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Need to answer the question based on Take home Case Study.
Case facts and issues:
In this case, Sally, a diamond jewellery designer met at a diamond exhibition a rich diamond buyer Harry who got interested in a blue diamond ring that she had designed. They decided to remain in touch and a few weeks down the line Harry writes to her evincing his interest in buying that ring. Sally responds by mail stating that she can immediately sell the ring to Harry for $100,000 but that since someone else too was interested in the ring, Harry must respond within three days. The next day Harry replies by mail with his acceptance to her offer and willingness to pay the stated price. But bad weather delayed his letter and, in the meantime, Sally sold the ring to the other buyer.
Now, the issues at hand are given under two situations:
Situation 1: When Harry sends his reply to Sally by mail:
• Whether or not there is a contract.
• Whether or not Harry can enforce it.
• Whether or not there is a contract.
• Whether or not Harry can enforce it.
Situation 2: If Harry were to send his reply to Sally by email:
• Whether or not there would have been a contract.
• Whether or not Harry would have been able to enforce it.
• Whether or not there would have been a contract.
• Whether or not Harry would have been able to enforce it.
Relevant case law / statute:
Application of Contract law of Australia, which is a private civil law, in the given instance will help address the pair of questions under the first situation. Under the second situation, the answers to the questions will be guided by The Electronic Transactions Act.
Legal principles and their application:
In this instance, the parties agreed to be legally bound. There was a valid offer from Sally who was willing to sell for $100,000 the same blue diamond ring designed by her.
To her offer, Harry did give an acceptance and this was by mail. An important fact to be noted in this instance is that Sally already had another prospective buyer interested in the blue diamond ring and that Sally had asked Harry to make sure that he responds to her offer in three days. Sally had not prescribed any particular method of acceptance as the only acceptable method. This means that acceptance given by Harry using any method will be legally effective so far as it proves to be equally or more advantageous to Sally. Thus, any delay would defeat the offeree.
There is, however, an exception to the aforementioned general rule in instances where postal services were contemplated as the medium of exchange of offer and acceptance. This exception is the “Postal acceptance rule” which states that as the letter of acceptance is posted, there is immediately a valid acceptance in place and so long as any delay or non-delivery of that letter was not the fault of the offeree, the acceptance will continue to be valid. Thus, even if there was a delay in the acceptance letter reaching Sally by mail because of bad weather, based on the “Postal acceptance rule”, it can be said that Harry did give a valid acceptance to the offer that he had from Sally. Harry could not have done anything about any bad weather coming into being once he had posted the acceptance letter.
In this case, there was also valid consideration i.e. Sally would sell the blue diamond ring to Harry and in return Harry would pay her $100,000. The agreement between them was genuine in the sense that no unconscionability, duress, undue influence, mistake or misrepresentation was involved as is evident from the facts provided.
If the communication between Harry and Sally were to be instantaneous (such as by emails), then The Electronic Transactions Act provides that acceptance of an offer via an email is said to have taken place when such acceptance email leaves the computer of the offeree and enters the internet. The offeror bears the transit risk of the email. This is akin to the “Postal acceptance rule”.
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Place Your OrderBrief conclusion:
Situation 1: When Harry sends his reply to Sally by mail:
It is clear from the application of legal principles as demonstrated above that there certainly was a contract in place between Sally and Harry. Besides, given that Harry’s acceptance by mail was a valid acceptance based on the “Postal acceptance rule”, Harry can enforce the contract.
Situation 2: If Harry were to send his reply to Sally by email:
It is clear from the application of legal principles as demonstrated above that there was a contract in place between Sally and Harry. Besides, presuming instantaneous communication between the two, Harry’s act of sending the email signifying his acceptance to Sally’s offer would be regarded to be valid.
It is clear from the application of legal principles as demonstrated above that there certainly was a contract in place between Sally and Harry. Besides, given that Harry’s acceptance by mail was a valid acceptance based on the “Postal acceptance rule”, Harry can enforce the contract.
Situation 2: If Harry were to send his reply to Sally by email:
It is clear from the application of legal principles as demonstrated above that there was a contract in place between Sally and Harry. Besides, presuming instantaneous communication between the two, Harry’s act of sending the email signifying his acceptance to Sally’s offer would be regarded to be valid.
References:
1. Latimer, P. (2012). Australian Business Law. Sydney, NSW: CCH Australia Limited.
2. McKendrick, E., & Liu, Q. (2015). Contract Law: Australian Edition. New York, NY: Macmillan International.
2. McKendrick, E., & Liu, Q. (2015). Contract Law: Australian Edition. New York, NY: Macmillan International.
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