The Law of Contract Mike and Bob

Question: Discuss about the The Law of Contract Mike and Bob. Answer: Issue The issue in first case is to determine whether there is a contract formed between Mike and Bob. The issue in second case is to comment whether Bob and Tom have entered into legal relation or not. The issue in third case is to comment whether there is a lawful consideration present between the parties and if bob is legally responsible to extend the computer to Steve or not. The issue in the fourth case is comment whether there is a contract formed between Mary and Bob on the account of unilateral mistake and to forward a legal advice to Bob regarding his contractual liabilities. Law Individual who directs an offer is termed as offeror and the person who receives it is termed as offeree. In order to bring about validation of the acceptance, the offeree needs to make an unconditional acceptance (Richard, 2003). When the offeree has sent any conditional acceptance against the offer, then it is called as counter offer. The drawback of sending a counter offer is that it terminates the original offers as per the verdict of Hyde v Wrench (1840) 49 ER 132 case. It means, the offeree cannot accept the original offer after extending the counter offer and no contract would be formed based on the revoked offer (Andrews, 2011). The witness of this understanding is Normile v Miller, 326 .S.E. 2nd 11(1985) case. An offer would be enforceable when it was successfully accepted on behalf of offeree. When unconditional acceptance has been sent on behalf of offeree through postal media, then at that moment contract is formed and it becomes enforceable. Further, according to the judgment made in Dickinson v. Dodds(1876) 2 Ch.D. 463 case, if the offeror aims to cancel the offer, then it is essential that he must inform the offeree before the offer gets accepted on the part of offeree (McKendrick, 2003). Further if the offeree has accepted and sent acceptance via post then the acceptance is enforceable at the moment the acceptance letter leaves the offeree and then the offeror cannot cancel the offer and an enforceable contract has been formed between the parties as given in the verdict of Adams v. Lindsell (1818) 106 ER 25 case (Peel, 2008). According to contract law, parties cannot form a contract based on past consideration. It is noteworthy that any previous act, promise or favour would not be held legally valid to use for contract enactment. The above understanding has been highlighted in Re McArdle (1951)case (Carter, 2012). The principle of doctrine of promissory estoppel protects the rights of innocent party who has mainly conducted work while relying on the promise made by the promisor. According to the verdict of Waltons Stores Ltd v Maher (1988) 164 CLR 387 case, when parties do not want to enter into contract but due to any mistake on the part of promiser an acceptance is made for offeree, then also the parties are legally bound to complete the contractual obligations(Andrews, 2011). Application Offeror Mike has extended an offer to buy laptop from Bob. He has stated in the offer that $300 would be the price of laptop including GST.Bob the offeree has made an acceptance that amount $300 would not include GST and communicated the same to Mike. This conditional acceptance would result in counter offer against the initial offer. Therefore, the initial offer also gets revoked and hence, the offer is no more valid for acceptance to offeree. Any acceptance on behalf of Bob with respect to initial offer would not be considered a legal acceptance because the initial offer does not exist. Hence, there is no liability on behalf of Mike to pay the amount or accept the delivery because no contract has been enacted between them. On January 10, Bob made an offer to buy hard drives from Tom and the offer had been accepted on behalf of offeree Tom. In regards to communicate the acceptance, Tom had used postal media and sent the acceptance on January 12. It is apparent that acceptance is unconditional and legal. This means the acceptance resulted in contract formation at the time when Tom has posted the letter. Further, Bob cannot cancel the offer after the enforceability of acceptance. Hence, a valid contract has formed between Bob and Tom and Bob is legally bound to complete the contractual duties. Steve has performed a favour to Bob by taking care of Bobs cat when Bob was out of town. After that, when Bob has returned home, Steve asked him to issue a new computer. Bob agreed to issue computer to him because he had kept the cat on behalf of Bob. However, Bob denies issuing the computer. In this case, for performing the present act, they are referring to a past favour which leads to a past consideration. Therefore, no contract would be formed between them on the account of past consideration. Mary offers a letter to Bob about the van which Bob does not want to buy. However, he has mistakenly signed the letter and same has been faxed to Mike. Both Mary and Bob were not aware about the mistake. Mary has received the letter and on relying on Bobs promise, she has ordered another van and delivered the available van to Bob. In this case, the innocent party Mary has the rights to ask Bob to complete the promise or she can claim for damages under the provisions of doctrine of promissory estoppel. Conclusion 1st case: There would be no contract enacted between Bob and Mike because Bob has extended a counter offer against the original offer which resulted in termination of initial offer. 2nd case: A valid enforceable contract has been formed between Bob and Tom because Tom has sent the legal acceptance to Bob that resulted in contract formation. 3rd case: Past consideration cannot be used to enter into a present contract and thus, no contract would be formed between Steve and Bob. Hence, Bob is not legally binding to extend the computer to Steve. 4th case: Due to the applicability of doctrine of promissory estoppel, Bob has entered into contractual relation with Mary and thus, liable to complete the contractual duties. Referencs Andrews, Neil, (2011). Contract Law (3rded.). Cambridge: Cambridge University Press. Carter, J. (2012). Contract Act in Australia (3rded.). Sydney: LexisNexis Publications. McKendrick, E. (2003). Contract Law (5thed.). Basingstoke: Palgrave. Peel, E. (2008). The Law of Contract (7thed.). London: Thompson. Richard, S. (2003). The Modern Law of Contract (5thed.). London: Cavendish. Case Law Hyde v Wrench (1840) 49 ER 132 Dickinson v. Dodds (1876) 2 Ch.D. 463 Adams v. Lindsell (1818) 106 ER 25 Re McArdle (1951) Ch 669