Question

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

advice to Chan-

Chan made an offer to HK paper of purchase of 400 boxes at $450 per box by writing on the original contract for $500 per box. Here by making a new offer he has rejected the original terms of $500 price per box, hence HK paper is within it's rights to reject the offer and Chan has no legal recourse against them.

advice to HK paper-

HK paper had sent Chan it's offer for supply of 500 boxes at $500 a piece, which has rejected by Chan who insisted on puchasing 400 boxes at $450 per box. Hence due to the rejection of the original offer, HK paper can legally cancel the contract and refuse to deliver the goods without any fear of legal action by Chan.

The above telephonic conversation does not change my advice to both parties as the conversation does not contain an outright acceptance of Chan's revised terms by HK paper, the conversation on delivery of the order relates to the original contract drafted by HK which was rejected by chan when he drafted a new offer on the contract, hence this call does not change my advice to both parties.