Essay: Formation of contract problem question/scenario

To establish whether Omar is indeed able to sue Emma, we must first establish whether a contract was formed. The conditions of a contract are: offer, acceptance and consideration. The first condition of a contract is an offer, which is defined as ‘a statement by one party of a willingness to enter into a contract on stated terms, provided that these terms are, in turn, accepted by the party or parties to whom the offer is addressed.’ It is necessary to consider whether there was an offer and who it was made by, and if there was, one must look at whether there was effective revocation or effective acceptance.
The first issue which needs to be decided is whether Omar’s letter was an invitation to treat (‘an expression of willingness to enter into negotiations which, it is hoped, will lead to the conclusion of a contract at a later date’ ) or an offer. Whilst Omar did state the price at which he was willing to sell the dog food, he stated that he is able to supply ‘up to 20 cases’, and therefore his letter was an invitation to treat rather than an offer, as not all the terms are stated definitively and therefore he did not show an intention to be bound, as per the case of Gibson v Manchester City Council [1979] 1 294 (WLR) , but rather it is ‘a preliminary stage in which one party [Omar] invites the other [Emma] to make an offer’ .
Omar’s letter was not an offer and thus Emma’s response is to be treated as an offer rather than an acceptance. Had Omar’s letter been an offer, Emma would have been legally bound as her response would serve as a letter of acceptance, and according to the postal rule, acceptance is complete when the letter is posted, and not when it reaches the offeror, as reinforced by the case of Household Fire Insurance v Grant [1879] 4 Ex D 216. The fact that the offer made by Emma is misaddressed and therefore Omar does not receive it means that it is not then effectively communicated, and thus is not a valid offer . Omar’s ignorance of the offer means that he is not entitled to sue, even if the performance is made. In a situation where Omar had received Emma’s offer and accepted it before Emma had revoked her offer, he would be entitled to sue as it was held in Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344 that revocation needs to arrive before the offeree has accepted the offer, which is what happened in this case. Also, in the case of Adams v Lindsell [1818] 1 B & Ald 68 , the offer was accepted, although, it was misaddressed and therefore arrived later than anticipated. The offeree accepted the offer and therefore, the moment that the letter of acceptance was posted, a contract was formed, this differs from Omar’s situation in that he did not accept the offer.
Two unilateral (‘one-sided; relating to only one of two or more persons or things’) contracts are made, of which he only receives and accepts one: Juliet’s. As a result of his acceptance, they become legally bound. There is also evidence of consideration in that the agreed upon price for the cases of ‘wet premium dog food’ is £25 per case, however, Juliet refuses to accept the delivery on Tuesday and has therefore violated the contract. Omar’s willingness to tender performance and the other party’s (Juliet’s) refusal to accept the performance means that Omar is discharged from the contract and the party who refuses to accept the performance, Juliet, becomes liable in damages for lack of acceptance, as supported by the case of Startup v Macdonald [1843] 6 Mann & G 593 .
According to Payne v Cave [1789] 3 TR 148 , revocation can take place prior to the communication of acceptance but not after, therefore it is apparent that Emma’s revocation of her offer via email is a valid one as Omar had not accepted her offer yet (because he had no knowledge of it and therefore it is possible to argue that the offer did not exist in the first place). The case of Dickinson v Dodds [1876] 2 Ch. 463 reinforces the fact that the offeror can withdraw the offer as long as acceptance has not taken place and a deposit has not been made.
Omar failed to effectively accept Emma’s contract his acceptance of her offer was not communicated and therefore no contract was made, meaning that Emma is not legally bound. This means that his attempt at delivering performance on his original invitation is void as there was no offer to begin with, as the general principle is that the offer must be effectively communicated to the offeree, which, in this case was not due to the misaddressing of the letter. Even if Omar was accepting her already revoked offer, acceptance must be communicated to the offeror for it to be effective, as per Entores v. Miles Far East Corporation [1955] 2 QB 327 , in which Lord Denning explained that if A’s offer to B is not communicated effectively (due to background noise, for example, or interference on the phone), there is no contract until A knows that B is accepting the offer.
As has been clarified, Omar’s letter was an invitation to treat and not an offer, as there was not an intention to be bound, thus making Emma’s response an offer. Due to the misaddressing of the letter, the offer is not a valid one, as it is not communicated to the offeree. Although an invalid offer does not require a revocation, assuming it is a valid offer, the revocation would also be valid as it was delivered before acceptance. The question is whether Omar has a right over Emma considering the events. Emma’s offer was invalid and she also revoked it and thus Omar should be advised that Emma is not legally bound as she does not have a contract. If she had not revoked her offer, then the offer would still be invalid as her letter was misaddressed and never reached him, and therefore he would have still been unable to accept the offer since he would have had no knowledge of it. It is worth noting, however, that Omar does have a right over Juliet as he and she were legally bound by a contract, which she breached, and is therefore entitled to damages due to her refusal to accept his performance.