The Bicheno and Launceston Companies’ Contract Analysis
Introduction
A legally enforceable agreement between two or more parties is what constitutes a contract. In other words, it is a promise or collection of promises for which the law establishes a remedy and which the law acknowledges as requiring fulfillment. It is established when both parties have the necessary capacity and an offer is unambiguously accepted by the other side. The exchange of value and the parties’ intention to create a legally enforceable agreement must both have occurred. Any required formalities must have been followed, and the agreement’s goal must be legitimate. This paper seeks to discuss the contractual issues between Bicheno and Launceston Companies.
Issues with Contract for the Outdoor Sign: Counter Offer and Non-acceptance
A valid contract satisfies all of the law’s requirements. According to Beatty et al. (2021), it must fulfil the broad description of the contract covering all the seven key areas. Therefore, giving reference to this insight, the contract between Bicheno v Launceston Company, for the outdoor sign is invalid. In this case, Jemma writes an invitation to treat to Launceston Company concerning the installation of the outdoor sign. Launceston in response, pledges their offer to Bicheno, quoting their prices and charges as $7000 exclusive of GST and delivery, and the activity is to commence a week after the invitation (Personal information, 2022). However, Jemma is not complacent with the offer and writes to Launceston accepting to pay $6250 exclusive of other charges.
This denotes a counter offer, which is a modification of the offer’s conditions by the offeree, as this case study illustrates. The counter offer has the legal effect of rescinding the initial offer (Hill et al., 2022). For instance, in Hyde v. Wrench, the defendant made an offer to the plaintiff on June 6th to sell a farm for ÂŁ1,000. The plaintiff wrote to the defendant on June 8th, accepting payment of ÂŁ950 for the farm. The defendant wrote on June 27th, rejecting the ÂŁ950. Thereafter, the plaintiff wrote to the defendant on June 29th, accepting payment of ÂŁ1,000 for the farm. De Silva (2020) narrates that it was decided that the defendant was not responsible. The plaintiff’s counter offer of ÂŁ950 nullified the initial offer, which was not open for acceptance by the plaintiff on June 29th because the defendant had not invigorated it.
Consequently, another legal issue that challenges the validity of this contract, is the breach of the rules of acceptance. Rule three, for instance, mandates that acceptance must be unrestricted and unconditional (Hill et al., 2022). Any alteration or modification of the offer amounts to a conditional acceptance, which is not an acceptance, as in this instance where Jemma reduced Launceston’s offer of $7,000 to $6250 (Personal information, 2022). The offeree must accept the offer in its whole. Additionally, rule number five stipulates that approval must be conveyed to the offeror via the approved channel; however, in this instance, acceptance was not conveyed and Jemma instead offered the Launceston Company a proposal (Hill et al., 2022). Lastly, in accordance with Rule 4 which states that an offer must be accepted or rejected within the time period specified, if any, or within a reasonable period of time failing which it lapses. Jemma had the right to terminate the contract by giving Jeremy instructions to contact Hugh by phone and in writing to do so before the end of the week. As a result, Bicheno is not liable for any damage related to this contract.
Issues with the Materials: Illegality
In this case, there is a legal issue arising from the materials of the contract. For instance, the dimensions for the outdoor sign violate the council’s planning scheme. Which states that a sign of nature of the outdoor sign erected by Bicheno is not permitted to exceed 2 meters in height or exceed 4.5 meters in length (Personal information, 2022). Consequently, Bicheno did not seek a permit to erect this kind of outdoor sign, thereby rendering the materials and the contract illegal, thus invalidating the contract from the beginning. As a result, Bicheno can be sued for the breach of law.
