Introduction

The rules of offer and acceptance, and in particular the postal rule, are products of the 19th century. They have little relevance to the modern commercial world, and are in need of reform. Discuss

The rules of offer and acceptance and in particular the postal rule are old because they are products of the 19th century. Despite that fact, most of the rules are still relevant to the modern commercial world, and perhaps the only rule that needs reform is the Postal rule. There are many rulesof offer and acceptance, but this essay will only focus on two rules of offer and acceptance respectively.

Under the first rule of an offer, itis stated that only an offer can be accepted and must not be an invitation to treat. Invitation to treat is a statement that is, “at most, inviting people to come forward and make an offer” (Duxbury, 2008:12). One case to illustrate this isFisher v Bell where the ‘offer’ for selling the knife is considered as an invitation to treat. It is good for businesses because they can reject the customers’ offers and can control their stock. On the other hand, it can cause misleading advertising and misleading people. However, it is the person at the point of sale that could decide to accept or reject customers’ offers, therefore this rule is good for businesses to be flexible in dealing with different customers. This rule is relevant to the modern world because it allows businesses to be in a better position to advertise their products but at the same time not be commit to their adverts and can amend them to suit changes such as customers’ behaviour or any VAT rate.

The second rule of an offer states that it must be communicated to the offeree in order for it to be considered as an offer.One case to demonstrate this isPowell v Lee when it was held that there was no contract between Powell and the school since there was no authorised communication. This rule is a positive one because it helps the offeror and offeree to be clearon what is being the offered. On the downside, one might end up doing the conduct of acceptance whilst being unaware of the offer and this could lead to unfairness because the benefit of the agreement will not go to the offeree. In general, this is just a common sense rule put into legal form; it helps to prevent victims from being bullied into accepting the offer without knowing it. It is still relevant to the modern world since very often victims are tricked into accepting the offer without knowing about the terms of the offer and so they need the law to protect them.

For an acceptance to be made it must be unconditional, as any change in terms of the offer will kill off the original offer and therefore it becomes a counter offer. One case to illustrate this rule is Hyde v Wrenchwhen the counter offer of £950 has kills off the original offer of £1000.This rule favours the business as it protects the businesses’ interest when making the offer and it allows the business to be in control of the price of goods on offer. On the otherhand, it appears to have a negative impacton customers because they are not aware of the complexity of the law regarding offer and acceptance, but just assume they are negotiating and unaware they are destroying the original offer price. However, this rule makes the clear separation between different offers and aids the business in making sales at the intended price.It is still relevant to the modern business world despite the fact that it was created in the 19th century.