Law an acceptance, consideration (an invitation to treat)

 Law for AccountingContract law is,essentially, the imperative necessity in binding a legal agreement between twoor more parties on the basis of a mutual understanding within terms andconditions of a written or verbal contract. The validity of a contract mustinclude key factors in order for it to qualify: an acceptance, consideration(an invitation to treat) and the intent to go through with creating legalrelations. An offeror is typically the party of which presents an offer to anofferee, one to whom an offer is made and  has the right to accept or reject theoffer.

                             An acceptance occurswhen the offeree expressly accepts the offer made by the offeror. To illustratethe general rule to the case of acceptance is that it must involveeffective communication between the two parties or authorization given to athird party on their behalf to accept.  Anacceptance can be valid to be accepted orally, via a telephone, or written informs of a letter or an email depending on the level of formality of thecontract.

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The offerer may demand a particular method of communication for theofferee to accept but a clear acceptance must be made. In the case of Entores Ltd vs Miles Far East Corp- Denning LJ, delivered the leading judgment. He said that thepostal rule could not apply to instantaneous communications, such as telephoneor telex: if a phoneline “went dead” just before the offeree said”yes”, it would be absurd to assume that the contract was formed andthe parties would not have to call each other back. LordDenning  LJ (1955, p.97)  explained “suppose for instance, that I shoutan offer to a man across a river or a courtyard but I do not hear his replybecause it is drowned by an aircraft flying overhead.

There is no contract atthat moment. If he wishes to make a contract, he must wait until the aircraftis gone and then shout back his acceptance so that I can hear what he says. Notuntil I have his answer am I bound.”  – Itmust be brought to the attention of the offeror when an offer is beingaccepted. Ifthe method of communication is being requested via postal services, the generalrule states that the acceptance is valid from the moment the letter ofacceptance has been posted, regardless of delays, or incidences of lost, stolenor damaged packages resulting in a failed delivery to the offeror.

In the caseof ‘Adams v Lindsell (1818)’, itestablishes the postal rule which states a letter with a correct address, alongwith the correct postage stamp, is classified as an acceptance. This is knownas ‘rule of convenience’, (Duxbury, 2015) and suggests that in the request of apostal acceptance, as an offeror; all risks associated with the form ofcommunication must be apprehended beforehand            An invitation to treatis an expression of willingness to negotiate which is not to represent an offerand/or cannot accept as a form to bind a contract. Thecourts take an objective approach in deciding whether a statement was an offeror an invitation to treat. It is essential to understand the difference betweenthe two; when accepting an offer it automatically signs you up into the bindingcontract, whereas an invitation to treat is the introduction to making anoffer. Invitations are some form of an advertisement in a way that it initiatesan invitation to bid or bargain for an item (or service), with these conditionsset, of course, however no party is obliged to continue with the sell or buy.                                                              To complete a contract,aforementioned, one party must make an offer and the second party must acceptthe offer. In the case of PharmaceuticalSociety of Great Britain v Boots (1953), the Poison Act 1933 was introduced.

The case explained: all prescribed drugs must be purchased under thesupervision of a qualified pharmacist, (Br Med J 1950;2:455). The arguments in this case,defendants were being prosecuted due to a pharmacist not being present at thetime of selecting the pharmaceuticals from the shelf. Firstly, the displayingof goods on the shelves was an invitation to offer without the supervision ofthe pharmacist. What constitutes as an offer here was presenting the goods atthe cash register had the intention to purchase the goods, and communicated so.The contract is accepted the moment the pharmacist accepts the customer’s offerby taking the cash in exchange for the product. In terms of acceptanceanalysis, the goods were displayed being an invitation, therefore the movementof cash from the customer to the cashier is the offer, and is complete whenpayment is taken and processed which implies acceptance.

