Business/commercial law essay question and answer

Arnold wrote to Ben offering to sell him a consignment of goods. In the letter he advised Ben to telephone his decision to Cecilia, Arnold’s wife. Explain whether there is a valid contract between Arnold and Ben in the following situations:

i) Ben does not telephone Cecilia but writes to Arnold accepting his offer. (4 marks)

ii) Ben sends a telex to Arnold accepting the offer. (4 marks)

(i) This problem is based on communication of acceptance.

• As a general rule, the mode of effecting acceptance is immaterial so long as the offeror receives the same.
• In this case it appears that there is a contract between Arnold and Ben as Ben writes to Anold accepting the offer, provided the letter was actually received Arnold.

(ii) In the second instance, there is a contract between Ben and Arnold as Ben communicated acceptance telex and to the extent that Arnold received the same, there is a valid contract between the two.

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