Contract Law Case Study

A. Concern v Good

The incident between Mr. Good and Mr. Concern is being introduced in this case. Mr. Good put up an article on The Best Daily saying that he would share half of the advertising cost for anyone who places an advertisement in Best Daily with the intention of ‘initiating major legal response to raise climate change consciousness of the people of Hong Kong’. Our client, Mr. Concern who responded to Mr. Good’s offer, placed advertisements in 15 newspapers expressing ‘support for social reform for the protection of environment’. This case arises when Mr. Concern could not get the 50% advertisement fees from Mr. Good and is looking for compensation. Therefore, it is clearly that Mr. Concern is the plaintiff, and Mr. Good is the defendant.

Unilateral offer In this case, we have to decide whether this is an existence of legally binding offer -unilateral offer. Therefore in this case, we will have to explore if Mr. Concern is to be bounded by such offer. A unilateral offer refers to a party making a promise of reward on performance of some act. The offer is only accepted by performance of the requested action. Anyone who knows about this offer may complete the act and claim the reward.

Acceptance nature Therefore under unilateral offer, Mr. Concern can only claim his rewards- 50% of the advertising fees when he comply fully Mr. Good’s offer. That is ‘to initiate major legal response to raise climate change consciousness of the people of Hong Kong.’ In this case, Mr. Concern posted advertisements to ‘express support for social reform for the projection of environment through discussion and debate in schools and universities in Hong Kong.’ This is in fact not the stipulated act of the Good’s offer. Therefore under such circumstances, the rewards could not be claimed when the stipulated act is not completely and fully performed and executed. And Concern were not entitled to any rewards since he did not comply with the terms of offer at all. Therefore Good do not have any responsibility to provide the 50% advertising fees as Concern requested.

Ignorance Acceptance in ignorance of an offer could not create a contract. The offeree must know the essence of the terms of the offer and conduct himself in reliance of the offer. According to the incident, Concern placed advertisements only in respond to Mr. Do-it All repentance of Good’s offer. It implied that Concern did not read about Good’s offer directly and therefore his act of being ignorance about the offer cannot form a legally binding contract relationship. This can be examined in a very similar case,  Judge Lok said, ‘As the plaintiff learnt about the 2nd defendant’s appeal from an interview of the 3rd defendant reported in a magazine published by the 4th defendant, and such report, says the plaintiff, did not truly reflect the offer made by the 2nd defendant,…’ This illustrated that Concern was not bounded by an unilateral offer with ignorance of the terms of the offer.

Vagueness and Uncertainty Where the parties have omitted, or have vaguely expressed, key terms, the courts would have no alternative but to hold the agreement void for uncertainty. Good offered to support half of the advertising fees for whoever initiates major legal response to raise climate change consciousness of the people of Hong Kong. In this case, the defendant-Good’s offer was not clear or certain enough to create a legally binding offer. The term ‘climate change consciousness’ and ‘legal response’ is too vague and subjective that each individual would have different understandings towards these terms according to their different backgrounds and beliefs. With these vague and ambiguous terms of offer, it lacks the certainty to make it legally binding. On the other hand, the terms of the offer is exceptionally wide, where if it really came to a concrete offer, Good’s liability would be unlimited in respond of paying half of the price for whoever comply with that his specific requirement.

Conclusion Out of all these discussed issues, it came to conclude that Concern would not be able to claim back the 50% advertising fees from Good. Since an unilateral offer fail to take place under all these factors discussed.

B. Candy v. Choco

Candy offered to buy Choco’s Mercedes Benz Car at $100,000 in the letter to Choco, saying that she will consider the car to be sold to her at the quoted price if she could not hear from Choco before 10 December. Where Choco reply in respond saying she is only selling her car at $125,000. However due to misplacement of the letter by the post office, her letter could not reach Candy, where leading the case to the court. From that, our Client, Choco is the defendant , and Candy is the plaintiff. The major issue in this case is whether communication of acceptance takes place.

Communication of acceptance Since acceptance is a response to an offer it naturally follows that acceptance will not normally be regarded as effective unless or until such response is communicated to the offeror. One reason for the rule that acceptance must be communicated is the difficult of proving an uncommunicated decision to accept. According to Lord Denning, ‘Not until I have his answer am I bound.’ That implies that in this case, even if Choco would like to accept that offer from Candy, she is not bound until she her acceptance is communicated to Candy.

Silence is not sufficient Candy mentioned in her note that ‘If I do not hear from you before 10 December, I will consider that car mine at the quoted price’. This statement is invalid according to the term under communication of acceptance, saying that silence is not sufficient. As acceptance must be communicated to the offeror, silence is not normally sufficient to amount to acceptance.

According to Willes J, one can vest the property in the offer to the plaintiff not until acceptance is being communicated. Therefore Choco is not bound to sell her car to Candy as communication of acceptance does not exist and it is up to her to sell it or not at the quoted price.

a. Postal Rule In this scenario, Choco communication of acceptance is failed in a sense that she put insufficient number of stamps on the post and lead to failure of postage. Postal rule applies in this case, acceptance takes place when the acceptance letter is validly posted, even if it never arrives. Therefore it is in exception to the general rule that acceptance must be communicated to the offeror.

However this rule may become invalid when default takes place outside the Post Office, such as miswritten address or inadequately stamped letters. Such that Post office is not liable for all these faults committed by the sender himself, which means that when Choco insufficiently stamped her reply letter, without the validity of Postal Rule, communication of acceptance does not take place and therefore she is not bound to sell her car to Candy at the quoted price.

b. Consideration

Contracts do not only come with written form but also in oral means. Contractual agreement takes place when one orally communicates offer and acceptance. In this case, Candy promised Choco for paying $25,000in accordance to the winning of a car race bet is an oral agreement. However it is only valid if it fulfills the requirement of consideration.

A valuable consideration, in the sense of law, may consists either in some right, interest, profit or benefit accruing to the one party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other. While past consideration refers to the consideration exists when the apparent act or promise of consideration occurred before the promisor’s promise. In order to make a contractual agreement valid, consideration must not be past.

In this case, Candy’s promise- ‘paying $25,000’, is after the benefit- winning the racing bet after purchasing the car and so it is regarded as a past consideration since she won the racing bet before she promised. Hence, choco would not be able to entitled to the reward and get back the $25,000.