Communication of Offer and Acceptance and Revocation Assignment

Assignment Task

Question

1. Does any contract exist between Tim and the store?

Rule of Law

According to common law, a contract is referred a contractual relationship between two people. It involves an offer, acceptance, and consideration between the parties. An offer can be made by any individual. An offer can be made by any person to any other person, or community at large. However, an advertisement is different from an invitation to treat (Patridge v Crittenden 1968 (1) WLR 1204) . An invitation to treat or sell is referred to any sort of advertisement with an intent to sell any item at a specific rate, According to the Pharmaceutical Society of Great Britain v. Boots UK, QB, 1953 it was ascertained that the products displayed on a shelf of a shop are an invitation to sell and any person can come and enquire about the product. Any person can make an offer to buy the product at any price however, that offer is regarded as a counteroffer. A counteroffer is considered a rejection of the offer as per the case of Hyde v. Wrench UK, 1840 . There are numerous ways by which an offer can be terminated such as revocation, rejection, failure to accept on time, death, and loss of a condition. Revocation refers to the process of terminating the offer at any time before the acceptance unless the agreement is fulfilled by consideration. For revocation to be effective, it must be communicated to the offeree by any means such as postal, or mail. The Electronic Transaction Act (ETA) states that mail can be used for communication between parties and if the mail is received in the mailbox of the offeree it is said to be effectively communicated, read, and accepted by the offeree. According to section 13 of the ETA, the mail is considered an effective means of communication and as per section 11 of the ETA, when the mail reaches the system of the other party it is said to be effectively communicated. According to the judgment in the case of Goldbororough Mort v. Quinn, (1910) the offeror has a choice to keep the offer open for a stipulated time whereas he is not bound to keep the promise. To bind himself under the promise to sell the product after some time, the offeree must have paid some consideration in return. Otherwise, the person after sending the notice of revocation to the offeree can revoke his offer to sel .

2. What are the different types of business structures that David and his wife can form?

Analysis

Most business structures in Australia are either small-scale partnerships between married couples or family members or are proprietary companies. A general partnership includes a minimum of 2 partners and a maximum of 20 partners. General partners mostly have personal and unlimited liability and they need to be registered following the rules of the partnership act. The advantages of the partnership are fewer number formalities while registering, tax benefits, and inexpensive, shared skills of partners. The disadvantages of the partnership are the unlimited liability of partners, fiduciary duties of partners, and less control over management. Proprietary companies are usually small in size and hence, need fewer requirements to be followed while registration. Proprietary companies cannot raise capital from the general public but take loans from banks. They can have a sole director and shareholders. The various advantage of the companies is limited liability, separate legal entity, and transferability of shares and various disadvantages are higher cost of maintenance of the company, possible loss of control, and loss of privacy.

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