Business and Law Essay
Business and Law
1) The first thing to consider is whether there is a valid contract between Ada and Ben on purchasing Bens’ BNW car. A valid contract consists of offer, acceptance and consideration. “An offer is a definite promise or proposal made by the offeror with the serious intention of being bound by such promise or proposal, if it is accepted by the offeree.” In this case, Ada’s letter on requesting Ben to sell his BNW car for $80,000 should compose an offer. It is because the terms are in a definite form capable of being accepted in identical terms. “An agreement comes into existence after the offeree unconditionally accepts the offer”. On the second day, Ben accepted Ada’s offer and an agreement has been made as Ben replied Ada “Sure” by voicemail. As Ada did not clearly indicate the method of acceptance, the instantaneous voicemail message left by Ben is counted as a valid method. However, as the postal rule does not apply to situations where the acceptance of an offer is communicated by any instantaneous methods, the contract is complete only when the acceptance is received by the offeror in such methods.
In Entores Ltd v miles Far East Corp, a contract was made between the parties only when the offeree’s acceptance was received by the offeror. Therefore, as Ben used voicemail, which is also a kind of instantaneous means, as an acceptance method, a valid contract will only be made when Ada received and listened to Ben’s voicemail. So no contract was made in this stage yet. However, Ben then changed his mind and sent a letter of revocation to Ada. The significant part then appeared. Although Ben sent a voicemail message to accept Ada’s offer first, and posted a revocation letter to Ada afterwards, the letter reached Ada earlier than the voicemail. According to the general rule, the revocation of an offer becomes binding when it comes to the knowledge of the offeree and an offer can be revoked at any time before its acceptance. And at the moment Ada received Ben’s revocation letter, she still have not received Ben’s voicemail acceptance. As I analyzed before, for instantaneous methods, the contract is only complete when the acceptance received it, not based on the moment of sending. Ben’s revocation has already become effective when it reached Ada and the contract was not completed. Hence, no valid contract was made between them.