Agreement Revision Help! Watch

JohnC2211
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Doing a problem question for agreement, concerns the fact that I *think* all 3 people have made a valid acceptance, but the offeror only has a limited stock, and the combined acceptances add up to more than what he has. I'm not making a lot of sense really, but I'm going to paste the question and then my answer, and could you please see if I'm missing anything?


The question:



Alex runs his own business selling wine and on 1st January sends out the following circular letter to some of his regular customers:

"To clear remaining stock, I will, with immediate effect, be selling cases of Beaujolais Nouveau 2004 at the special discount price of £40 per case for the first 35 cases I receive orders for. As soon as I have your order, the wine is yours!"

Alex has 35 cases of the wine remaining and puts these to one side. He then realised that due to high demand in his shop he could sell the wine at a much higher price there. Therefore, sends a second circular letter to the same customers informing them that the discount price is no longer available. This letter is sent on 10th January and received by the customers on 15th January.

On 14th January, Bradley posted a letter to Alex ordering the whole stock of 35 cases at the discount price. Alex received the order on 16th January.

Caroline telephoned Alex's office on 14th January to order 2 cases but there was noone in the office. So, she sent an e-mail message to Alex's office ordering wine. Alex, who had been away on as wine buying trip, did not read the message until he came into the office on the morning of 16th January.

Dominic wanted to order all 35 cases and sent a fax to Alex’s office on the afternoon of 14th January. After sending the fax, Dominic received a message from his fax machine telling him that the transmission had been completed successfully. Unfortunately Alex’s fax machine had run out of paper and his machine could not print the message until paper was inserted into the machine, which he was able to do on the morning of the 16th January. The machine showed that the message was sent by Dominic on 14th January.

Discuss whether Alex is obliged to sell any wine to Bradley, Caroline or Dominic at the discount price.
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JohnC2211
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My answer (done in about 5 minutes):


This problem question concerns the law surrounding agreement, namely offer and when a valid acceptance has been posted. An offer is defined in contractual law as a “willingness to contract on specified terms with the intention to be legally bound should the offer be accepted in its entirety.” The letter that Alex sends out is an advertisement which ordinarily is considered an invitation to treat (Partridge v Crittenden); being an invitation for other parties to negotiate and bargain further.
However, this is only a presumption and not a hard and fast rule. This presumption can be rebutted through the use of clear, definite language. The presumption was rebutted in Carlill v Carbolic Smoke Ball Company due to this, and the same decision should be reached in this case. Specifically, the use of the words “I will, with immediate effect,” This language is clear and unambiguous and is sufficient to rebut the presumption that this advert is an invitation to treat.

He then decides to revoke this offer on the 10th January. The general rule is that an offer may be revoked at any time prior to acceptance (Payne v Cave). It is important to establish (due to the revocation being made by post) that the postal rule (established in Adams v Lindsall) does not apply to revocation as per the decision in Byrne v Van Tienhoven. This applies to our current scenario in that his revocation does not come into force on the 10th when it is sent, but on the 15th when it is received.

Bradley posted a letter in order to communicate his acceptance. The aforementioned postal rule applies in this instance. This states that acceptance is valid when the letter is “posted” (the definition of which is given in Household Fire Insurance v Grant). Alex, when writing the offer, did not rebut the postal rule through clear language such as “notice in writing”, so the exception outlined in Holwell Securities v Hughes does not apply in this case. Since the offer was made through post, it is reasonable to expect that an acceptance would be made through the same median (Henthorn v Fraser).
Therefore, Alex would be legally obligated to provide Bradley with 35 cases of wine.

Caroline resorted to using an e-mail to communicate her acceptance. Due to e-mails being stored on servers and then sent, it is not always guaranteed that they can be “instantenous.” Thus the rule applies that the email is valid when a reasonable offeror would access the message (Brinkibon v Stahag Stahl). In this case, it would be reasonable to expect the offeror to access the email during office hours. If it was reasonable to expect Alex to be in the office during his wine trip, then it would be valid then. This would depend on whether Caroline had prior knowledge that he would not be in the office on that day, or if that day fell on a weekend.

Dominic used a fax to communicate his acceptance. This would fall under an instantaneous method of communication, and would thus be valid when brought to the offeror’s attention. A fax is very similar to a telex so one would assume the rule from the Brimnes case would apply here, being that the fax is valid when received. However, the fax machine at Alex’s office did not have any paper in. Seeing as the method of communication was in the offeror’s control (e.g. keeping a fax machine stocked up on paper), the risk would be borne by the offeror, and thus the fax would be valid on the 14th January when it was sent, and not when it was brought to Alex’s attention on the 16th.

Therefore, I conclude that Alex is certainly obliged to sell wine to Bradley and Dominic. Whether he would be legally obliged to sell any to Caroline would depend on whether her email was sent during ordinary office hours and if she had prior knowledge he would be out of the office when it was sent.
Obviously, Alex only has 35 cases of wine but is obliged to provide at least 70. Seeing as he didn’t do anything to prevent this (e.g maximum number of cases per customer) he would be sued for non-delivery by whichever party did not receive the cases.
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TheProviso
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I agree with much of the above, although I might take a different approach in some areas, but still reach the same result.

I don't quite understand your conclusion though. He said he would supply the wine at discount price to the first 35 cases he received orders for. He didn't say the first 35 orders, but specified the number of cases sold after which the offer would be revoked. So, if Bradley posted his letter of acceptance before any of the other acceptances were effective then he gets the wine and there is no obligation to sell win to anybody else?
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JohnC2211
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(Original post by TheProviso)
I agree with much of the above, although I might take a different approach in some areas, but still reach the same result.

I don't quite understand your conclusion though. He said he would supply the wine at discount price to the first 35 cases he received orders for. He didn't say the first 35 orders, but specified the number of cases sold after which the offer would be revoked. So, if Bradley posted his letter of acceptance before any of the other acceptances were effective then he gets the wine and there is no obligation to sell win to anybody else?

This is what I thought, however the problem question does not differentiate between the 3 offers in terms of timing. All the acceptances were sent on the 14th with no further specific detail.


I've also realised that this is in the wrong law forum, so I'll be pasting over to the correct one presently. Thanks for your insight anyway!
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