¶ … Sarah's legal adviser under the previously described scenario, there a several questions I would like to ask my client before devising any potential defenses against Barry's charge of breach of contract. According to the facts presented by both parties, on Wednesday a conversation took place to negotiate the terms of a potential sale, with ownership of a refurbished laptop being transferred to Barry in exchange for $1,000 payment. On Wednesday, Sarah also informed Barry that her asking price was firm, and as a courtesy she also offered to withhold sale of the laptop until the end of the week if he was still interested. This proviso is central to Barry's eventual claim that a contract has been breached, because in his view this offer to reserve the laptop until Friday night at the very earliest was extended by Sarah and duly accepted by Barry, an agreement which would represent a contractual agreement according to the precedent established by the common law rules of offer and acceptance1. It is my opinion, however, that this case represents an unfortunate circumstance in which offer and acceptance cannot be clearly ascertained, and according to Justice Cooke's opinion in the landmark contract case Meates v Attorney-General, the issue at hand when offer and acceptance is disputed lies in "whether, viewed as a whole and objectively from the point-of-view of reasonable persons on both sides, the dealings show a concluded bargain."2
1 R. v Clarke (1927) 40 CLR 227.
2 Meates v Attorney-General (1983) NZLR 308: 408.
The most relevant facts in to the eventual decision rendered in this case occurred on Thursday, when Barry contacted Sarah to broach the subject of including a 12-month warranty on the laptop in the event it was purchased. As Sarah's legal adviser, I would need to know the exact terminology of her response to Barry's request for a warranty, because if she simply said that she would consider the request and respond at a later date, no offer has been accepted. According to the common law precept known as invitatio ad offerendum, or "invitation to treat," as set forth in the 1870 case of Spencer v Harding3, Barry's request for a warranty before purchasing the laptop merely represents his willingness to engage in proactive negotiations, and not a clear acceptance of Sarah's original offer to sell him the laptop. Had Barry agreed to purchase the laptop with or without an attached warranty, and simply asked his sister Sarah to consider providing this extended protection, a viable verbal contract would have been established. By waiting until Thursday night to make this decision, however, Barry missed his proverbial window of opportunity, as Sarah was indisposed that evening and was unable to communicate directly over the phone. The fact that his secondary offer to accept the laptop for $1,000, with or without warranty protection, was made over Sarah's answering machine, and not to her in any direct fashion, is central to the validity of his claim that a contract has been breached.
In fact, the circumstances of Sarah's encounter with Barry closely mirror the facts laid out in Henthorn v Fraser4, as both cases involve an instance in which an offer was rightfully tendered, but the necessary acceptance was never given or received. In that case, the plaintiff
3 Spencer v Harding (1870) LR 5 CP 561.
4 Henthorn v Fraser (1892) 2 Chapter 27 at 37.
sued for breach of contract after agreeing to purchase a building for a predetermined price, and watching as that property was sold to another party after the seller claimed to have sent a letter withdrawing his previous offer. The plaintiff in that case was similar to Sarah in one respect; neither party happened to be home at the time of intended receipt, and thus the offer was never heard nor accepted. According to the opinion rendered in Henthorn v Fraser, "a person who has made an offer must be considered as continuously making it until he has brought to the knowledge of the person to whom it was made that it is withdrawn ... (as) an offer to sell is nothing until it is actually received."5 The precedent set in that case is applicable here, as Sarah did not listen...
Another point of contention put forth by Barry in his claim for breach of contract is that Sarah offered to hold the laptop "until the end of the week," while electing to sell the item to a third party on Friday. Again, this matter would be open to subjective determination of what constitutes the end of the week, as either Friday or Sunday may rightfully be considered the conclusion of any given calendar week. Had Sarah sold the laptop on Thursday, Barry's claim that a contract had been breached would be valid, but by waiting until Friday, Sarah honored the terms of her initial offer to withhold sale "until the end of the week."
Barry has claimed that Sarah offered to sell the laptop to him for a price of $1,000, and as evidence of his acceptance of this offer he has provided a copy of the voicemail message he left on her phone, one which stated "Just letting you know that we do accept your offer to sell the laptop for $1,000." This statement does not constitute a legally binding contract for a number of reasons, first and foremost of which is the assumption on Barry's part that Sarah's original offer was still tendered. In 1954 the High Court of Australia decided in the case of Australian Woollen Mills Pty Ltd. v Commonwealth that "it is necessary, & #8230; that it should be made to appear that the statement or announcement which is relied on as a promise ... was really offered as consideration for the doing of the act"6. As it pertains to the current dispute between Barry and Sarah, the preceding statement defines the 'promised act' as selling the laptop for $1,000 with no warranty, and offer which Barry ostensibly rejected by asking for a warranty to be included. By terminating the initial offer made by Sarah with his own counteroffer, Barry effectively forfeited his right to acceptance, as the statement made by Sarah was not offered as consideration of the terms agreed to by Barry7.
In the process of advising Sarah as to how to defend against Barry's claim that a contract had been breached, it is important to remember the transnational maxim of common law semper necessitas probandi incumbit ei qui agit8, which holds that the burden of proof falls squarely on the plaintiff in civil cases of this nature. This means that the onus will be on Barry to prove in
6 Australian Woollen Mills Pty Ltd. v Commonwealth (1954) 92 CLR 424 at 457.
8 Lucian Arye Bebchuk, Steven Shavell, 'Information and the Scope of Liability for Breach of Contract: The Rule of Hadley V. Baxendale' (1991) 7(2) Journal of Law, Economics, and Organization 284-312.
through the evidentiary process that either one of two conditions have been met:
1) Sarah offered to sell the laptop to Barry for $1,000 regardless of his additional request for warranty protection.
2) Sarah heard the voicemail on Thursday night or Friday morning, before selling the item to Aiden for an additional $200 profit.
If either of these claims can be proven to be true in court, it is reasonable to expect that a judge will deem Sarah in breach of a verbal contract that had been lawfully offered by her and agreed upon by Barry. As Sarah's legal counsel, I am confident that the first condition described above will be rejected in light of the established precedent concerning the rules of offer and acceptance, as Barry's introduction of the warranty stipulation effectively ended Sarah's initial extension of an offer. In fact, the precedent established in the case of Ex-parte Fealey9 in 1897 would suggest that, because Barry's action would not have benefited the offeror, but rather himself (by providing 12 months of warranty protection for no additional cost), his request for a warranty provision actually represented an distinctly different offer on his part, rather than his acceptance of the initial terms. The fact that Sarah did not immediately agree to the warranty provision is further proof that Sarah never intended to alter or adjust her initial offer in this manner, and in fact represents a rejection of Barry's counteroffer. To refute the second…
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