Sample Answer – Case study (Contract Law)
Whether or not Mogul can refuse to take delivery depends upon whether or not there is a binding
contract between XYZ and Mogul. XYZ made the initial offer on their standard terms of business. As
Mogul’s reply in on different terms, it would seem to be in the nature of a counter-offer, rather than an
acceptance. It was held in Hyde v wrench (1840) that the effect of a counter-offer is to operate as a
rejection of the original offer. However, the counter-offer is itself an offer and may be accepted on its
own terms.
The next question is whether Mogul’s counter-offer has been accepted by XYZ. The general rule is that
acceptance must be communicated. If XYZ’s letter of confirmation was only effective when
communicated, i.e. when it arrived on May 14, there would be no contact because the counter-offer
would have been revoked by Mogul’s letter of cancellation which arrived on May 13. Revocation is
effective when communicated; Byrne Co. v Van Tienhoven Co. (1880).
However, where the post is the proper means of communication between the parties, a letter of
acceptance is effective immediately it is posted even if delayed or lost; Household Fire, Insurance Co.
Grant. If the postal rule of acceptance were to apply here, the contract would be concluded on the date
of posting which we may take to be May 1 and Mogul’s purported revocation would be ineffective.
On the facts, there is reason to question whether the postal rule of acceptance would apply. The letter
of acceptance was delayed because it was misaddressed. Therefore the postal rule of acceptance will
not apply. In this case, if the fault were traceable to mogul, the postal rule of acceptance might be held
to apply.
It would seem that Mogul’s best hope is to show that no contract was concluded. .
hand,
would
Garret
telling
hurried
been
postal
have
in
that the
operated
*already
Philip he
have
Jim
probably
was
revoked
home
sold had
*an
therefore
would
trustworthy,
the
acceptance
offer
revoked
existence
Wednesday
pub.
revoked.
the
a
his
In
Jim contract
letter
contract
depends
source,
Philip.
truthful
If a
taken capable
rule
outcome havewould
house
because
If he
moment
was
on
conclusion,
court
effective. as
on
the be
the to
athe
been
would
between
is
posted,
Wednesday
*then
According
*night.
theto
effecton
were
If, reliable
Wednesday
of
when
not
offer
Jim
came
buy
Garrett.
Philip's
the
on aposted
*unreliable
not
write
on
validly
reliable valid
not
of
itIrevocation
nighthad
this
towould
Jimbe
have
reliable,
into
consider
moment
the and
to
have
accepted.
already
Jim
problem
would and and
therefore
offer
to night.
house
find If
the
letter
otherwas
he
that of
night
then
not
the
that
is
the
https://www.scribd.com/doc/46175881/Contract-Problem-Sample-Answer-1
Whether or not Mogul can refuse to take delivery depends upon whether or not there is a binding
contract between XYZ and Mogul. XYZ made the initial offer on their standard terms of business. As
Mogul’s reply in on different terms, it would seem to be in the nature of a counter-offer, rather than an
acceptance. It was held in Hyde v wrench (1840) that the effect of a counter-offer is to operate as a
rejection of the original offer. However, the counter-offer is itself an offer and may be accepted on its
own terms.
The next question is whether Mogul’s counter-offer has been accepted by XYZ. The general rule is that
acceptance must be communicated. If XYZ’s letter of confirmation was only effective when
communicated, i.e. when it arrived on May 14, there would be no contact because the counter-offer
would have been revoked by Mogul’s letter of cancellation which arrived on May 13. Revocation is
effective when communicated; Byrne Co. v Van Tienhoven Co. (1880).
However, where the post is the proper means of communication between the parties, a letter of
acceptance is effective immediately it is posted even if delayed or lost; Household Fire, Insurance Co.
Grant. If the postal rule of acceptance were to apply here, the contract would be concluded on the date
of posting which we may take to be May 1 and Mogul’s purported revocation would be ineffective.
On the facts, there is reason to question whether the postal rule of acceptance would apply. The letter
of acceptance was delayed because it was misaddressed. Therefore the postal rule of acceptance will
not apply. In this case, if the fault were traceable to mogul, the postal rule of acceptance might be held
to apply.
It would seem that Mogul’s best hope is to show that no contract was concluded. .
hand,
would
Garret
telling
hurried
been
postal
have
in
that the
operated
*already
Philip he
have
Jim
probably
was
revoked
home
sold had
*an
therefore
would
trustworthy,
the
acceptance
offer
revoked
existence
Wednesday
pub.
revoked.
the
a
his
In
Jim contract
letter
contract
depends
source,
Philip.
truthful
If a
taken capable
rule
outcome havewould
house
because
If he
moment
was
on
conclusion,
court
effective. as
on
the be
the to
athe
been
would
between
is
posted,
Wednesday
*then
According
*night.
theto
effecton
were
If, reliable
Wednesday
of
when
not
offer
Jim
came
buy
Garrett.
Philip's
the
on aposted
*unreliable
not
write
on
validly
reliable valid
not
of
itIrevocation
nighthad
this
towould
Jimbe
have
reliable,
into
consider
moment
the and
to
have
accepted.
already
Jim
problem
would and and
therefore
offer
to night.
house
find If
the
letter
otherwas
he
that of
night
then
not
the
that
is
the
https://www.scribd.com/doc/46175881/Contract-Problem-Sample-Answer-1
