Contract Law in the Presented Scenario, Brian

Contract Law

In the presented scenario, Brian had been negotiating with Amy for several days without reaching agreement. They finally reached a compromise and agreed that the transaction would proceed. However, it appears as though there was a communication lapse because Amy's bid was higher than Brian's offer, which is unusual in such kind of transactions. Despite these facts, a contract is considered as legally binding if it contains the basic elements including an offer, acceptance and intention of legal consequences.

English contract law as seen in Powell v Lee (1908) 99 LT 284, establishes that an offer must be made by the offeror to the offeree himself or authorized agent.[footnoteRef:1] The law further considers an offer as entering into negotiations. On the other hand, acceptance is an important aspect of a contract. In Entores Ltd. v Miles Far East Corporation (1955) EWCA Civ 3 the ruling made it clear that acceptance occurs where the message of acceptance is read.[footnoteRef:2] In the presented scenario, this issue seems complicated. It is explained that Brian and Amy had trouble agreeing because they had negotiated for several days without reaching agreement. The last time they communicated before the final offer, Brian told Amy that he was prepared to offer the car for is $10,500. That night Amy wrote to Brian saying that she was ready to give $10,500 for the car and that she would need a roadworthy certificate. Coincidentally, Brian wrote to Amy the same time and offers the car for $10,200 as his lowest price. It is difficult to point at which offer the offeree acknowledged, but there are two assumptions. First, that Brian went down on the previous offer of $10,500 or he further reduced the price because of the Amy asked for a roadworthy certificate, regardless of the assumed theory, it is critical to analyze whether there was an acceptance to the final offer of $10,200. [1: Powell v Lee. (1908) 99 LT 284] [2: Entores Ltd. v Miles Far East Corporation (1955) EWCA Civ 3]

Nonetheless, it is important to have consideration for a contract to take form. According to the English contract law, for there to be consideration, something has to be given in return for the promise.[footnoteRef:3] As seen in Nestle Co Ltd. [1960] AC 87, consideration must have some value, however minimal and this is for the parties to decide not a cour of law.[footnoteRef:4] Moreover, a consideration must be given at the time of agreement, and must not entail past acts as revealed in Re McArdle (1951).[footnoteRef:5] Despite having earlier agreed to buy the car at $10,500, Amy did not pay any amount or promised to commit a down payment. According to the senerio, after the messages were sent on Wednesday, Amy decided not to proceed with the agreement. [3: Nolan, D. (2011). The Classical Legacy and Modern English Contract Law. The Modern Law Review. ] [4: Nestle Co Ltd. [1960] AC 87] [5: Re McArdle (1951). ]

In the contract law, for an agreement to be enforceable, it must have an intention to be legally binding. This is used in a court of law to relay a courts opinion that the parties in agreement had the intention of using the legal system to strengthen their agreement. Despite the fact that courts do not wish to interfere with private issues by focusing on a person's subjective intentions, they generally advocate for legally enforceable agreements more so those commercial in nature. Rose & Frank Co v JR Crompton & Bros Ltd. [1924] UKHL 2 is a good example of the intention to create legal partnerships.[footnoteRef:6] In this case, a document signed by one party on July 11, 1913, and a counterpart signed a month later by the other party, was upheld as an enforceable contract. The court of appeal ruled that for a contract to be enforceable there must be a common intention of those involved to enter into legal relationships. An indication of such intention will be when the parties enter an agreement that conforms to the law in regards to formation of contracts. However, in this scenario, there is no indication that the involved parties had the intention of legally enforcing their agreement. [6: Rose & Frank Co v JR Crompton & Bros Ltd. [1924] UKHL 2]