Question

-Business Law-

Case 1 - Offer & Acceptance

At 9 am on 20th November Mr Chan, (“Chan”) received a faxed pro forma standard form contract from HK Paper Ltd:

“Premium XX photocopy paper at HK$500 per box of 2,000 pages per box, 500 boxes available to you as our special customer, with delivery to your office on 1st day of each calendar month with payment to be paid on delivery COD.”

Within 1 hour of receiving the fax Chan signed the contract and ordered 400 boxes for delivery on 1st December.

Before faxing the form with the details of his order, Chan wrote a note at the foot of the contract “In view of the very large quantity i.e. 400 boxes that I am purchasing from you today, I expect a reduction from you of HK$50 per box from your original price of HK500 per box to HK$450 as a discount for such a large quantity.”

On 1st December no delivery of boxes arrived.

Advise Chan and HK Paper Ltd of their respective legal positions.

If Chan tells you that he phoned HK Paper Ltd on 21st November and asked if his faxed contract had been received. The person to whom he was talking told him: “Not to worry, if you read our advertising materials, you will see that we always promise to deliver on time so I can promise you that your order will be delivered to you on time.”

Does it change your legal advice to Chan and HK Paper Ltd?

Answer 1

Here in this case HK Paper Ltd made an offer to Mr.Chan to supply "Premium XX photocopy paper at HK$500 per box of 2,000 pages per box, 500 boxes available to you as our special customer, with delivery to your office on 1st day of each calendar month with payment to be paid on delivery COD.”. And Mr Chann accepted this offer with a condition that "In view of the very large quantity i.e. 400 boxes that I am purchasing from you today, I expect a reduction from you of HK$50 per box from your original price of HK500 per box to HK$450 as a discount for such a large quantity.”

As per the terms of the contract Act, conditional acceptance is not valid and an acceptance with a condition is treated as a counter offer and such counter offer should be accepted by the primary offerer (HK Paper ltd) and then only it will form a valid legally enforceable contract.

Case 1

HK Paper Ltd did not made any response to the counter offer made by Mr Chan , then it Will not form a valid contact and both parties are not legally bind in this contract.

Case 2

If HK Paper Ltd informed Mr Chan that Not to worry, if you read our advertising materials, you will see that we always promise to deliver on time so I can promise you that your order will be delivered to you on time. This means that HK Paper Ltd accepted the counter offer made by Mr Chan and non delivery of the good at aggreed time is a violation of the contract and Mr Chan can sue them.