Introduction to busniess law

First Recruit Bradford (FR ) and Deluxe Office Design (DOD . An Example of Offer and Acceptance Analysis in Contract Law

This case involves an interruption in a contract negotiation due to a communications delay . The communications delay was due to equipment failure at DOD and a problem with a third party (the postal service During this communications delay , FR made the incorrect assumption that DOD had been slow in continuing negotiations and made the contract with another supplier who had made a lower bid than DOD . This new contract excluding DOD was formed

while DOD assumed the negotiations were essentially over between DOD and FR and that the terms of the contract had been set and agreed upon . What is the legal position FR holds with regard to DOD ? An important issue may be that DOD requested that FR confirm the final agreement by post . However , FR had requested that the payment to DOD be made in stages rather than a lump sum . Although FR was unaware of what the response of DOD would be to this request , DOD had in fact agreed to this `consideration . Because of the delay in the post from DOD , the negotiations were broken off (by FR ) before FR received confirmation that the requested `consideration ' would be met . Thus there was never a post from FR to DOD confirming to DOD that all conditions of the contract were met . This seems to be a condition , set by DOD , that would signal that all parties to the contract were of the same mind

The aspect of contract law which appears to apply in the instance described above is `Offer and Acceptance . The offer is considered to be the indication by one party to the other party of their acceptance of terms without the need for further negotiations . According to this principle , the contract only becomes binding when the offerer of the contract has communicated that the terms of the contract are accepted That is , the offer and acceptance principle says that the contract becomes binding when the two parties are of the same mind . According to Acme Grain v . Wenaus . to constitute a contract , there must be an offer by one person to another and an acceptance of that offer by the person to whom it is made . A mere statement of a person 's intention , or a declaration of his willingness to enter into negotiations is not an offer and cannot be accepted so as to form a valid contract (Acme Grain Co . v . Wenaus , 1917

So how does the offer and acceptance principle apply in the instance of interaction between FR and DOD ? It appears that DOD made an offer to accept the terms set forth by FR of a staged payment and was then waiting for the confirmation by post from FR . From the point of view of DOD , the negotiations were finished and the agreement to the contract was implied by the previous communication with FR . From the point of view of FR...