21644 Law & Ethics for Managers

COVER SHEET ASSESSMENT 1

Facilitator: Logan Zeng Tutorial Time: Wednesday 3.30PM
Date Submitted: September 19th, 2023 Word Count: 1200

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QUESTION SUMMARY

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The question revolves around three relationships between Dino and in turn Phil, Peter, and
Daisy. The central issues to determine is first, whether or not Dino’s first letter was an offer,
if so, did Phil and Peter accept it; and second, whether there was an unspoken agreement
between Dino and Daisy, and were there valid considerations and intentions for it?

IS THERE A VALID CONTRACT?

A contract must include a promise or promises to create an obligation between at least two
parties, and the obligation must be enforceable. For a contract to be formed, there must be an
agreement, considerations, intentions to be bound legally, written language (for some
contracts), and certainty.

AGREEMENT
An agreement consists of two main parts: offer and acceptance. An offer is a statement of the
terms that the offeror invites another party to be bound by with, which shall be in effect as it
is accepted. A valid acceptance would assent the mentioned terms and must be in the manner
requested by the offer if any.

Is There a Valid Agreement?

Dino and Phil
The main issues here are whether Dino’s letter constitutes an offer, or merely an invitation to
treat. Since the flyers can be considered a type of advertisement, it can be argued that Dino’s
letter was just an invitation to treat (Fisher v Bell, 1961; Partridge v Crittenden, 1968). In that
case, Phil’s email would be an offer in response to the mentioned invitation. Since there is no
acceptance from Dino, there would be no agreement, and thus, no contract. However, one can
counterargue that Dino’s letter is quite specific considering it mentions the number of apples
that Dino can supply. It resolves a point in the reasoning in Grainger v. Gough (1896) that a
price list as an offer implies that the “offeror” must supply an indefinite quantity of products.
Furthermore, Dino specifically sent the letter to two target audiences – Phil and Peter. If the
letter is an offer, then the next issue is whether there was an acceptance from Phil. Phil’s
email added a term regarding the sale of another type of apple, Granny Smith, at the same
price. Therefore, rather than an acceptance, it would be a counteroffer to which Dino did not
accept. Either way, there is no agreement between Dino and Phil.

Dino and Peter

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Similar to the case of Dino and Phil, Dino’s letter could be considered an offer. The
difference here is that Peter’s email was clearly an acceptance and not a counteroffer. It is
important to consider the postal rule in contract law in this case. It states that in case the
communication is postal, the offer is only valid once received by the offeree, while the
acceptance would be in effect the moment the letter is posted (Adams v Lindsay, 1818). To
revoke the offer, the letter of revocation must be received before the acceptance happens.
Applying to the case, Peter did not receive Dino’s second letter until after his acceptance,
which was sent via email and post. Nevertheless, the fact only specifies that Peter’s email
constitutes an acceptance, and the letter is a confirmation. If only the email is officially an
acceptance, then the issue lies within its effectiveness. Email, as an instantaneous
communication method, is valid only when received by the offeror. Dino received the email
but did not open nor read it, making it arguable that there is no agreement. However, the
Electronic Transactions Bill 1999 (Cth) suggests that it is effective when comes to the
attention of the recipient. In addition, if Peter’s letter was also an acceptance, then the
moment it was sent, an agreement was reached. The evidence leans toward the conclusion
that there is an agreement between Dino and Peter.

Dino and Daisy

There has been no spoken nor written language that expressively represent an offer or
acceptance. The terms are not clearly stated, but rather understood by the two parties on their
own. However, there are certain actions and informal SMS exchanges which might appear to
a reasonable person as signs of an offer. The messages with emojis of apples, apple pies, and
thumbs-up can be view as communication between the two parties. In addition, Dino’s
continuous conduct might also imply an offer, which would make Daisy’s conduct the
acceptance in response. In CSR Limited v Adecco Pty (2017), McColl JA said that contracts
can be express or implied. In that sense, there is an agreement between Dino and Daisy.

CONSIDERATION
When a party gains some benefits or suffers from an inconvenience or gives up some of their
benefits for the sake of another (paying the price for a promise), it signifies a consideration
for a contract.
In the case of Dino and Daisy, their conducts of delivering apples and giving apple pies
continuously are proves of a bargain, as two parties are both giving and gaining something.
The issue remaining is whether their considerations are past, as past considerations are

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invalid (Roscorla v Thomas, 1842). The time of the promise must be identified to determine
whether the considerations happen before, during, or after the promise. Since they always
send SMS before the “trades”, it can be understood as the promise. Then, the considerations
of delivering apples and giving back apple pies happen after the promise, thus are valid.
However, one might argue that the SMS are too vague and not a promise, so the promise
happens when Daisy calls about the missing delivery. In that scenario, the considerations
would be past and invalid. That said, the SMS are quite straightforward, and anyone would
understand their meaning given the context.

INTENTION
The intention to create legal relations is also required for a contract to be formed. Two major
presumptions about intentions of parties are that (1) commercial parties intend to be bound
legally and (2) domestic and social parties do not intend to be bound by a legal contract.
Since Dino and Daisy are family, they fall into the second presumption, meaning there is no
contract. However, Dino said “nothing personal” when answering Daisy about the usual
Friday delivery. Furthermore, Ermogenous v Greek Orthodox Community (2002) suggested
that the presumptions about intentions erred. The most important thing, however, is not the
parties’ subjective intention, but the presumed intention perceived from the outside (Taylor v
Johnson, 1983; Brambles Holdings v Bathurst City Council, 2001). From an objective point,
their continuous conduct implies an intention to be bound, and their SMS emojis are likely a
promise rather than just casual meaningless conversations. Therefore, higher chances are that
there is a contract between Dino and Daisy.

CONCLUSION
Despite the fact that Dino’s letter possibly constituted an offer, there is no agreement, and
thus no contract, between Dino and Phil as Phil’s response was either an offer or a
counteroffer. However, Peter’s response was clearly an acceptance to Dino’s offer. If Peter’s
letter was an acceptance, due to the postal rule, there is a contract between Dino and Peter,
and Dino is obliged to sell the apples to Dino at the stated price. As for Daisy’s situation,
there is likely a contract considering they have valid executed considerations and show their
intention to be bound through conduct.

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REFERENCES
Adams v Lindsell (1818) 1 B & Ald 681
Brambles Holdings Limited v Bathurst City Council (2001) NSWCA 61
CSR Limited v Adecco (Australia) Pty Limited (2017] NSWCA 121
Electronic Transactions Bill 1999 (Cth)
Ermogenous v Greek Orthodox Community of SA Inc High Court of Australia (2002) 209
CLR 95
Fisher v Bell (1961) QB 394
Grainger & Son v Gough (1896) AC 325 HL
Partridge v Crittenden (1968) 2 All ER 421
Roscorla v Thomas (1842) 3 QB 234
Taylor v Johnson (1983) 151 CLR 422

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