Offer and Acceptance

According to the case study given, Zul is the owner of a company which dealing in importing and selling high end computers. In order to boost the sales and marketing his high end computers, he has decided to use advertisement to meet this purpose.

He has puts up colourful billboards at all major shopping malls and states in the advertisements there will be a 50% discount on his A1 laptops. But in his advertisement he has omitted the words "offer only valid for first 5 customers". Now the argument is the advertisement considered as offer and the sixth customer onwards still able to purchase the laptop at 50%?

Generally advertisements are not considered as offers but as invitation to treats. An invitation to treat is not an offer. It is an invitation to negotiate or an invitation to make an offer. An offer should not be made by a person who is not fully prepared to take the legal consequences of its being accepted. In regards to the contract doctrine, an offeror must direct his or her good or service to an identifiable consumer, or offeree. A response to an invitation to treat, however, cannot result in a binding contract.

The majority of advertisements that consumers see (television commercials, radio advertisements, or internet advertisements) are not considered offers because they simply invite the consumer to consider purchasing the product or service. An example of advertisement is an offer if it specifies a specific price and place to accept the underlying offer.

Based on the all the explanation above, we have to argued that advertisement that Zul published is an invitation to treat, therefore this is not an offer. We can refer to the court case Fisher v Bell (1961) and Partridge v Crittenden (1968). His conviction was quashed as goods on display in shops are not 'offers' in the technical sense but an invitation to treat. The goods that displayed in the advertisement are representing the intention of Zul to invite consumer to treat.

But the advertisement will be considered as an offer to the first 5 customers even though the words were omitted from the advertisement. In the case study given, it shown that Zul has shown his intention to commit and has the obligation to sell all A1 Laptops at 50% of its original retail price to the first five customers.

We can refer to court case Carlill v Carbolic Smoke Balls (1893), the Court of Appeal held that Mrs Carlill was entitled to the rewards as the advert constituted an offer of unilateral contract which she had accepted by performing the condition stated in the offer. In unilateral contracts there is no requirement that the offeree communicates an intention to accept, since acceptance is through full performance. In the case of Zul, the performance refers to the first five customers make the moves to accept the offer by holding the laptop and pay with the discounted price of $2,250.

Once a valid acceptance takes place, a binding contract is formed. It is therefore important to know what constitutes a valid acceptance in order to establish if the parties are bound by agreement. There are three main rules relating to acceptance. The acceptance must be communicated to the offeree, the terms of acceptance must exactly match the terms of the offer, and the agreement must be certain.

Now let's discuss on the other parties right with the law in relation to Offer and Acceptance.

Bala is a student who sees the billboards and decided to write to Zul saying his intention to purchase the A1 laptop. He posted the latter to Zul on the 1st of January but it only reaches Zul on 8th of January.

Law in relation to Offer and Acceptance cover the postal rule where it is agreed that the parties will use the post as a means of communication the postal rules will apply. The postal rules states that where a letter is properly addressed and stamped the acceptance takes place when the letter is placed in post box. In the case study given, there are no highlights with the way of showing acceptance, so we have to assume, Zul will accept all kind of communication of acceptance. Refer to case Adams v Lindsell (1818), the court held there was a valid contract which came in to existence the moment the letter of acceptance was place in the post box. The acceptance then becomes effective when the letter is posted.

As we have mentioned above, even though the advertisement is an invitation to treat but the offer only valid for first 5 customers considered as valid offer which means Bala's acceptance to the valid offer is valid. The acceptance to the offer to the offeror is shown by the 1st of January even though the letter was received later by 8th of January. Therefore, Zul has the obligation to sell A1 laptops to Bala at the discounted price of $2,250.

Charlie, another student has contacted Zul and enquired on the price of the A1 laptop, Zul said the original retail price was $4,500. Charlie has immediately sent an email on 30th of December to Zul indicate he will buy one A1 laptop at the price of $2,250. In the text given, it didn't indicate Charlie whether he has seen the advertisement on the billboards.

It only stated that Charlie enquires the price through Zul, and Zul offer him with the price of $4,500, which it is an offer made by Zul to Charlie throughout the period when Charlie contacted Zul. But Charlie has counter offer him with the price of $2,250 by sending the email to Zul. From this case, it seems like there is 2 valid offers made to Charlie, one is through Zul's intention of selling first 5 units of laptops at the discounted price of $2,250 and another one is the offer made by Zul throughout the contacted period.

By 30th of December, Charlie has made the decision by