The English law of contract is the origin of modern contract law to be found in the United States and in the nations of the British Commonwealth which adopted the common law system. It has also been particularly influential in a number of jurisdictions with civilian roots, not surprisingly the different systems have developed in different ways . In this law, acceptance is a sensitive case, concerning both the offerer and the offeree. Here, when an offer is made with the intention of entering into a contract, the acceptance must be communicated to the offerer, unless the acceptance is by conduct. This is where the unilateral acceptance comes to place. A unilateral contract is a contract where an offer is made not to a specific party, but to anybody . Such a contract, to be valid, must have the compliance with the same particulars as any other contract, except that the acceptance of the offer may be by conduct, rather than by notification. However, in relating it with the Lando principles, perhaps there are some differences. Perhaps there are also differences in distinguishing an offer and invitation to treat? Thus, in order to find out, the similarities and differences between the English law of contract and the Lando principles will be reviewed in this paper in terms of the several issues mentioned. This paper aims to clear their differences and similarities between the contract laws to be able to provide analysis and in order to determine why it is important to know the differences between an invitation to treat and an offer.
Assumption
The assumption in this research report is that “it is important to know the difference between an invitation to treat and an offer because it will determine the flow of the whole interaction committed by the two interacting party that would be necessary in determining the nature or origin of how the contract has been promised or committed.”
Literature Review
Identifying a Contract
Logically and in legal means, a contract consists of voluntary promises, which the law will enforce, between competent parties to do, or not to do, something. defined it “…as a transaction which consists wholly or mainly of a legally binding promise or set of promises” . Such binding promises can be oral or written. Furthermore, it depends on the situation if whether a contract could obligate someone even if the offeror or the offeree wants to call the deal off before receiving anything from the other side. The details of the contract (basic details such as who, how, what, how much, how many, when, etc.) are considered its provisions or terms.
In contracts, moreover in English law, a lawyer is not required for it to be formed. If both sides would satisfy the maturity and mental capacity requirements, they don't need anyone else besides each other. However, getting a lawyer is still advisable when signing a contract especially when the deal involves a large amount of money, for precautionary purpose if ever things won’t go too well.
A promise is considered and qualifies as a contract when it is supported by the exchange of something valuable between the participants or parties. Known as consideration, it often involves money, in exchange for property or services, but can be some other bargained-for benefit or detriment. In addition, the final qualification for a contract is that the subject of the promise may not be illegal.
Offer and Acceptance
As mentioned, offer and acceptance is a sensitive part of the contract law. They are fundamental parts of a contract, once capacity is established. An offer is a communication by an offeror of a present intention to enter a contract. Thus, an offeror is simply known as the person making the offer. It is not simply an invitation to bargain or negotiate. In order for the communication to be effective, the offeree must receive it. In a contract to buy and sell, it must be clear: who is making the offer, what is the subject matter of the offer, how many of the subject matter does the offer involve (quantity), and how much is offered (price). Thus, a person who has had a judgment given against him has not really contracted or promised, though he is bound to satisfy the judgment. Yet occasionally, as where a judgment is entered by consent as the result of a compromise, the judgment does embody a real agreement, and we may in such cases see a genuine contract deriving force from its judicial form. However, the offeror can act according to the mail box rule. This means that he or she is not obligated by his or her offer even though a final date for acceptance is given and the offer can in reality be withdrawn. It also means that it may be withdrawn at any moment before it has been accepted . Both parties are still in the offer unless a given time elapsed or if either party dies before acceptance . “Even an express declaration that the offer shall remain open until a certain time will not be binding unless it was made by deed, or something was given as a consideration for it, as in the case of Stock Exchange options” . The offer only becomes a binding promise when it is accepted. It can be accepted through words written or spoken, or by conduct showing an intention to accept. Thus, if a counter-promise is proposed as the consideration, the acceptance amounts to a giving of the counter-promise; if the consideration is to consist of the doing of an act the acceptance will consist of the doing of the act. However, it should be noted that in the English law, verbal or formal non-verbal communication is not important when accepting an offer. Geldart (1995) explains that the offer may, of course, prescribe communication as essential to a valid acceptance. But it may often be inferred from the nature of the offer, and the circumstances under which it is made, that actual communication is not required. Thus, informal non-verbal communication can be a basis of the acceptance of the offeree on the offeror. This is commonly the case where acceptance is to be made by doing an act. But, where the communication can be said to be instantaneous, for instance by telephone, teleprinter, or fax, the contract is complete only when the acceptance is actually communicated to the offeror. However, in snail mails, even if the letter did not reach the offeror, it is still a valid acceptance given that the letter was sent within the time span of the offer . Acceptance must be communicated expressly or be implied by conduct, except in instantaneous circumstances as mentioned.
