Commercial Law Contracting Parties

Question: Discuss about the Commercial Law for Contracting Parties. Answer: Introduction: The issue in this question is if a contract has been created between the partie or not. For this purpose, it has to be seen if the essential elements that are required for creating a valid contract between the parties present and who were the parties to the contract. In this context, a contract can be described as an agreement that has been created between two or more parties and the terms of the contract have an effect on the rights and obligations of the parties that can be imposed by the law. However it is an objective question if the parties have arrived at an agreement in each case or in other words, if there is a meeting of the minds between the parties. Generally in such cases, the concept of offer and acceptance provide the starting point for analyzing if a valid contract has been created between the parties. Different offer can be described as a promise or the expression of willingness by the offeror that such party will be bound on some specific terms if these terms are accepted by the party to whom the offer has been made (Leong, 1998). It is also required that the other essential elements of a valid contract, like consideration and the intention of the parties to enter into legal relations is also present. Therefore in such a case, if the offer has been accepted by the other party, it will result in the formation of a valid contract between the parties. The law requires that the offer should be made with an intention to be bound by the offer. In view of this requirement, the statements that are made with a view to invite offers from the other party are not treated as valid offers, the acceptance of which will result in a valid contract (Smith v Hughes, 1871). Therefore such statements are considered as invitations to treat. In the present case, Alan wanted to sell the book, "Introduction to Business Law in Singapore". For this purpose, a posted a notice on his Facebook page in which he mentioned his willingness to sell the textbook along with the nodes that he had taken in the class. This notice cannot be treated as a noble but it was merely an invitation to treat as it has been made with the invite offers from other parties for purchasing the book. A return of this notice, Bernard had offered to purchase the book at a price of $150. The law requires that an offer should be accepted on the same terms and any variation in the terms of the contract amounts to a counter offer. When a counter offer is made, the effect is that the original of that is no longer available to be accepted by such party. Similarly in response to this notice on the Facebook page of Allen, his younger sister Charleen told him that he wanted to read business law and therefore she was ready to purchase the book for $200. In this case , it needs to be established that the parties had intention of entering into a legal relationship when Charleen made an offer to purchase the book. In the same way, Damien came to know regarding Alan's offer and he also wanted to purchase the textbook and the handwritten notes. Therefore, he sent an SMS to as an in which he made an offer to purchase the book. On 4 Nov, Damien saw Alan and gave the price of the book in cash. Alan accepted the money and told Damien that he will give the book and the notes to him on 7 Nov. In this way, it can be said that a contract has been formed between Damien and Alan. The reason is that in this case, all the elements that are required for the creation of a valid contract are present. Bernards legal position In this case, after seeing the message posted by Alan on his Facebook page, Bernard offered to purchase the material from Alan. However he was only ready to pay $150 for it. Therefore, in his reply, Bernard asked Alan if he can sell the material at a price of $150. In reply to this message, Alan said that he will sell the material at $200 only and in fact, he already had an offer for the same. Under these circumstances, Bernard decided to purchase the material from Alan at $200. But as he was going overseas for three days, he would $200 in an envelope and posted the same to Alan on the morning of 4 Nov. The envelope with the money was received by Alan on 5 Nov when he opened the letter box. However in this case it needs to be noted that when Bernard offered to purchase the material at $150, it can be said that he had made a counteroffer. The law contract provides that once an offer has been rejected by the party to whom the offer was made, such party can no longer accept the offer. I n the same way, the rejection of the offer may take place when the offer has been out rightly refused or when the offeree has made a counter offer (Dickinson v. Dodds, 1876). It is said that a counter offer has been made by the offeree when the offer is purported to be accepted but on different terms. In this way, according to the law contract, an offer should be accepted exactly on the same terms. If there is any variation in the terms of the offer while accepting the offer, the law considers that offeree has made a counter offer (Sinnadurai, 1987). Therefore even if the difference in the terms of the offer while accepting the offer is immaterial, still it will be treated as a counteroffer and the effect will be that the original offer will be considered to have been rejected (Kit-Wye, Yeo and Yang (eds), 1998). In this case, the law considers that when a counter offer has been made, the original offer is no longer available to such a party to be accepted later on. It is considered that the offeree has made a new offer in such a case. Therefore in this case, Bernard had made a counter offer to purchase the material at a price of $150, hence it is no longer available to Bernard to accept the original offer made by Alan, later on. Charleens Legal Position In this case, Alan's younger sister Charleen also saw the post on Alan's Facebook page in which he had mentioned his willingness to sell the textbook along with the handwritten