Framonline Pty Ltd and Local Livestock Seller

Issue

Was there a binding contract between FramOnline Pty Ltd and Local Livestock Seller who intended to on-sell the cattle between the two parties with the presence of the element offer and consideration.

Rule

Being the offeror Framonline Pty Ltd the offer even 14th October was the due date to accept the offer provided that the offer was not given under seal or supported by consideration.

Application

In this given problem, it is stated how FramOnline Pty Ltd was negotiating the sale of Beef cattle to a firm called Local Livestock Seller who intended to on-sell the cattle. This letter was an offer by one party to whom the offer is made was bound on certain term. An agreement of the contract where there are 3 major elements that need to be addressed: Offer, Acceptance and Consideration.

An offer is made when one party the offeror gives another party the offeree a clear indication they are willing to be bound to a contract on specific terms. FramOnline Pty Ltd has been negotiating the sale of a beef cattle to a firm called Local Livestock Seller. FramOnline Pty Ltd sent a letter advertising the prices of the cattle. A deadline was given to the 14th October. Local Livestock seller made a counter offer of the terms stated by FramOnline making it cheaper.

The rule of offer was established in the case of the Carbolic Smoke Ball case [1893]. An offer is not valid unless it satisfies the following 6 rules: The offer must be communicated to the offeree, Offer may be made to an individual, a group or the world. An offer must be distinguished from an invitation to treat. An invitation to treat occurs when parties express interest to conduct a business without intending to be legally binding. A party requesting to provide more information is not an offer. All terms governing an offer must be accepted failing it will be unfaithfully apparent to the eyes of law. An offer lapses if it is turned down by the other party where a counter offer was met, Hyde and Wrench [1840].  Local Livestock Seller requested to FramOnline to drop the price per head for each cattle. It was rejected by FramOnline on the spot however Local Livestock did not reply its duties to respond. This has no doubt proven ground to FramOnline to find an alternative supplier.

 Local Livestock failed to respect the Postal rule that clearly states an acceptance by the letter is valid from the time it is posted, even if the letter is delayed or lost, Adam and Lindsell 1818.

Acceptance is a statement whether spoken or written or conduct that conducts that indication with a specific order. Acceptance must be complete and unconditional. A counter- offer or rejection of the offer. It has to be communicated to the offeror except in the case of a unilateral contract. However, the existence acceptance is not valid unless it complies with the following rule: After receiving the letter from Local Livestock Seller, FramOnline being the offeror replied. An acceptance takes place when a properly stamped and addressed letter of acceptance is posted and not when it is received by Local Livestock seller where it failed its duty to reply.