The following paper under the title 'How to Create a Legal and Business Relationship' is a wonderful example of a business essay. From the conversation, there are some facts that legal contract issues raised from the conversation between Joseph and Andy, who is an employee representing Adcom Pty Ltd. For a start, it is important to establish whether both Joseph and Andy had the capacity to contract, where, from the discussion, there is evidence that both had the capacity to contract given that they fully understood what they were entering into.
In addition, both parties were in a position to contract given that they were both above the ages of 18 years, and were not mentally unsound or drunk during the phone conversation (Monahan 2001, p. 32). Most importantly, from the telephone conversation between Joseph and Andy, both parties showed an express intention to create a legal relationship. Evidence that both had an intention to create a legal relationship is the fact that there existed a business agreement between both parties; thus, a court of law would likely presume that there was an intention to create a contractual relationship.
Where there lacks an intention to create a legal relationship, it means that the agreement will not be legally binding to either party (Monahan 2001, p. 32). Another issue with the case between Joseph and Adcom relates to whether the offer from Joseph was an offer or an invitation to treat (Monahan 2001, p. 32). It is important to mention that, in the telephone conversation, Joseph gave two offers to Joseph of an offer price of $2,000 and $1,800. According to company law, an offer has to be definite and should be clearly stated, and the terms of the offer are brought to the notice of the offeree and followed exactly.
From Joseph’ s perspective, Andy’ s initial offer price of $2,000 amounted to an invitation to treat and can be used as a defense given the fact that it was the mere declaration of the willingness to enter into negotiations. In addition, there is evidence that Joseph had not accepted the terms of the initial offer price of $2,000. Another aspect that provides evidence that the initial offer price was an invitation to treat is that Andy lowered the offer price to $1,800, and it is under these terms that the other party made an acceptance.
A defense under contract law for Adcom may be that Joseph accepted the terms of the contract as the acceptance was communicated through the telephone (Monahan 2001, p. 48). This means that their offer was accepted and a legal contract was, therefore, formed. However, the terms of the offer were that Andy was supposed to send the terms of the contract through fax, and thus, acceptance was only through fax are required by the law.
This also provides evidence that the initial offers were an invitation to treat and the offer was contained in the faxed letter; thus, since acceptance was effective only when Joseph faxed back the letter means that they did not enter into a contractual agreement. For that reason, Joseph was only bound to the terms of the initial agreement and the terms sent through fax amounted to a counteroffer, thus, needed acceptance from Joseph to make it a legal contract binding him to the terms.
The written document qualifies as a counteroffer as it provides new terms, such as an advertising campaign for 8 weeks with a price of $2,200, which includes a $200 Goods and Services Tax. Another element of a valid contract is the presence of consideration, wherein this case, the consideration was $1,800 as the offer price for Joseph in exchange for 8,000 dockets in the advertising campaign. Both parties had the right to terminate the offer in the case where Joseph failed to fax the acceptance.
The grounds for termination of the offer for Adcom would be due to the lapse of time as it took long before acceptance was made. On the other hand, Joseph had the right to terminate the offer on grounds such as the offer being a rejection of a counteroffer, or failure of the offeror to adhere to the conditions prior to the formation of the contract (Poole 2012, p. 43). This is because Joseph’ s acceptance was based on the fact that the offer price was $1,800 and Adcom did not adhere to the condition.
Blum, BA 2007, Contracts: examples & explanations, Wolters Kluwer Law & Business, Austin.
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Monahan, G 2001, Essential contract law, Cavendish, Sydney, N.S.W.
Poole, J 2012, Casebook on contract law, Oxford University Press, Oxford.
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