The Law Of Contract Case Study

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The Law of Contract has traditionally been established according to offer and acceptance with the assumption that this facilitates party intentions and is legally binding. On assessment, contracts provide that occasionally the process driven nature of contractual agreements can have the tendency to overshadow party intentions. Despite this, the purpose of contract, in our view, is to create certainty which to some degree is dependent on the formalities required to legally acknowledge a contract. On consideration, the over reliance on offer and acceptance has created an environment where party intentions are overshadowed by the formality of a process driven mechanism. Consequently, this imposes requirements which do not apply to all circumstances. …show more content…

An example of this is the case of Byrne & Co. v Leon Van Tienhoven & Co. from 1880. The defendant sent the claimant an offer in the form of a written letter on the 1st of October, then subsequently sent a revocation of that offer on the 8th also through the post. The offer letter arrived on the 11th and was promptly accepted by telegram on the same day, then was again accepted by post on the 15th. It was not until the 20th that the revocation letter reached the claimant. The facts of the case show that at no point in the process did the parties agree on the terms of the contract, yet the court held that a contract had been formed. The reasoning behind this was a rule of contract that still exists today known as the postal acceptance rule, which states that when dealing with postal communications the contract is concluded as soon as the acceptance of the offer is posted. The postal acceptance rule, in addition to the fact that “an uncommunicated revocation is for all practical purposes and in point of law no revocation at all” (Lindley, J.) meant that from a legal perspective a contract had been formed. This is a clear example of contract law’s tendency to be process driven and illogical, as Van Tienhoven was bound to perform on an offer that he had, as far as he was aware, revoked before having even communicating the offer in the first

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