notes for $200. Charleen also wanted to read business law. Therefore she told Alan that she wanted to purchase the textbook at $200. Alan did not reply and he merely smiled. The reason was that Alan thought that his sister, Charleen was not serious when she told him that she wanted to study commercial law at such a young age. However, Charleen asked Alan if she can give him the money on 6 Nov. In reply, Alan merely nodded as he was thinking about the performance of his favorite football team at that time. He later on went back to sleep. But on 6 Nov, Charleen put $200 on Alan's table. Therefore, the issue in this question is if a legally enforceable contract has been created between Alan and Charleen. This issue arises due to the fact that among the other essential elements that are required for the formation of a valid contract, it is also required that the parties should have the intention of entering into legal relations (Storer v. Manchester City Council, 1974). On the other hand, in case of social and domestic arrangements, the presumption is present according to which, the parties did not have the intention of entering into legal relationships. Therefore in such cases, it has to be established that the parties had the intention of forming legal relations. Another requirement that is applicable in this case is that the offer should be expressly accepted by the party to whom the offer has been made (Beatson, 1998). Therefore in this case, Alan had not expressly accepted the offer made by Charleen according to which she was ready to purchase the textbook at the price of $200. As in this case, the conclusion appears to be that a legally enforceable contract has not been created between Alan and Charleen. Damiens legal position In this case, Damien was not on Alan's Facebook account. He came to know regarding Alan's offer from Bernard and decided to accept the offer. For this purpose, he sent an SMS to Alan and expressed his willingness to purchase a commercial law material. Therefore, Damien asked Alan if he can give them the money on 4 Nov in Kaplan Higher Education. According, Damien gave $200 to Alan which was accepted by him as the payment for his commercial law material. Allen also told Damien that he will give the material to them on 7 Nov. but he gave his original textbook to Bernard and purchased a same textbook which he passed on to Damien along with his handwritten notes. Therefore, this amounts to a breach of contract one part of Alan. The various alternative dispute resolution options available and the pros/ cons with these options Apart from the traditional method of resolving disputes through litigation, several alternative dispute resolution methods are also available to the parties. When the parties are involved in a legal dispute, they may consider taking recourse to legal action for the purpose of protecting their interests. However in such a case, the parties are also concerned regarding the potential downside of the trial, like the potential time and money that has to be used for preparing for the trial and also the risks and pressures that are related with litigation. In this way, now the parties are realizing that litigation is not the only way to resolve their disputes. At the same time, the courts also encourages the parties to explore the alternative dispute resolution processes that may be appropriate for them. The main alternative dispute resolution processes that are available to the parties are radiation, natural evaluation and arbitration. In case of mediation, a neutral third party that is known as the mediator, guides and facilitates the parties in arriving at a mutually acceptable settlement through negotiations. Therefore in case of mediation, the mediator does not go into the question regarding the party is at fault in the dispute. On the other hand, the mediator helps the parties in focusing on the ways in which solutions can be found to the dispute that will fill their concerns and in this case a decision is not forced on the parties. The second method that can be used by the parties for resolving the dispute is that of neutral evaluation. In case of this method, a neutral third party, who is known as the evaluator, reviews the case and provides an evaluation of the merits of the case. In case of neutral evaluation, the parties along with their lawyers, present their case and also the key evidence. Then the evaluator provides his best estimate regarding the chances of success of each party at the trial. Another method that can be used by the parties for resolving their disputes is of arbitration. Under the process of arbitration, it is agreed between the parties that the dispute will be resolved by bringing the issue before a neutral third party, called the arbitrator, who gives his decision on the matter. Therefore when the arbitration proceedings are taking place, the parties along with their lawyers, present the case before the arbitrator. Therefore the decision given by the arbitrator is based on the merits of the case and similarly the decision is also binding on the parties. Therefore, the decision given by the arbitrator has to be followed by the parties. These are the methods that can be used by the parties to the present case also to resolve the dispute between them in place of litigation. References Andrew Phang Boon Leong, 1998, Cheshire, Fifoot and Furmston's Law of Contract, Second Singapore and Malaysian Edition, Butterworths Asia Dato' Visu Sinnadurai, 1987 The Law of Contractin Malaysia and Singapore: Cases and Commentary,2nd edn, Butterworths (Singapore) Beatson, 1998, Anson's Law of Contract,Twenty-Seventh Edition, Oxford University Press Lum Kit-Wye, Victor Yeo and Low Kee Yang (editor), 1998, Contract Law, Butterworths Asia pp. 202 Lum Kit-Wye, Victor Yeo and Low Kee Yang (eds), 1998, ContractLaw,Butterworths Asia S. Atiyah, 1995An Introduction to the Law of Contract,5th edn, Clarendon Press (Oxford) Dickinson v. Dodds (1876) 2 Ch.D. 463 Smith v Hughes (1871) LR 6 QB 597 Storer v. Manchester City Council [1974] 3 All E.R. 824