CONTRACT AND NEGLIGENCE

Aspects of Contract and Negligence for Business

Aspects of Contract and Negligence for Business

Case 1

Offers and Counter Offers

In the case 1 scenario, the offers and the counter offers are quite clear. As it mentioned in the case, the first offer made by Jones Ltd to Smith plc, with whom the company was in the negotiating phase and finally the offer made by Jones at the rate of $ 10,000 per annum for the next 5 years. However, for accepting the offer Smith need to reply that offer through mail but unfortunately due to wrong address written on the offer, Smith did not get the offer letter. In the mean while, Watson & Co. offered a deal to Jones at the rate of $ 9,000 per annum, whereas Jones quoted $ 8,000. The deal was done at $ 8,000 and Jones this time email Smith that the offer initially made by them has been withdrawn and Jones did not going want to start business with Smith. In this way, the offers and counteroffers come to an end in the case 1.

The operation of the Postal Rule

The operation of the postal rule was established in the 19th century; however, the posting rule mainly covers the area when there is acceptance. In the case 1, due to the wrong address wrote by Jones on the offer letter, Smith did not get the letter on the right time and thus Jones contracted with Watson & Co. It should be noted that the interesting implication regarding the operation of the posting rule is that the acceptance should be consider only at that time when the letter of acceptance posted by the other party (Dempsey & Forst, 2008, pp. 121-125). If the second party failed to reply back, the offer should be considered null and void. In the current scenario, the implication applies as well.

The time of communication of electronic messages

The basic concept behind the effective communication through the electronic means like email or fax is basically to overcome the time barrier. Therefore, the offer and acceptance made through the electronic means considered the source for saving the time. However, in the case of Jones and Smith, Jones emailed Smith as it gets done with the Watson & Co., and Smith got the email immediately. But the problem was that the no one read the email till 5 pm of the day and at that time Smith considering that the deal with Jones is done.

The revocation of an offer

The revocation of an offer is basically meant that the offer recalled or annulled. It is considered as the reversal of the act, or recalling of the offer. The basic requirement for the revocation of the offer is that the offeree did not open the offer letter that has been posted to him. However, the revocation comes effective once it is upon receipt (Andrews, 2011, pp. 135-139).

Similarly, in the case of Jones and Smith, revocation offer applies because the posted was not reached in ...