The Legal Rules of Offer and Acceptance

Offer and Acceptance

1. 1. With reference to the legal rules relating to offer and acceptance of a contract, advise the club whether it can claim the joining fee from Mary, Frank and Ali.

Mary posted her application. She telephoned the club to confirm whether or not her application was accepted but was unable to get through to speak to anyone. In the meantime the committee took two months to confirm whether or not they would accept her application based on a character investigation.

In accordance with the legal stipulations of offer and acceptance Mary is under no obligation to pay her joining fee for a number of reasons. Although she returned her application form the offer of membership was not formally accepted as she failed to contact the club secretary when she was told to telephone. This meant that she wasn’t provided with an answer to the outcome of her application, the time of which was made very clear in terms of when she needed to do this by yourselves. Legally ‘an agreement is reached when an offer by one party is unequivocally accepted by the other’.^[1] Which did not occur. You do not confirm whether the club actually wrote to Mary in September when the decision was made to accept her. If this was not done and payment was merely requested on the basis that Mary Jones had been granted membership, once again she would not be liable as Australian Law dictates that a person cannot accept an offer of which he/she has no knowledge. And considering the club waited over two months to inform Mary, she had no understanding that she had ever been considered in the first place. ^[2] Additionally silence cannot be construed as acceptance. The club was not within its rights to assume that Mary would accept the offer, having failed to communicate with them by telephone and not receiving confirmation until several months after the membership cut-off date. In the English case of Felthouse and Bindley, the courts ruled against Felthouse who had considered the horse he had acquired for his own, on the basis that his Nephew had not written to confirm otherwise. He lost the case because the court confirmed there had been no acceptance of a contract.^[3]

Frank’s case is similar in that he never contacted the club secretary to confirm his membership, therefore no official acceptance was made. In addition he had stipulated in writing that his terms of agreement were related to gaining a contract of work from the club. Because this written condition was not agreed to, Frank was within his rights not to have to pay for membership. Additionally and somewhat ironically correspondence with offer, or the ‘mirror image rule’ states that if you accept an offer it must be accepted exactly as it is offered, without any modifications. This being the case Frank’s offer had already turned into a null and void counter-offer as soon as he wrote the condition of interest, on the understanding that he would receive a contract of work by way of membership.

The “mirror image rule” states that if you are to accept an offer, you must accept an offer exactly without any modifications; if you change the offer in any way, this is a counter-offer that invalidates the original agreement.^[4]

Once again no formal agreement has been instigated by Ali as he failed to contact the secretary to discuss or accept membership. He would have assumed that his membership was disregarded as it was late and he never received written confirmation.

However his assumption of failure to be invited to membership may not be enough in terms of rendering Ali not culpable. When he posted the letter he was in effect accepting the offer. Likewise although the letter of agreement never found its way to him it was physically sent by the club. Ali also followed up his request to apply for membership over the telephone, thus legitimizing his desire to join.

By law if an offer is accepted by post, the contract becomes valid at the time it was posted. As with the well documented case of Adams v Lindsell, which determined that a posted acceptance is contractually binding.^[5] But it did arrive after the stated and agreed deadline which would no doubt make him non eligible for payment of membership fees.

2. 2. Suppose that Tony is determined to take Court action and is looking for cases to support his arguments. Identify ONE case that may help support Tony’s demands that he be accepted as a member to the club and explain to him, with reasons, how a Court in your state of Australia is likely to treat this previous case. As part of your answer you should discuss what parts of the case are important and what parts are not.

With regard to your contesting the outcome of the Tennis Club to accept you as a member. Bearing in mind that you sent your letter well within the deadline date for which membership would be considered; only to be refused on the basis that your application arrived late due to a postal strike, there may be a case for us to adopt the approach of the Postal Acceptance Rule.

This is an exception in law to the principal that the offeree (In this case yourself) communicates your acceptance to the Offeror. (The Country Tennis Club). In this instance acceptance is granted when the letter stating acceptance is actually posted and

not when it is received by the offeror. The most famous case for determining this law was by way of Adams vs Lindsell in 1818. Lindsell (the defendant) wrote to Adams (the plaintiff) to make him an offer of some wool and asked for an agreement for this sale to be issued by return of post which Adams provided. However Lindsell’s original letter arrived late as he managed to address it incorrectly. Thus Linssell automatically assumed that his offer had been rejected having waited so long for a response. He consequently decided to sell the wool on to another buyer. The problem arose as this exchange took place after Adams had already replied to say that he would indeed buy the wool and he was expecting to receive it.

The court in this case ruled in favour of Adams and it was deemed that the date of agreement was made from when he posted the letter back requesting the wool and not when it arrived, which was in this case too late.^[6]

This has a striking resemblance to your own situation. The court imagined that this would elevate the issues concerned when each individual is waiting for a receipt of confirmation, which can hinder business. The law has been criticized for having ulterior motives that were connected with publicizing the post office in the nineteenth century, although it does seem feasible that it was a law passed to aid the practicalities of business efficiency. But it does place the offeror in a vulnerable situation as they are often bound by contract without even being aware of it.

