Contract law Essay Example | Topics and Well Written Essays - 2000 words - 1

Contract law - Essay Example Consideration refers to something of value which is provided for a promise and must be provided to enforce the contract. An agreement not supported by a consideration is not binding An offer portrays a will to contract on the basis of the specified terms and once accepted by the other party, the offeror is bound if through the offer, the contracting party is convinced that the offeror intends to transact as per specified terms. For instance in the case of Carlill v Carbolic Smoke Ball Company [1893] 2 QB 256, a medical firm placed an advert for its new drug called carbolic smoke ball would cure flu. The advert further stated that buyers of this drug would be paid ?100 if the drug did not cure as provided. The court held that the advertisement was actually an offer which was biding. The following section is an advice to Cleanaway Limited as to whether they are contractually bound to provide cleaning services to the Council. Evidently, Cleanaway made an offer to the Council by agreeing to provide a quotation for their service on Monday 21 September. Initially, Cleanaway had made an offer for house cleaning services on hourly basis which was placed at ?40 per hour. However, the Council seemed not satisfied with initial offer that was made on their standard form. On Monday 28th September, the Council sent a fax asking for another quote now on per unit basis, to which Cleanaway Limited responded via fax the following day at ?200 per house. The second offer stipulated that both the standard terms and conditions applied. Based on this, Cleanaway Limited had made two offers to the Council and on the part of acceptance; Cleanaway expressly stated that the council must do it in writing by Friday 2 October. This is a clear indication that the offer had a stipulate period after which it could no longer apply. According to MARSHALL (2012), acceptance to an offer represents unqualified and final expression of assent to the terms of an offer. It represents a manifestation by the recipient to be bound by the terms of the offer. Ideally, an offer has to be accepted precisely to form an agreement. Such an offer must be accepted and all terms complied with. According to ZYWICKI (2008), acceptance has no legal effect until it is communicated to the offeror since it is important for the offeror to know that his offer has been accepted. In this vein, the common law provides that postal acceptance becomes effective when the acceptance letter is posted regardless of whether the letter is delayed, destroyed on misplaced when in transit. However, the postal rule fails to apply when the offer excludes such provisions expressly. Communication via post creates some practical difficulties considering that an offeror can withdraw an acceptance before it reaches the offeree. In this regard, there is an exception to the mode of communication. In Adams v Lindsell (1818) and Household Fire Insurance v Grant (1879), the court held that the decision to treat postage as a sig n of completion of an acceptance can be risky due to problems of loss and delays. As such, postal acceptance rule can only apply in circumstances where use of postage was reasonably contemplated by both transacting parties or was indeed stipulated by the offeror in the offer. Having said that and by considering technology advancement, the court is presently trying to confine the scope of postal acceptance principle. In Holwell