‘…there was no contract. The counter-offer was a rejection of the offer by
the defendant, which could not subsequently be accepted.’14
Consequently, according to Josefa’s advertisement, it is an invitation to treat, therefore Charles
had offered to buy the cocoa seeds for the price advertised for it. However, before Josefa could
accept it. He expressed his rejection of the offer by making a counter-offer of selling it for

11
Above n 9
12
Jennifer Corrin Care, “Contract Law in the South Pacific”, Cavendish Publishing Ltd, London, 2001, p 61
13
Hyde v Wrench (1840) 49 ER 132
14
Jennifer Corrin Care, “Contract Law in the South Pacific”, Cavendish Publishing Ltd, London, 2001, p 42

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$7,500 instead of the initial price of $5,000, which terminated Charles offer as before
acceptance was communicated by the offeror to the offeree via an instantaneous mode of
communication discussed in Entores v Miles Far East 15, Josefa had rejected his offer. Thus, not
having any valid contract formed between them.
Conclusion
Therefore, according to the rule of terminating an offer by expressing a counter-offer discussed
in Hyde v Wrench16, it can be held that there is no legally binding contract formed between
Josefa and Charles because Josefa had terminated Charles offer by making a counter offer of
$7,500.

Issue 4
Whether or not there is a legally binding contract between Patrick and Josefa?
Rules
Hyde v Wrench (1840) 49 ER 132
Adams v Lindsell (1818) 106 ER 250
Entores v Miles Far East [1955] 2 QB 327 Court of Appeal
Mountford v Scott [1975] 1 All ER 198
Myers v Bavadra (1993) unreported, 2 December, High Court, Fiji Islands, Civ Cas 183/1993
Application
In Hyde v Wrench, the plaintiff rejected the offer of the defendant by making a counter-offer and
it was held that there is no valid contract as counter-offers are not a communication of
acceptance but instead a rejection for the offer. Thus, Josefa made a counter-offer to Patrick’s
offer of buying the cocoa seeds for the price mentioned in the advertisement. However, Patrick
insists on buying his initial offer made and provides his phone contact for Josefa to communicate
his acceptance through with the period of time he promised to leave his offer open. However, as
held in the case of Mountford v Scott17 that ‘a bare promise to keep an offer open for a certain
period of time will be binding if it is supported by consideration or if it is contained in a deed’ 18
must also be applied to the issue at hand, as Josefa had not paid any consideration to Patrick to
keep the offer open for another week. This is further emphasized on by the judge in the case of
Myers v Bavadra19 as:
15
Above n 2
16
Above n 9
17
Mountford v Scott [1975] 1 All ER 198
18
Above n 10
19
Myers v Bavadra (1993) unreported, 2 December, High Court, Fiji Islands, Civ Cas 183/1993

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 To create such an open offer for a certain time requires agreement or intention
between the parties in that regard, and separate consideration from the offeree
flowing to the offeror to keep his offer open on those terms exclusively for the
agreed period of time. In the case at hand, I am satisfied that all the defendants did
was to make a bare promise to keep their offer open…and the expense[s] incurred
by the plaintiff was not the price agreed to between the parities to do so.20
Consequently, although Patrick told Josefa that he would keep the offer open for a week
for him to decide if he wants to accept it or not, it would still be deemed as a “bare
promise” because there was no consideration provided by Josefa to Patrick for the agreed
period of time and to not deal with a third party during that period.
Moreover, ‘the offeror may expressly or impliedly prescribe the method of acceptance.
Failure to adopt that method is at the offeree’s risk’ 21 therefore, Patrick had provided his
phone contact to be used by Josefa to communicate his acceptance. However, Josefa
failed to use that specified method by Patrick and instead opted to post his acceptance on
Sunday morning which is at the same time when Patrick tries to call to withdraw his offer
but goes to voicemail instead and leaves a message on it for Josefa. Therefore, because
Patrick was not bound by any consideration to keep the offer open exclusively for Josefa
only, he was not under any legally binding contract and thus could withdraw his offer any
time before the acceptance. Additionally, he had also stipulated the method of acceptance
as the instantaneous mode of communication but it was not followed by Josefa and
therefore the postal rule cannot be applied.
Conclusion
Hence, the offer was rejected by counter-offer and then was left open for a period of time
without any consideration paid by Josefa as he became the offeree, becomes
unenforceable. As well as, the method of communicating acceptance was not followed
and therefore, both the parties do not have a legally binding contract between them.

2. Therefore, Josefa can only be legally bound with Latu as the conditional offer of
“subject to finance by ASB Bank” was fulfilled. However, he is not bound in an
enforceable contract with Mary due to the fact that the communication of acceptance had
not taken place via the instantaneous mode of communication and also the
incompleteness of the agreement, that is, the lack of price statement in Mary’s offer
proves that there is no intention to be bound as it can also be considered as a social and
domestic agreement because the of their relation. Furthermore, Charles and Josefa also do
not have a legally binding contract because Josefa had rejected Charles offer with a
counter-offer of his own and thus there was no communication of acceptance. Moreover,
20
Above n 15
21
Above n 14

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there is no contract formed between Josefa and Patrick, as Patrick made an offer to Josefa
to which Josefa terminated with a counter offer but Patrick insisted on agreeing to his
initial offer, and then left it open for Josefa to decide on but because of the lack of
consideration, Patrick was not bound to not withdraw his offer before acceptance was
communicated by Josefa. Lastly, the method of communication agreed upon was
incorrectly followed by Josefa, as he did not use the instantaneous mode of
communication and instead posted his acceptance. Therefore, the postal rule cannot be
applied correctly to give rise to an enforceable contract. Hence, even Josefa cannot
successfully claim to have a legally binding contract with Patrick.

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 Bibliography
Cases
Adams v Lindsell (1818) 106 ER 250
Hyde v Wrench (1840) 49 ER 132
Entores v Miles Far East [1955] 2 QB 327 Court of Appeal
Meehan v Jones (1982) 149 CLR 571
Mountford v Scott [1975] 1 All ER 198
Myers v Bavadra (1993) unreported, 2 December, High Court, Fiji Islands, Civ Cas 183/1993
Pacific Architect Ltd v Commissioner of Lands (1997), unreported, 14 March, High Court,
Solomon Islands, Civ Cas 175/1995
Partridge v Cirttenden [1968] 2 All ER 421

Books
Jennifer Corrin Care, “Contract Law in the South Pacific”, Cavendish Publishing Ltd, London, 2001, p
42-62

Laws
Sale of Goods Act, Cap 230 (Fiji Islands)