Fundamental of Laws
We would first need to establish if there is a valid and legally binding contract formation between Iris (“the offeror”) before deciding on the likely outcomes for the parties. A proper contract constitutes an offer, an acceptance, the provision of a consideration of value and parties’ intention to legal relations. There was no depute as to the presence of a valid offer because Iris did indeed make an offer to sell the piano for a specific price and its terms i. e. keeping the offer open for Diana till noon on Saturday, were communicated to Diana.
In return, Diana had also put up her consideration towards the formation of the contract by making an effort to raise the money needed to buy the aforementioned piano from Iris. Beside the elements of acceptance, which we shall discuss in the latter paragraphs, the collective actions from the both parties suggested that they were intending to form legal relations with each other. OFFER Offer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties.
Agreement consist of an offer by an indication of one person, the offeror, to another, the offeree, of the offeror’s willingness to enter into s contract on certain terms without further negotiation. At law, an offer is the indication by one party to another of his willingness to enter into a contract with him on certain terms. It must be communicated to the offeree. It may be kept open if supported by consideration. Also, an offer may be terminated. On Monday, Iris communicated her offer to sell her piano to Diana for ?500. Therefore, Iris is the offeror.
At law, a promise to keep an offer open for a certain time or to give someone ‘first refusal’ will not be legally binding unless the offeree gave some payment to the offeror in return for the favour. Otherwise, the offeror is making only a gratuitous promise: giving something for nothing. Such a promise is not a contractual one, since it lacks consideration – Goldsborough Mort & Co Ltd v Quinn (1910) There is no option present as Diana did not give anything of value to Iris to keep the offer open. Therefore, Iris promise to hold the piano till Saturday was not legally binding. Thus, the offer was invalid. ACCEPTANCE
There are two elements for acceptance to be valid. At law, acceptance must be Final and Unqualified. The general rule is that acceptance is effective only when is communicated to the offeror. Diana’s acceptance is final and unqualified as she phoned and left a message with Iris’s daughter, Athena, saying that she got the money and would collect the piano on Saturday morning. However, the acceptance was not communicated to Iris as Athena forgot to pass the message to Iris. Thus, Diana’s acceptance of offer is invalid as it does not fulfill the requirements for the acceptance to be effective. The acceptance was not communicated to the offeror.
REVOCATION At law, offeror may revoke an offer at any time prior to the offer being accepted even if the offeror has promised not to revoke it – Routledge v Grant Notice of revocation is crucial; it is not effective unless the offeree knows it. Offeror are entitled to change their minds and withdraw offers at any time right up to the moment of acceptance. An offer can be revoked by the offeror any time before it is accepted. This is analogous to the case of Byrne & Co v Leon Tienhoven & Co (1880) Personal notification is usual, but is not essential as long as the offeree knew or reasonably should have know that the offer had been withdrawn. Dickinson v Dodds (1876, CA) Revocation must be communicated to the offeree – Byrne v Van Tienhoven (1880) On Thursday, Iris was visited by Juno who said that she would pay ?600 for the piano. Later that day, Iris posted a letter to Diana on Thursday to revoke the offer. The revocation of the offer was invalid as the letter of revocation did not reach Diana. This was due to the fact that Mercury, the postman, delivered the letter to the wrong address. Thus, revocation was not communicated to the offeree.
However, Iris would argue that the revocation was valid as at law, Iris did not receive an acceptance from Diana and she could revoke the offer at any time prior to the offer being accepted. But, Iris was not aware that the letter of revocation did not reach Diana. On the other hand, Diana would argue that the revocation was not effective as she gave her acceptance on offer to Iris’s daughter on phone on Wednesday. Diana did not know that the acceptance was not communicated to Iris and she did not receive the letter of revocation.
Thus, Diana assumed that her acceptance on offer was valid and appeared with a hired van to collect the piano on Saturday evening. Henceforth, Iris revocation on Thursday was not effective as the letter of revocation did not reach Diana. Revocation was not communicated to the offeree. CONCLUSION The offer between Iris and Diana is valid as well as Juno offer to Iris. The acceptance between Iris and Diana is not legally binding due to it was just a verbal promise that Iris would hold on to the piano for Diana till Saturday morning if Diana could raise the money.
On Wednesday, although Diana’s acceptance was made to Iris’s daughter, Athena, it was not direct to Iris. If Diana’s acceptance is invalid it can be argued, but if there’s this, Juno’s acceptance may be valid. But the contract between Juno and Iris was invalid still due to Juno’s offer was given to Iris on Thursday. Although Iris accepted the offer, there’s still no legal contract between them until Saturday. But Iris did something, she sent a revocation letter to Diana but Diana didn’t receive it. Therefore, Diana can actually sue Iris for compensation.
