Question

Question 1

Alia writes to Bob asking him to renovate her office on 1^st June.

Her letter states that Bob should accept or reject the offer by letter also. However, Alia made a mistake in the address, resulting a delay and the letter only reaches Bob by 6^th June.

On 4^th June, Chong hears about Alia’s offer and decides to negotiate with her. After telephone negotiations, Alia offers Chong the contract to renovate her office and Chong accepts.

On 6^th June, Alia sends a fax to Bob to inform him that the offer she made to him on 1^st June has been withdrawn. The fax is received at Bob’s office at 9.30am but is only noticed by Bob’s personal assistant at 4.30pm in the evening. On the morning of 6^th June, Bob receives the original letter of 1^st June and immediately posts out his letter of acceptance at 10.00am to Alia.

Based on the law of contract, consider whether Alia has made a contract and with whom.

Answer 1

Answer: Alia has made a contract with Chong verbally or officially depending on the nature of the confirmations by either party.

Reasoning:

The Law of Contract requires the following for the existence of a contract:

1. Intention
2. Consideration
3. Confirmation

While Bob's communication with her showed consideration, there is no record of consideration nor confirmation or acceptance before the formation of the contract with Chong.

In Chong's case, all 3 aspects of contractual proceeedings are met. The nature of the aspects determines the type of contract. The existence of the contract is undeniable.