Question

-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

(i) As it is apparent from communications between parties than Chan received offer for supply of 500 boxes but instead of accepting the order Chan made counter offer to HK paper for 400 boxes with reduced prices. Here one more thing comes up whether HK paper accepted that counter offer. So it is apparent that there is no reply from Hk paper to chan on this counter offer. It proves that there is no acceptance on part of HK papers of this offer. Secondly there is no acceptance on part of Chan also. Hence this not legally enforcable contract. Both the parties do not have any binding legal obligation. So, legally they cannot enforce contract on each other as there is no contract between them.

(ii) For second part which involves oral conversation between chan and person representing HK papers. Answer lies in the fact that contract for being enforcable, have to be in writing. So here also Chan cannot claim that it is legally binding on the HK papers. There is one another fact also present in the conversation of two parties i.e., they never talked about the price in conversation. So this also makes contract unenforcable. Answer will remain same as in 1st part i.e., contract is legally not enforcable by both parties.