Issues with Contract for Marketing Banners: Rejection and Non-acceptance
On the other hand, in the case of the banners, the contract is considered invalid, since it does not meet all the requirements of a contract. In this case, Jemma’s reaction to the offer given by Launceston for the banners indicates a rejection. According to Hill et al. (2022) an offer terminates if the offeree refuses to accept the same, the refusal may be express or implied from the conduct of the offeree. For instance, silence by the offeree amounts to rejection, as in this case, Jemma decides to keep silent after Launceston offered her two options for the banners. This argument is supported by the sixth rule of acceptance which states that silence by the offered does not amount to acceptance. Launceston’s action to proceed with the contract is unlawful and does not bind Jemma in any way. Therefore, Jemma cannot be sued for any damages caused by this and is not entitled to any liability.
Issues with Terms and Conditions: Non-binding
In the case of terms and conditions, Jemma is only bound to abide by them if Bicheno is in contract with Launceston Signs and Designs Company. However, in this case all the two contracts are invalid, indicating that there is no contractual relationship between the two parties. And so, Jemma is not bound by the terms and conditions of Launceston Company until they engage in a valid contract.
Issues Arising From the Removal of the Outdoor Sign: Tort of Negligence
In the case of damages caused by the two employees to whom Launceston Signs and Designs, sent to remove the outdoor sign, Bicheno can initiate a legal suit for damages. First, they can be sued for negligence under tort. A common law action for damages or other remedies may be brought in response to a tort, which is a civil wrong other than contract breach. On the other hand, negligence refers to a duty breach brought on by failing to take a course of action that a wise or reasonable person would take or by acting in a way that they would not. For instance, the acts of the two employees walking away without informing Jemma of the two holes they left on the rooftop show an epitome of negligence.
However, to maintain an action for negligence, Jemma and Michelle must prove three key things. First, there must be a legal duty of care owed by one party to another. Second, they must show evidence that there was a breach of duty of care. Lastly, such a breach must result in legal injury to them. In this regard, Bicheno has all proof of negligence to sue the company. As the two employees owed Bicheno a duty of care when removing the sign. Moreover, the two employees breached the duty of care by damaging the rooftop, creating two big holes that resulted in damage to the offices after the heavy rains.
Pursuant to the law of tort, Bicheno has a right to sue the company for the wrongs committed by the employees, under vicarious liability. In this condition, one is liable for the wrongs committed by another. It arises under several kinds of relationships such as servant/ master, principal/agent, among others (Lewis, 2019). The justification of vicarious liability is that the master benefits from the work of his servants and thus it is only fair that he stands by his servants whenever such servants have committed a wrong. Further, the master on many occasions may be in a better position financially than his servant and can easily compensate an injured 3rd party and then get back to the servant for indemnity.
However, for Bicheno to enforce their claim based on this condition, they must prove that there was a relationship between master and servant at the time the offense was committed. It must have been the employee who committed the tort, and the wrong must have been committed in the course and within the scope of the employee’s duty to the employer (Lewis, 2019). Therefore considering all this evidence, Bicheno is bound to proceed with a lawsuit against Launceston Company, as it in legal terms is considered a person.
Conclusion
In conclusion, it is clear that a contract must contain all seven requirements for validity: an offer, acceptance, capacity, intention, consideration, legality, and formalities. Failure to which the contract is void and no claim can be pursued. Similarly, the terms and conditions of the offeror will only bind the offeree when they are in a valid contract. Moreover, the discussion indicates that the master can be sued for the wrongs committed by his servant. Therefore, to ensure peaceful coexistence and harmonious relationship between parties involved in an agreement or contract, the rule of law should be upheld with due care and dignity. To foster economic, social, and political development in any state.
References
Beatty, J. F., Samuelson, S. S., & Abril, P. (2021). Business law and the legal environment. Cengage Learning
De Silva, C. (2020). The law of contract. In Galbraith’s Construction and Land Management Law for Students (pp. 77-119). Routledge.
Hill, R. W., Williston, S., & Currier, R. D. (2022). Commercial Law. DigiCat.
Lewis, K. (2019). Vicarious liability. BDJ in Practice, 32(4), 16-17.
Personal information. (2022). Assessment Brief Assessment 2: Problem Solving Task. Canvas@RMIT University.