Basic Elements of a Contract

1. Whether a contract is established between Alan and any of the parties?
2. Whether Bernard is in a valid contract with Alan?
3. Whether Charleen is in a valid contract with Alan?
4. Whether Damien is in a valid contract with Alan?
5. Concept of Alternate Dispute Resolution and its kinds

The raised issues deals with the law of contract and in order to resolve the said issues it is necessary to understand the law of contract and its application and implications.

Any contract can be formed only when a party gives an offer to the other party in order to get the promise fulfilled and when the other party agrees to fulfill the expectation of the offeror then there is an agreement between the parties. But for an agreement to become a contract it must have elements of consideration, the intention and capacity of parties. Thus, all agreements are not contracts but all contracts can be termed as agreements. (Jennifer, 2001)

An offer is an intention/wish of an offeror containing certain terms which an offeror communicates to an offeree for its acceptance (Gibson v Manchester City Council, 1978). An offer must be clear and proper and it must be communicated in order to be complete. An offer can be made to a specific person or even to the world at large.

Sometimes an invitation to treat is confused with an offer. In case of invitation, an inviter invites offers from various prospective offeror and upon receipt of offer when the inviter confirm the invitation then it results in concluding agreement amid the parties and is held in (Pharmaceutical Society v Boots Chemists , (1953)).  In (Fisher v Bell , 1961) it was held that an advertisement is an invitation and is held in (Fisher v Bell , 1961). (David & Mary, 1987)

An acceptance of an offer is said to occur when the offeree to whom the offer had been made assents the same. An acceptance is complete when it is communicated to an offeror and is held in (Felthouse v Bindley, 1862). But an acceptance must be same as an offer and an acceptance must be made before the revocation of an offer and is held in (Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd, 1988). In case of acceptance by post the acceptance is complete when the letter of acceptance is posted or put in transit.

In case an acceptance is made by molding the terms of an offer, then, the same is not termed as an acceptance, rather, it is a counter offer which in turn is a new offer and can be transformed into a contract if an offeror assents to the same. Upon making of counter offer by offeree the original offer ends and cannot be accepted by the offeree and is held in (Hyde v Wrench, 1840). (Gordon, 2016)

Apart from an offer and acceptance there must be intention of the parties to be in legal relation with each other. If the parties do not have intention to be in contract and a legal relation to bind themselves then there cannot be a contract between the parties. In social and family transaction the intention element is presumed to be absent unless the same is proved. Likewise in case of commercial transaction the intention element is presumed to be there unless disapproved and is held in (Balfour v Balfour , 1919)

Offer and Acceptance

The contracting parties must be of sound mind and must have attained the age of majority then only then can enter into contract otherwise not and is held in (Gibbons v Wright, 1954).

Consideration is the value (money or kind) that is paid in return of performance of the promise. Consideration is the motivation which is given to the performer for performance of the promise. It makes the contract enforceable (Currie v Misa, 1875)

Credit grade was give to Alan at Kaplan higher education in commercial law. He now wants to sell his textbook so he posted regarding the same on his facebook page to his friends on 1^st November 2015. He submits that if any of his friends intends to buy his notes along with his text book can get the same for $200 and pay him by 5^th November 2015.

As provided in the facts, Alan posted the advertisement on his facebook page regarding the sale of his book and note. So it is not an offer rather it is an invitation as per (Fisher v Bell , 1961). The invitation is made to the friend of Alan. So, the friends of Alan can make offer to Alan and if he accepts the same then there is an agreement amid the parties. Hence there is invitation to treat by Alan to his facebook friends only and they can make an offer to Alan.

There is a valid contract amid Damien and Alan and which is established on 4^th November when Alan took money from him. Though Demean is not eligible for the invitation but he made a new offer on 4^th November which was duly accepted by Alan by accepting the money at Kaplan. 

Alan had made an invitation to his friends on facebook who are enrolled/enrolling in Kaplan Higher Education. So there is an invitation to treat towards Bernard as he has enrolled in Kaplan Higher Education and is on the friend list of Alan.

Bernard offered to pay $ 150 on 2^nd November 2015. So, an offer is made to Alan. But, Alan rejected his offer on 3^rd November and told Bernard that he will only sell for $200 only. So the offer made by Bernard is rejected and mere quoting by Alan that he will sell the material and book for $200 is not an offer as per (Stevenson, Jaques, & Co v McLean, 1880)

As there was no offer from Alan, so by putting $200 in an envelope and posting it on 3^rd November night by Bernard will not make any contract with Alan.

