Contract Essay

Gertie places a notice in the trade journal ? Mung Monthly’ saying that she would pay ? 2000 against a ? wood nymph’ Mung vase with its authenticity certificate. The question is to know whether Gertie’s proposal is an offer and could lead to a contract . The notice in the trade journal stays a proposal to the public. This proposal could amount to an offer if it is intended to result in a contract, if the other party accepts it, and if it contains sufficiently definite terms to form a contract. Gertie’s notice is sufficiently definite (there is the price and the vase design) to be treated as an offer.

But is her proposal could be regarded as an invitation to treat? Two arguments show that Gertie’s notice does not have to be treated as an invitation to treat. First, the notice specifies that Gertie will pay a particular sum of money against a particular type of vase . This kind of proposal excludes the idea of negotiations . Second, Gertie’s proposal is an advertisement in a trade journal . And it was held in the case of Carbolic Smoke Ball Co (1893) that the advertisement was not an invitation to treat but an offer to the whole world.

Furthermore, Gertie may wish prospective suppliers to know that they will be able to deliver the vase by accepting the proposal and that they do not risk refusal of their ? acceptance?. Thus, Gertie’s proposal is to be treated as an offer. Both Maurice and Fred have seen the notice in the trade journal and they have a ? wood nymph’ Mung vase. It is interesting to see how Maurice has tried to make a new proposal in asking to Gertie whether a ? tree frog’ vase would do. Is this kind of proposal a counter-offer?

To my mind, Maurice has just asked to Gertie whether she was interested in the ? tree frog’ vase. It is not a real counter-offer. A counter-offer would have been in that case a purported acceptance which would have change the price, like it was in the case of Hyde v. Wrench (1840). For instance, Maurice would have suggested to Gertie a higher price for the ? wood nymph’ vase. Both Maurice and Fred have obtained the Mung Monthly authenticity certificate . Maurice posts it to Gertie by a private letter delivery service on 6th March . His letter arrives at 9am on the 8th March.

Fred decides to email Gertie on the 7th March with a scanned copy of his authenticity certificate. But it arrives at 11pm due to a problem with the network Gertie subscribes to. Gertie does not read her email till 10am. The problem is that both Maurice and Fred say that Gertie should buy their vase. The question is to know whether Gertie should choose Fred or Maurice. Which choice would be more profitable for Gertie? Gertie must take the safer solution in order to avoid a contractual dispute. Should Gertie buy Maurice’s or Fred’s vase?

The general rule is that an acceptance must be communicated to the offeror. The acceptance is generally communicated when it is actually brought to the attention of the offeror. But this rule is not an absolute one and knows an exception which concerns acceptances sent through the post. The postal rule of acceptance has been introduced with the Adams v. Lindsell case (1818). It was held that the acceptance takes place when the letter of acceptance is posted by the offeree. The acceptance takes effect when it is posted and not when it reaches the offeror.

Does the postal rule of acceptance apply to Maurice’s acceptance? Indeed, that is the situation of Maurice’s letter. By posting to Gertie the authenticity certificate of the ? wood nymph’ Mung vase, Maurice has expressed his willingness to sell his vase against the sum of ? 2000. Thus, Maurice has accepted the offer made by Gertie and his acceptance has been effective as soon as he posted it. Maurice’s letter arrives at 9am on the 8th March. But the contract is concluded and is effective when the letter of acceptance is posted.

So if Gertie decides to refuse Maurice’s acceptance on the 8th March it would be appear as a breach of contract. Nevertheless, the postal rule of acceptance is subject to some limitations. In Enthores v. Miles Far East Corp (1955) it was held that the postal rule did not apply to telexes and it was confined to non-instantaneous forms of communication. This solution is logical. The question is to know whether the latest QuickPost private letter delivery service could be regarded as an instantaneous form of communication.

The delay between posting and delivery is very short (2 days) but there is however a delay. That is why the postal rule of acceptance should be applied in that case. Even if the private letter delivery service is quicker than a regular post service it can not be regarded as an instantaneous form of communication. What about emails? In the case of emails and more generally all the forms of communication via computers, communication is virtually instantaneous and therefore is unlikely to be governed by the postal rule.

Fred has sent his acceptance by email on the 7th March but due to a network problem it is held in a computer server for 6 hours and arrives in Gertie’s inbox at 11pm on the 7th March. The focus of the postal acceptance rule is on the existence of the risk and not its occurrence rate, however e-mail will not take long to attain the level of a near perfect transmission rate such that the courts will have to recognise this fact. It is the exception rather than the rule that email will be delayed, but it still happens. Therefore the postal rule of acceptance should not be applied to e-mail.

Thus, Fred’s acceptance is effective when it is communicated to Gertie. She has not read her email till 10am on the 8th March even if the email was in her inbox at 11pm on the 7th March. But the contract is concluded when it the acceptance is brought to her attention (at 10pm on the 8th March ) As a conclusion, I would advise Gertie to choose Maurice’s vase even if it is illogical and unfair for Fred. To my mind, the postal rule is not really adequate in a modern and technologically developed society. We are actually confronted to two difficulties.

On the one hand, numerous cases of law about the postal rule of acceptance would encourage us to advise Gertie to choose Maurice’s vase because a contract has been concluded as soon as Maurice’s letter was posted. On the other hand, this solution is not fair for Fred who has chosen the email as a secure form of communication of his acceptance. But due to a scarce problem of network connection, it has been communicated after Maurice’s acceptance. A ? first come, first serve’ principle would enable that Gertie would have bought Fred’s vase. But for legal reasons, she should buy Maurice’s one. (1198 words).