Bob Broke Runs a Company

Question: Discuss about the Bob Broke Runs a Company. Answer: Issue The major issue in case one is to determine whether Bob and Mike enacted a valid and enforceable contract. The issue in the second case is to advice to Bob about his legal obligations and to determine whether Tom has legal right to demand the amount from Bob. In the third case, the prime issue is to determine the presence of valid consideration between Bob and Steve and to comment whether Bob is liable to issue the computer to Steve. The fourth case consider the situation when a unilateral mistake is present and to comment about the accountability of Bob towards the claim made by Mary. Law The party who extends an offer is recognized as offeror and the party who receives the extended offer is recognized as offeree. An acceptance becomes valid, when the offeree has communicated the acceptance towards the offer. Any conditional acceptance is known as counter offer and leads the cancellation of the initial offer. It means that when the offeree has directed a counter offer, then he/she is not able to make an acceptance towards the initial offer. The Hyde v Wrench (1840) 49 ER 132 case is the testimony of this scenario of contract law (CSU LAW220 Modules, 2017, Topic 5). The offeror can revoke the offer after having made it. However, it is essential that the offeree must not have accepted the offer before it gets revoked on the part of the offeror. If the offeree has accepted the offer then an enforceable contract is binding on the parties and they have to fulfill the contractual obligations. Moreover, it is pivotal to note that if the offeree uses the postal media for communicating the acceptance, then it is not necessary that the letter is received by the offeror. The time when the offeree has posted the acceptance letter, then only, the acceptance becomes valid and the parties are legally bounded into an enforceable contract. The Adams v. Lindsell (1818) 106 ER 25 case is the testimony in this regard (CSU LAW220 Modules, 2017, Topic 5). Consideration is an imperative element for enacting a legal contract between two parties. Enforceable contract cannot be enacted based on the past consideration. It means that any past work/promise cannot be used as a consideration for present promise. The Re McArdle (1951) decision provides evidence of this. Therefore, no enforceable contract is created between the parties due to past consideration (CSU LAW220 Modules, 2017, Topic 5). It is stated in the common law that even when there is no legal contract present between the two parties, then also they are bounded into the legal relation due to presence of doctrine of promissory estoppel. Hence, when the offeree has extended the particular act and the act merely relies on the act or promise then the offeree can sue the offeror for not performing the act under the relevant arguments highlighted in the Waltons Stores Ltd v Maher (1988) 164 CLR 387 case (CSU LAW220 Modules, 2017, Topic 5). Application In the case one, Mike the offeror has made an offer to Bob and it is clearly mentioned in the offer that the amount of $300 also includes the GST. Bob, the offeree has responded towards the offer by making a counter offer. As a result of this, the original offer gets terminated under the common law. This counter offer is rejected on the part of the Mike. Further, Bob has communicated the acceptance toward the initial offer. In this case, the original offer is terminated on the account of counter offer made by Bob. Hence, Mike is not liable to take the delivery or pay the amount to Bob because there is no valid acceptance on behalf of the Bob and thus, both the parties are not entered into the legal enforceable contract. The second case highlights that Bob (offeror) has made an offer which was accepted by Tom and he has posted an acceptance letter for Bob on January 12. This indicates that the offer which was directed by Bob is unconditionally accepted on behalf of Tom and same has been posted through post. Hence, the point at which Tom puts the acceptance letter into the mail box, then onwards they are entered into a legal relationship. Further, on July 14, Bob has sent a mail for cancelling the offer but it would not valid as the acceptance on the part of Tom already had been executed and thus, Bob cannot deny performing the contractual obligations. In case three, when Bob was outside on holiday, Steve had made a favor to Bob by keeping his cat on his behalf. Later on, Steve has asked for a new computer from Bob to which he agreed. However, Bob changes his mind and denies extending the computer to him. It is apparent from the relevant case law that enforceable contract cannot be made based on the past consideration and the act performed by Steve is past consideration. Therefore, Steve cannot claim for computer from Bob. In case four, Bob has been in discussions with the sales manager (Mary) regarding the purchase of a delivery van. Bob accidently signed the contract document sent by Mary in this regard and same was been communicated to Mary via Fax. However, Bob was unaware of this act.. In this case, doctrine of promissory estoppel is applied because Mary has extended the delivery and ordered another vehicle by relying on the promise made by Bob. Therefore, Bob has the legal liability to fulfill the obligations on the account of doctrine of estoppel irrespective of the fact that he does not want to get into the contract with Mary. Conclusion It can be concluded from the discussion of case one that Mike and Bob have not enacted an enforceable contract and thus, they would not be bound by contract. In case two, there is an enforceable contract in place and Tom Bob are legally bound to satisfy the consequent contractual commitments. In case three, no enforceable contract is created between the parties due to past consideration. Therefore, Steve cannot claim for the computer from Bob. In case four, Bob has the liability to take the van and has to make the payment of van to Mary. Reference CSU LAW220 Module