Remedy -Bernard can get his money back from Alan but cannot take any legal actions as there was no contract ever between the two.

Charleen is sister of Alan. She is also enrolled in Kaplan and is also Allen’s friend on facebook. So she can make an offer to Alan against the invitation.

She on 2^nd November told Alan that she will buy his book and material for $200 but told him that will pay on 6^th November. Alan thought his sister might be mad and nodded his head as he just had woke up and was thinking of his football team performance.

Invitation to Treat

As there was an offer made by Charleen and the acceptance by nodding of head by Alan, but, the contract must have the other element, that is, intention to be in legal relation.  In the instant case the legal intention was missing as the Alan was not having intention to be in legal relation when he nodded his head as he was thinking about the match of his favorite team with no legal intention to accept the offer of Charleen.

As there was no intention to be in legal relation in mind of Alan at the time of nodding his head so Charleen cannot bind Alan.

There is no concluded contract between the parties. If Charleen leave money on Alan’s table on 6^th November, still, Charleen will have to prove the intention element in order to enforce her contract with Alan and claim damages.

Damien was in Kaplan but he is not a facebook friend of Alan so the invitation is not meant for Damien.

But he took Alan’s number from Bernard as he is Bernard’s friend. Damien messaged Alan that he is interested in buying material and book and will pay on 4^th November.

On 4^th November, Damien saw Alan at the Kaplan and he paid Alan $200 for the book. When Damien made an offer to Alan, Alan by accepting money accepted the offer of Damien. Now Alan is bound to Damien as earlier there was no contract between two but when Damien met Alan and paid him money so the contract is concluded between them.

Remedy – Damien has full right over books and material as there is a valid contract between him and Alan.

With increasing development in the society there is increasing disputes. These disputes are normally resolved through courts but the court system is very time consuming, costly, and thus there is need that arise for alternate dispute resolution mechanism. These are normally of two kinds, arbitration and mediation. (Clarb, 2014).

In Arbitration, an independent person is appointed by the parties to the dispute who resolve the dispute amid the parties and the decision is binding upon them. The facts are analyzed along with evidence before the pronouncement of decision. The main pros of arbitration are that it maintain, confidentiality, decision binding, quick decision, cost effective. But, there are few cons that are also associated with arbitration, that is, at times the process of arbitration is very lengthy as there is no set procedure for the resolution of the same, the decision is binding upon the parties and thus if the parties are aggrieved by the decision, then, still they cannot go to the court of law for the resolution of the dispute. Also, it at times becomes very expensive. The independent arbitrator decision is binding so he acts like a dictator which is not fruitful for the parties. (Michael, 2013)

Another technique for the resolution of dispute amid the parties is the process of mediation. In the leading dispute mechanism also there is one independent person who is selected by the parties for the resolution of the dispute that exist amid the parties. There are various cons that can be associated with mediation, that is, since the decision is not binding thus the parties can go o court of law if they are aggrieved by the decision. Also, the confidentially of the parties can be maintained. The process is quick and less time consuming. Also, it is very cost effective in nature.

But, there are also few disadvantages that can be associated with the process of mediation, that is, since the decision of the mediator is not binding on the parties thus they can go to court and thus the process if dispute resolution never comes to end, the confidentiality can be hampered as there is no set procedure for the dispute resolution mechanism, it is at time become very time consuming. (Michael, 2013)

Thus, arbitration and mediation are the two processes through which the dispute amid the parties can be resolved. Both the process are cost effective and quick in nature when the same are compared with the process of litigation.

Conclusion

It is thus concluded that there is no contract that is made amid Alana and Bernard or Charleen. But a valid contract is made with Damien when he offered to buy the book to Alan at Kaplan and which was duly accepted by Alan there and then. Though he was not eligible for the invitation but he made a new offer to Alan which was duly accepted by him.

Also, arbitration and mediation are the two dispute resolution techniques which can be availed by the parties in order to resolve their disputes. These two resolution technique are found to be better than litigation a they are quick and cost effective.

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Carlill v Carbolic Smoke Ball Company (1892).

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Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988).

Felthouse v Bindley (1862).

Fisher v Bell (1961).

Gibbons v Wright (1954).

Gibson v Manchester City Council (1978).

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Hyde v Wrench (1840).

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Pharmaceutical Society v Boots Chemists ((1953)).

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