This is not a completely straightforward law as it does only apply to acceptances and no other type of communication and only where it is reasonable that this acceptance needs to be made by post. This makes a good case for you against the club as you were responding to their requests. Saying that this particular rule can always be displaced by the offeror if they request that the offer takes a specific form, for example a speedy reply or a deadline, which means it cannot take effect on arrival as the deadline has passed. Which makes your case unfounded. However what is stipulated in this law as reiterated in the case of Henthorn v Fraser

‘Where the circumstances are such that it must have been within the contemplation of the parties that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of an offer, the acceptance is complete as soon as it is posted’

is the need for the offeror to consider what is reasonable to expect in the case of making an offer available. In other words it is very conceivable that the Tennis club will be liable by way of neglecting to take into consideration the potential disruption or inevitable delays that might arise through the postal system or any extenuating circumstances whereby the application might be received slightly later than anticipated.^[7] Because the Tennis Club failed to put in place these obvious influencing factors they should by law be obliged to provide you with the membership that you applied for within the designated time given.

3). Suppose that the Club’s constitution provides that “any member who fails to pay any money owed to the club promptly and in full will be subject to imprisonment on the premises for six days for each offence and during this time must scrub the kitchen with a toothbrush”. Assuming Mary refuses to pay, can the club enforce this provision of its constitution against her? Why or why not? (30 marks)

No Mary would not be subjected to this type of punishment as she is not officially a member of the club and the constitution clearly states ‘any member’. She has not officially accepted membership therefore she is not liable to carry out the actions requested.

A constitution in this sense establishes the laws and principles of the club itself which do not infringe on the external it reflects a temporary law or measure which has little power in the external world around its governing area. In this case the club constitution is limited to the confines and members of its club.

A constitution is defined as ‘a set of rules which governs an organsation. Every organization, whether social club, Trade Union or nation state, which has defined objectives and Departments or offices established to accomplish those objectives, needs a constitution to define the powers, rights and duties of the organizations members’^[8]

In a club, such as the Country tennis Club members have to obey the laws and house rules as laid down in the constitution. But only as members of the club. The extent by which the members are controlled is dependent on the constitution. What it does not have is the power to force its members to carry out things against their will.^[9]

As with any constitution, it can discriminate and create its own internal laws which might have an affect on those trying to seek membership. It represents an internal oligarchy that control their own small governing group which has no legal standing in terms of enforcing its own rules directly onto external individuals, although this may be indirect as mentioned before in terms of prejudice or discrimination against those people it wants as its members and those it chooses not to accept.

In addition the nature of this constitution, regardless of its company policies and rules it is infringing on civil and human rights issues. The fact that the Tennis Country Club constitution expects degrading and humiliating activities to be performed by its members is both unacceptable and contravenes a number of laws. Examples of some of these laws in Australia include those thought to encourage Societal Abuses and Discrimination, The Right of Association. The law also provides all workers and public servants with the right of association domestically and internationally and protection ‘against antiunion discrimination, and workers exercised these rights in practice’ One point to note is that Australia has no Federal Bill of Rights. However it does have one of the best human rights records in the world. ^[10]

So even if Mary was for some reason expected to make payment for her club membership and then refused, even if membership had been granted, yet not accepted. Under any of these extenuating circumstances she would be well within her rights to report the club for at the least anti-social behavior, at worst for crimes against human and civil rights.

Bibliography

Tillotson, J.Contract Law in Perspective: Routledge; 1995

Suff, M. Essential Contract Law: Cavendish Publishing; 1997

Nixon, A, Wolstenholme Holland, R.Commercial Law: Longmans, Green and Co; 1907

Frey, M.A, Hurley Frey, P. Essentials of Contract Law: Thomson Delmar Learning; 2000

Stone, R. The Modern Law of Contract: Routledge Cavendish; 2005

Stone, R. The Modern Law of Contract: Routledge Cavendish; 2005

Stone, R.The Modern Law of Contract: Routledge Cavendish; 2005

Barnett, H.Constitutional & Administrative Law: Rutledge Cavendish; 2004

Harriman, E.A.The Constitution at the Cross Roads: A Study of the Legal Aspects of the League of Nations, the Permanent Organization of Labor and the Permanent Court of International Justice: The Lawbook Exchange, Ltd; 2003

Australian Human and Civil Rights. Available at: http://home.vicnet.net.au/~victorp/vphuman.htm Accessed August 26, 2008

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^[1] Tillotson,J.Contract Law in Perspective: Routledge; 1995

^[2] Suff, M. Essential Contract Law: Cavendish Publishing;1997

^[3] Nixon, A, Wolstenholme Holland,R.Commercial Law: Longmans, Green and Co; 1907

^[4]Frey, M.A, Hurley Frey, P. Essentials of Contract Law: Thomson Delmar Learning;2000

^[5] Stone, R. The Modern Law of Contract: Routledge Cavendish; 2005

^[6] Monahan,G. Australian Essential Contract Law: Routledge Cavendish;2001

^[7] Stone,R.The Modern Law of Contract: Routledge Cavendish; 2005

^[8] Barnett,H.Constitutional & Administrative Law: Routledge Cavendish;2004

^[9] Harriman,E.A.The Constitution at the Cross Roads: A Study of the Legal Aspects of the League of Nations, the Permanent Organization of Labor and the Permanent Court of International Justice: The Lawbook Exchange, Ltd;2003

^[10] Australian Human and Civil Rights. Available at: http://home.vicnet.net.au/~victorp/vphuman.htm Accessed August 26, 2008