Not surprising enough, the Lando principles or the European Contract Law, doesn’t have any much difference with the English Law when it comes to the requirement of communication in the acceptance of the offer. According to Article 2.204, ‘Any form of statement or conduct by the offeree is an acceptance if it indicates assent to the offer’ and ‘Silence or inactivity does not in itself amount to acceptance’ (European Union Commission on Contract Law, 2002). Thus, similar to the English contract law, the Lando principles also implies that acceptance of the offer can be done through either formal or informal non-verbal or verbal interaction or action. However, it can be observed that the Lando principles did not specify any conditions to instantaneous responses for them to be considered accepted. The Lando principle stated ‘any form of statement’, which means acceptance can be made even without direct communication with the offeror in instantaneous circumstances.
The difference can also be observed in the principles of binding of promises. In English law, a promise by one party which is not supported by consideration is generally not binding . Here, an unwarranted promise for which there was no exchange is not binding. Furthermore, a promise made in respect of an act which has already been performed is not binding, since the rescue was not exchanged for the promise, and past consideration is no consideration contrary to this, the Lando principle believes that there are promises, which should be enforced though they lack consideration.
Offer and Invitation to Treat
As can be observed and analyzed, the English law of contracts is sensitive especially when it comes to decision-making or making the offer a binding promise. This is so, because once a decision has been made, there is no way that the offeree can take his word unless someone violates a certain rule that can lead to a breach of contract. Thus, the offeree should be aware about the difference between an offer and an invitation to treat. In English Law, an invitation to treat is not an `offer' in the contractual sense, and agreement to its terms, even if unqualified, does not constitute the formation of a contract . Thus, for instance, displaying goods for sale is an invitation to treat and not an offer. In other terms, an invitation to treat is a weaker form of offer, which only shows the expression of interest to set up a contract . An invitation to treat is an invitation or an enticement to others to make an offer (Victoria University School of Law, No Date). In English Law, however, it is important that the client should know the difference between invitation to treat and offer because there isn’t a rule that will make the invalidity of a contract in ‘good faith’. Once a contract has been made because the offeree made the invitation to treat as an offer and transformed it into contract, there is no way the offeree can get out of it out of ‘good faith’. For instance, according to , English courts have held an obligor to a contractual undertaking even though the obligee did not have any respectable motive to hold him. English law does not recognise unreasonableness and unfairness as grounds for the invalidity of contract terms . Thus, a man taking the bait of an invitation to treat, converting to it to an offer and then to a contract (i.e. purchase of a displayed medicine), cannot breach the contract despite finding out later about the unfair nature of the offer (i.e. 50% price increase from the standard price).
On the contrary with the English contract law, the Lando principles stated in its art 1:201 that it is provided that each party must act in accordance with good faith and fair dealing . Explained that its purpose is to enforce community standards of decency, fairness and reasonableness in commercial transactions. Furthermore, it supplements the provisions of the Principles and it may take precedence over other of the Principles when a strict adherence to them would lead to a manifestly unjust result. In the Lando principles, even if strict compliance with the obligation is of essence of the contract under art 3.l03 (a), a party would not be permitted to terminate because of a trivial breach of the obligation. However, there is a need for good faith to be presumed. Thus, the party who alleges that the other party has failed to observe good faith and fair dealing has to convince the court.
Breach of Contract
Knowing the difference between an invitation to faith and an offer can also be rewarding in a sense that it will not create a problem to both of the offeree and offeror in the future that could lead to the troublesome process of ‘breach of contract’. In the English Law, ‘any failure to perform what is promised is a breach of contract’ . As a remedy, a breach of contract will give the injured party the right to bring an action in which he will recover damages. Accordingly, there is no breach unless the aggrieved party would be entitled to claim damages. Thus, breach presupposes liability for damage .
In the Lando principles, breach is known as non-performance and similar to the English Law, it occurs whenever a party fails to perform any of its obligations under the contract . However, contrary to the English law only the failure to perform what is promised is considered a breach, the Lando principles imply that: “Non-performance may consist of a defective performance, failure to provide goods which are free from any rights and claims of a third party, failure to effect a performance in time, which may be a performance that occurs too early, too late or never” . Here, violation of an accessory duty is included, such as the duty not to disclose the other party's trade secrets. Furthermore, ‘where a party is obliged to receive or accept the other party's performance, failure to do so also constitutes non-performance’ . In this principle, damage is not the only remedy rather it depends on whether the non-performance is excused. Non-performance is excused if the defaulting party "proves that it is due to an impediment beyond its control and that it could not reasonably have been expected to take the impediment into account at the time of the conclusion of the contract, or to have avoided or overcome the impediment or its consequences .
Method
Primary and secondary research will be used in the study. The researcher will interview 20 juries that handled cases of contract breaches and will ask them the importance of being aware about the differences between invitation and offer. Their responses will serve as the primary data. On the other hand, the researcher will also collate previous cases of contract breach as well as other related literature for the same aim. They will serve as the secondary data for the study. The study will be purely qualitative in nature and will be analyzed based on the framework approach .
Feasibility of the Research
The study will be feasible in a sense that the researcher only needs to spend some time interviewing members of the juries and researching literature. Expenses will be on basic fees such as computer rentals, photocopying, compiling, etc. and is estimated to only reach $250 or below. Of course, the budget is subject to rise depending on uncontrollable situations.
0 comments:
Post a Comment