The same analogy appliesin Fisher v Bell (1961) the lawsuitwhere a ‘flick knife’ item was advertised for sale in the shop window and the displayof the product was decided that it was an invitation to treat. Any consumer whomwished to enter the shop with the intentions of purchasing the knife at thepriced indicated in the shop window. The display was a mere invitation; meaningthat there were no forms of agreement hence no offence being performed,(Tillotson and Mulcahy, 2004). A bilateral contract is known to have an outstandingobligation remaining on both sides of the party which an offeror makes apromise in return for a future bargain from the offeree. The case Partridgev Crittenden (1968) exhibitsthe rule of advertisements for its understanding known as an invitation totreat. This advertisement was found in the section for classified advertisementand there was no evidence of the phrases for sale on view.The Tort of negligence measuresthe legal wrong doing where the defendant breached the applicable standard ofcare towards an individual. Where contract law focuses on thecontractual agreements between parties, which will outline the responsibilitiesand duties of each party, the law of tort strictly governs circumstances ofwrong doings affecting an individual.

Duty of care is an area in thetort of negligence regarding the moral and legal obligation to ensure thesafety or well-being of others across a range of factors including physical,mental injury and even economic loss. The way Duty of care is tested is withthree fields: forcibility, Proximity and Just and reasonableness. Thelevel of complexity in torts makes it difficult to define, it can be bestunderstood as: ‘a tort is conduct which renders the defendant liable unless hehas some defence.’ (Weir,2002). In the workplace there are legislations such as Health and Safety at Work Act 1974 forguidance to prevent the amount of injuries caused.

The case of Langley vs Dray (1988) examines forcibility; thedefendant driving a stolen car was chased by a police officer. The officerslipped and was injured in the process. The court rules that the defendant oweda duty of care as he knew or ought to have foresaw that the police would be inpursuit as thus should not have gone so fast. He had a duty not to create sucha risk.

For assessing proximity, we take from the Watson v BBBC (1999)case; the defendant failed to provide sufficient medical care at the ringside.The claimant suffered severe brain damage following an injury in the ring, butthe evidence suggested his injuries would have been less severe had bettermedical attention been available ringside. The court ruled that the sport’scontrolling body owned a duty of care to those who took part. Injury wasforeseeable. The licence system created proximity, it was just fair andreasonable to impose such a duty.

                                                                                                               Scenario 1 Analysis   Scenario 2 Analysis    Introduction to forming a PLC:Holding a title of a PLC contributesimmensely to the company’s financial status which can be seen as a prestigiousprofile within the industry. The main advantage of this is that it holds There are two mandatory documentsrequired to registering a public limited company to enable trading- A Memorandum of Association and anArticle of Association(a)  State the documents necessaryand the procedure to be followed in registering a  public limitedcompany and enabling it to start trading: In order to start a publiclimited company two documents are essential.. The memorandum of association,which is often simply referred to as the memorandum is the document thatgoverns the relationship between the company and outside stakeholders; allowingprospective investors to know what the company is to be used for and what risksthey will be taking with their money.

The memorandum is basically a statementthat the subscribers wish to form a company under the Companies Act 2006 andhave agreed to become members. The article of association outlines theresponsibilities of a director. In order to start trading as a public limitedcompany a company name would be needed as well as company details i.e theaddress of a Director as well as a company address and a statement of capital.Finally, you would need to incorporate your company whether it be via FormationAgents or an Accountant.

Duties Involved: (b)   Explain the duties of an agent that are implied into any contract inrelation to the law of agency: In relation to the law of agency an agent is therepresentation of a principal. In order to act accordingly as an agent a dutyof loyalty is expected towards the principal. This simply means the agentcannot act in his/her own interests or benefits when carrying out an action forthe principal. There is also a duty of care.

It is expected that the agent willexercise a reasonable duty of care when carrying out the duties on behalf ofthe principal. It is also expected that the agent keep the principal fullyinformed when carrying out an action and to also obey the instructions of theprincipal. The only times these duties can be exempted is if an emergencysituation should occur and the agent cannot come in contact with the principalor if a violation of the law should unfold. A failure to abide by these resultsin a breach of contract of Agency and the agent is therefore liable for anyloss sustained by the principle.

 

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