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Contract II : Acceptances
Transcript of Contract II : Acceptances
Proof of an offer to enter into a legal arrangement relies upon definite terms of such an offer.
Acceptance to such terms may be as simple as the statement "I accept," or;
Can also be inferred from the conduct of the offeree (E.g. an exchange of documents,
Inferring assent may be difficult particularly when negotiations have covered a long period of time.
Conditional acceptances may be deemed to be counter offers
An acceptance is a voluntary act of the offeree whereby he exercises the power conferred upon him by the offeror, which creates reciprocal obligations between the parties.
The result is the parties are no longer at liberty to change their minds, and are legally bound to continue with the terms bargained for (subject to certain exceptions).
Arnold Palmer Golf Co. v. Fuqua Industries, Inc.
Plaintiff golf company filed a breach of contract action against defendant golf equipment manufacturer after defendant informed plaintiff that it did not intend to go through with a deal between the parties, which was culminated in a document denominated as a memorandum of intent. The district court granted summary judgment in defendant's favor, finding that the document was not a contract and that the parties were not bound until a definitive agreement satisfactory to both parties had been prepared, and plaintiff appealed.
The court held that whether the document signed by the parties was intended as a contract was a question of fact, which should not have been decided by the trial judge on a motion for summary judgment.
Lahore Development Authority v. Muhammad Qasim Khan
Auction of plot by the LDA. Respondant's bid was the highest
Respondants signed a condition, that the deal was subject to the acceptance of D.G. LDA.
Respondants asked to return the deposit, after the D.G. did not get approval.
Court's findings at Page 39.
Karachi Gas Co. Ltd. v. Dawood Cotton Mills Ltd.
Restitutionary suit for overpayment. Respondant's claimed that they had been overcharged.
19-8-54 : Ltr confirming gas supply for a period of 4 years...
Signed and retuned by the Respondants with a reservation... Page 41.
Acknolegded by Sui Gas on September 11, 1954.
On 12-9-1955 - Gas Co says that the price is subject to upward revison.
No immediate protest against the increase the the price.
Similar determinative or relevant facts yeild similar results
In a situation where this is not true, the doctrine must be judged for coherence with other case law
A contract is
set of promises
for the breach of which the
law provides a remedy
, or the performance of which the
recognizes as a duty
Offers, promises, and proposals
Introdution to contract remedies
You get what is promised
Reliance and restitution interests
You get what you had lost
Availbale in situations where money damages are inadequate
The Objective Theory of Contracts
Neither the Courts, nor the parties, are mind readers, and cannot rely upon the subjective intent of the parties
The existence of terms of an agreement rely upon the
made by the resepective parties.
This is what a
reasonable third party
, standing in the shoes of the
(to whom the offer is made) would understand what the terms were.
Promises/Offers differntiated from other statements
An offer is
a communication by the offeror
creating a reasonable expectation in theofferee
that the offeror is willing to contract
on specified terms
such that the offeree only need accept in order to be bound by the contract
Such statements are differentiated from other statements of mere intent or invitations for contacting.
Contract Act of 1872
The general law of contract in Pakistan is contained in the Contract Act 1872.
Other common law decisions (where relevant) are also cited in the courts. The Act defines “contract” as an agreement enforceable by law.
An offer (or a “proposal”)
is not defined by statute
. It is generally understood as denoting the expression, by words or conduct, of a willingness to enter into a legally binding contract as soon as it has been accepted, usually, by a return promise or an act on the part of the person (the offeree), to whom it is so addressed.
Ch. Muhammad Younis v. The Islamic Republic of Pakistan
Oriental Insurance Building was designated as Enemy Property under the relevant law, and tenders were invited from the public.
(P) offered 15 Lac PKR. Respondant No. 4 (National and Grindlays Bank) offered 17 Lac PKR and were conveyed the land.
Case brought before the High Court of Lahore as a "writ petition".
Generally, the High Court's of Pakistan have the power to stop illegal moves made by the government... which was alleged here. (Current Pak. Const. Art. 199). Here, Art. 98 of the 1962 Constitution was used.
the conveyance to Respondant 4 was illegal, without lawful authority and has no legal impact.
Ch. Muhammad Younis (Cont.)
A tender, only when accepted, constitutes a binding contract.
Unless a contract comes into being, no mutual rights and obligations exist between the parties
The terms of the tender (as defined by law) reserved the rights to the custodian to refuse and offer made.
A promise/proposal is a statement of future intent which a reasonable third party would consider to be binding
Promises are differentiated from words of intent, invitations to treat, tenders and other statements.
An offer, is definite as to its terms such that simple acceptance creates a contract.
Generally, a court will look at the objective intent of the parties to garner whether or not an offer/promise was made.
Offeree and the power of acceptance
An offeree, when faced with an offer can
Produce a counter offer
A counter offer will kill the initial offer. In such a situation, the Offeree now becomes the offeror, offering terms based on the produced counter offer.
Court holds that the protest, was too late and could not be enforced.
Monthly payments had commenced and had been accepted by the Respondant.
Section 63 of the Contract Act at Pg 48