Law Coursework Case Study of Benitez Computers LTD

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In advising Benitez Computers LTD we must consider whether the fax they sentout to a number of their customers was an offer or and invitation to treat.

An invitation to treat is where a party such as Benitez Computer LTD arenot willing to implement the terms of their promise but merely seeking toinitiate negotiations. As in the case study of Partridge and Crittenden itwas decided that if the advertisement such as the fax sent out was aninvitation to treat and not an offer to sell then no contract would need tobe carried out. On the other hand the fax could appear to be an offer whichis the willingness to be bound by the terms of the offer should the offerbe accepted. The fax sent out could be considered a unilateral contract.

This is where a party such as Benitez Computers makes a conditional promiseand it is up to another party e.g.

Mr Torres or Mr Gerrard to choose whetherthey wish to enter into that contract as in the case of Carlill and CarbolicSmoke Ball Company. In this case, the court of appeal decided that MrsCarlill performed the condition in the offer and therefore the company wasunder obligation to pay her.

Mr Gerrard then telephoned Benitez Computers and left a voice mail messagewhere he would buy all the computers for £150 instead of the original priceof £200. If the original fax sent out by Benitez was an offer then the replyfax by Mr Gerrard is a counter offer which is where an offer has been madeand one party, in this case Mr Gerrard, is not happy with all the termssuch as the price and therefore wishes to negotiate to lower the price to£150.

However if the original fax was not an offer then Mr Gerrard was merelyasking for a supply of information which is not deemed to be legal offer asin the case study of Harvey and Facey where they were merely enquiring aboutinformation and no formal bid was made.

It appears that Mr Gerrard was interested in buying the surplus stockbecause he later sent out a letter confirming that he wished to buy up to amaximum of twenty computers. It was posted Monday but did not arrive untilWednesday. Mr Benitez replied saying that it was too late and that thecomputers had been sold. The postal rule states that acceptance by post isvalid from the time of posting as in the case of Adams and Lindsell wherethe court decided that the offer had been accepted as soon as the letter ofacceptance had been posted. All of this though is dependant on whether theoriginal fax sent out was in deed an offer and whether Mr Gerrard wasstating that he would buy twenty computers for £150 or the original statedprice of £200.

When Mr Torres left a voicemail saying that he was interested in taking £200worth of computers this was not listened to until 10am the following Mondayafter the deadline even though it had been recorded at 4pm on the deadlinedate. Believing that the original fax sent out was an offer, they have metall the terms stated. As Lord Denning stated that an offeror cannot denyreceipt of the acceptance if ‘it is his own fault that he did not get it’,for example it was Benitez Computers fault that they did not check theiranswering machine. This means that if the fax originally sent out was anoffer then Benitez would be liable to supply £200 worth of surplus stock.

In conclusion I think that in their position with Mr Gerrard they do nothave any legal obligation because if the fax was an invitation to treatthan the reply of buying the surplus stock at £150 could be rejected byBenitez Computers. If originally it was an offer sent out by BenitezComputers then the reply made by Mr Gerrard was a counter offer. A counteroffer is classed as a rejection of the original offer and the introductionof a new offer with new terms.

In the case with Mr Torres if it was a unilateral contract, all the termsand conditions were met by Mr Torres and it was the fault of BenitezComputers that they did not listen to the answering machine before hand,therefore they would be liable to supply Mr Torres. Luckily for BenitezComputers they could argue in court using the Partridge and Crittenden thatthe fax sent out was merely an invitation to treat and not an offer andtherefore they are not liable to supply neither Mr Torres nor Mr Gerrardanything.

bibliography1.Keenan. D, Riches, S. (2005). Business law, 7th Edition, Longman.

2.Offer and Acceptance. (2007, Nov 10th).

Available at: http://www.answers.com/topic/offer-and-acceptance?cat=biz-fin