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Laptop World Plc Case

  • 03 Pages
  • Published On: 16-11-2023

It is the general rule that acceptance must mirror the terms of the offer made. Such acceptance must be communicated effectively to the offeror. In this case, the issue is whether Laptop World Plc has effectively communicated its acceptance.

The acceptance of an offer must be effectuated by an express declaration or by conduct. Acceptance brings the conclusion of a contract. Contract formation is of two kinds: inter presents and inter absentes. The former involves instantaneous communication where parties deal face to face. In case of the latter, acceptance becomes effective the time the communication reaches the offeror or as per the postal rule when the communication of dispatched by the offeree. The current case belongs to the latter case where the communication is made inter absentes.

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On the part of Laptop World, it could demonstrate that it made a valid acceptance. It could cite the case of Entores Ltd v Miles Far East Corporation. In the case, Lord Denning stated that the burden lies on the offeree to make sure that its communication is received. In case the telephone is dead or voicemail is faulty, there is no contract until and unless the offeree repeated its acceptance to the offeror. In the current case, Laptop World telephoned High Tech, but since High Tech office was closed then at the time of the call, Laptop World communicated its acceptance mirroring the offer through the voicemail. It could claim that it ensured the communication was received.

Lord Denning held in Entores that if the offeree has the belief that it has made the acceptance, but due to the fault of the offeree, its acceptance has not been made, there is a contract. Therefore, in such an exception, the offeror cannot claim that it did not receive the acceptance message and it will be bound by the acceptance made out by the offeree. Also, in case there is a term set by the offer or that the acceptance must be made within a time limit, the acceptance must be made within that time limit. If there is no time limit, the acceptance must be made within a reasonable time.

In this case, Laptop World may claim that it effectuated the acceptance communication, which mirrored the offer. It may claim that High Tech was at fault for overlooking its voicemail which if otherwise would led to formation of the contract. It could state that it had reasonable belief that it made the acceptance, with further supported by its email to High Tech regarding its voicemail and its acceptance. The acceptance was also made within the time limit set by High Tech. In such situation, it could claim that High Tech is therefore bound by the contract.

On the part of High tech, it can demonstrate that the acceptance was not made. Entores case held that all modes of communication are instantaneous communication and acceptance tales place once the communication is receipt. If the offer stipulates how acceptance is to be made, it must be followed. In the current case, the offer was made with the condition that the acceptance must be made through an email. However, Laptop World made the acceptance communication through a voicemail. This itself renders their acceptance invalid. Further, even considering their argument of a valid acceptance through voicemail, High Tech could demonstrate that this acceptance was not valid.

  1. Marina Hamilton, Contract Law (Pearson 2019).
  2. Ingeborg Schwenzer, Pascal Hachem and Christopher Kee, Global Sales and Contract Law (Oxford University Press 2012).
  3. Ibid
  4. Entores Ltd v Miles Far East Corporation [1955 2 QB 327].
  5. Marina Hamilton, Contract Law (Pearson 2019).
  6. Ibid.
  7. Ingeborg Schwenzer, Pascal Hachem and Christopher Kee, Global Sales and Contract Law (Oxford University Press 2012).
  8. Marina Hamilton, Contract Law (Pearson 2019).
  9. In the case of Brinkibon Ltd v Stahag Stahl GmbH, telex as a mode of communication of acceptance of the offer was received outside the working hours. The House of Lords held that acceptance is effective and a contract is formed only when once the office is reopened. Instantaneous means of communication does not always mean that content is always instantaneously communicated. Therefore, if an acceptance call goes to the voicemail of the offeror, there is no binding contract until the voicemail is heard by the offeror. In the current case, therefore, since High Tech was closed when Laptop World left the voicemail, there is no binding contract as it had not heard the voicemail. Further it could cite the case of G Percy Trentham Ltd v Archital Leafer Ltd, where it was held that irrespective of whether the offer has been matched by an acceptance, the contract can only be formed when the performance of the work in the contract begins. The fact that it has already sold the laptops to another buyer, there cannot be a further sale of the same laptops to Laptop World.

    Summing up the first part of the question, since there was no contract between the two parties, there does not arise any kind of contractual rights and obligation of the parties.

    In regard to the second part of the question, where Laptop World assumed the price was in Hong Kong dollars, whereas High Tech was quoting in U.S. dollars, the general rule applicable here is that of bilateral mistake as to the subject matter of the contract. The particular mistake in regard to the current case is that of mistake as to the price of the laptops. If there is a mutual mistake, the agreement is void. This is supported by the case of Webster v Cecil 1861 where the parties mistook the offer price regarding a plot of land. Where the intention of the offer regarding the price does not mirror in its acceptance, there is a bilateral mistake, which renders the contract void.

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  10. Brinkibon Ltd v Stahag Stahl GmbH [1983] 2 AC 34.
  11. Jacqueline Martin , Cambridge International AS and A Level Law (Hodder Education 2017).
  12. G Percy Trentham Ltd v Archital Leafer Ltd [1993] 1 Lloyd’s Rep 25.
  13. R. S. N. Pillai, Legal Aspects of Business (Mercantile Law Industrial and Company Laws) (S Chand & Company Limited).

Bibliography

Hamilton M, Contract Law (Pearson 2019).

Schwenzer I, Pascal Hachem and Christopher Kee, Global Sales and Contract Law (Oxford University Press 2012).

Martin J, Cambridge International AS and A Level Law (Hodder Education 2017).

Pillai RSN, Legal Aspects of Business (Mercantile Law Industrial and Company Laws) (S Chand & Company Limited).

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