Business Law
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- Date Submitted: 05/22/2013 02:20 AM
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Case Study 1
In this case study, John is not legally bonded to sell his property to both Adam and Bill. Thus, the transaction between John and Charles is valid.
Principle of Acceptance
In this case study, John offered to sell his house at $2 million dollars. Adam offers to buy the house for $1.8 million dollars and John said nothing to this transaction. According to the principles of acceptance, an acceptance must be positive and not passive. Meaning to say, the party accepting the contract must actively accept the offer. Offeror is not allowed to impose acceptance merely because the offeree does not reject the offer. In this scenario, John remained silent. In the principles of acceptance it was stated clearly that silence does not constitute acceptance. Hence, Adam wanting to take legal action against John will not be valid, as there is no form of accepted offer either by writing or orally. (Felthouse v bindley 1862)
Silence
A silent agreement is only agreeable when both parties have agreed that the offeree’s silence is to be construed as his acceptance. And for this to be effective, both parties must agree to it. In this case, John did not agree that being silent means acknowledging this contract. (Souter ocean ship building V Deutsche bank AG 1993)
Subject to Contract
In Bill’s case, Bill offer to pay $2 million dollars for the property which is the amount John has been targeting for. However, Bill mentioned that the transaction to be “subject to contract” and John agrees to it. To be subjected to a contract means that both parties is agreeable to the terms of the offer but propose that both parties negotiate a formal contract on the basis of the offer. According to the case Yap Eng Thong V Faber Union, the court found that the agreement to sell the house subjected to contract was not binding. Thus, making negotiations to “subject to contract” is a very useful tool to make...
In this case study, John is not legally bonded to sell his property to both Adam and Bill. Thus, the transaction between John and Charles is valid.
Principle of Acceptance
In this case study, John offered to sell his house at $2 million dollars. Adam offers to buy the house for $1.8 million dollars and John said nothing to this transaction. According to the principles of acceptance, an acceptance must be positive and not passive. Meaning to say, the party accepting the contract must actively accept the offer. Offeror is not allowed to impose acceptance merely because the offeree does not reject the offer. In this scenario, John remained silent. In the principles of acceptance it was stated clearly that silence does not constitute acceptance. Hence, Adam wanting to take legal action against John will not be valid, as there is no form of accepted offer either by writing or orally. (Felthouse v bindley 1862)
Silence
A silent agreement is only agreeable when both parties have agreed that the offeree’s silence is to be construed as his acceptance. And for this to be effective, both parties must agree to it. In this case, John did not agree that being silent means acknowledging this contract. (Souter ocean ship building V Deutsche bank AG 1993)
Subject to Contract
In Bill’s case, Bill offer to pay $2 million dollars for the property which is the amount John has been targeting for. However, Bill mentioned that the transaction to be “subject to contract” and John agrees to it. To be subjected to a contract means that both parties is agreeable to the terms of the offer but propose that both parties negotiate a formal contract on the basis of the offer. According to the case Yap Eng Thong V Faber Union, the court found that the agreement to sell the house subjected to contract was not binding. Thus, making negotiations to “subject to contract” is a very useful tool to make...