An intention to create legal relation is an essential in Tanzania
1. Discuss the ways on how an offer can be terminated?
An offer is an indication from one person to another that he is willing to do or refrain from doing a specified act. An offer is the first step in the formation of a contact.
The offer is a statement of intent of by the offer or to be legally bound by the terms of the offer if it is accepted, and the contract exists once acceptance has taken place. If the offer is plainly stated e.g. would you like to buy my car for $8,000? There is no problem.
The question is easily identified as an offer, and you only have to say yes I will buy your car for $8,000 for there to be an easily identified accepted too.
Once we know whether a party is making an offer, and in then intending to contract, we must be satisfied that the offer conforms to the rules to show whether it is valid offer or not.
The offer must be communicated to the Offeree.It is impossible to accept something of which you have no knowledge. Example
Taylor V Laird (1856)
Taylor give up the captaincy of a ship and then worked his passage back to Britain as an ordinary crew members .His claim for wages failed .The ship owner had received no communication of Taylor’s offer to work in that capacity.
An offer can be made to one person but it can also be made to the whole world, any one
Can then accept the offer who has had notice of it.
Carl ill V the carbolic smoke Ball Co (1893)
The company’s claim that it had no contract with Mrs Carl ill failed it had made its offer generally and she had accepted by buying the smoke ball using it and still getting Flu.
So the Offeree must have knowledge of the offer in order for it to be valid and enforceable.
Inland Revenue Commission V Fry (2001)
The IRC claimed that Fry owed it $113,000 to the IRC with the letter starting that the cheque that was in full settlement and that if presented for payment this would be acceptance of her offer.
The terms of the offer must be certain if the worlds of the offer are too vague then the parties might not really know what they are contracting for and should not then be bound.
Guthing V Lynn (1831)
When a horse was purchased a promise to pay $5 more if the horse is lucky could not be an offer .It was too vague.
An offer can be express or implied , specific or general .There can also standing offers.
( i ). An offer is said to be an express offer when it is made by worlds clearly spoken or written .For example when X tell Y –will you buy may 1996 . Hero Honda Motorcycle for Rs 18,000/=?
(ii). An implied offer is when the offer can be understood from the conduct of the parties or the circumstance of the institution. For example –when a train is being run on a particular rout the implication is that the train will carry the passengers at the rate fixed.
(iii). A specific offer is when an offer is made to a Particular person and only that person can accept the offer or reject it.
(iv). A general offer is an offer is made to the public at large and can be accepted by any person.
(v). Standing offers: When an offer is open for acceptance for a long stretch of time it is called a standing offer. A long stretch of time depends on the circumstance of the case: such an offer may be accepted by offeree until it withdrawn by Offerer.
An offer can be terminated either by rejection, death, or lapse of time, counter offer and Revocation.
Rejection- If the offeree rejects an offer either out right or by including a counter offer the original offer is cancelled .Like the offer and the revocation takes effects only when it has been communicated .Thus if the offeree reject the offer but later changes his mind ,provided that he communicates his acceptance there fore before the rejection is received by the offer or , there will be a contract.
Revocation- An offer may always be with drawn provided it was not been properly accepted, since until acceptance takes place no legal obligation period he may where
The offeror agrees to keep the offer open for a specified period he may under English law with draw. It at any time without liability. The only situation where the offeror will be bound on such a promise is where he enters into a separate contract to keep the offer open such a contract must how ever be supported consideration.
Where the offeror seeks to withdraw an offer he must communicate his change of mind to the offeree.
Lapse of time -Where no time limit is place on the offer it may nevertheless be terminated by the passage of a reasonable, length of time .What is reasonable depends on the circumstance of each case .Thus if the language used in the offer denotes a sense of urgency for example; I must hear from you very soon the time within which the offer must be accepted will be shorter than if no such words were used words were used. Similarly the use of a telegram to send the offer suggests a degree of urgency.
Death- where the offeror dies before acceptance the offer will lapse. Notice of the death must however, reach the offeree before he communicates acceptance, similarly, death of the offeree will normally terminate an offer unless the offer was made to the word at large.
Counter offer or conditional acceptance. When an offeree makes a counter offer or says that he accepts but only on certain conditions the offer lapse. This is because a counter offer or conditional acceptance implies that the original offer is rejected. For example A offer to sell his motorcycle to B for Rs. 15000/= B says that he will purchase the motorcycle for Rs. 15000/- A’s offer has been rejected by B has made a counter offer.
It is not always the case, however that the first stage in negotiations is an offer, often the first step is an entirely passive state and is not therefore open to acceptance ,e.g. a tin of beans sitting on a supermarket shelf. This is not an offer and is called an invitation to treat, in other words an invitation to the other pairly to make an offer, usually an offer to buy. The contract is then formed by the agreement to sell which is the acceptance in this case.
2. Discuss as weather an intention to create legal relation is an essential in Tanzania law of contract.
A contract is essentially a commercial agreement, an agreement between two parties which enforceable in law. It is based on the promises that two parties make to each other. However, while the law rightly protects many of the promises that we make to one another, not all promises are contractual .For instance, a beneficiary under a will has in effect been promised that inheritance and has a legal right to receive it. The will is not, however, covered by contract law. The heir has promised nothing in return for inheritance.
A contract can alternatively be called a bargain one party makes a promise in return for the promise of the other and the promises are mutually enforceable because of the price that one party has paid for the promise of the other.
An intention to create legal relation is an essential in Tanzania law of contract, the law makes a sensible compromise by assuming that in certain situations we would not. Usually intend the agreement to be legally binding .While in others we usually would. The first covers social or domestic arrangements where it is presumed there is no intention to be legally bound. The second concerns commercial or business agreements where an intention to be legally bound is presumed in either case the fact can show that the presumption should not apply so intention is very much decided on the facts in individual cases.
Social and Domestic agreements.
Agreements between Family members are usually left to them to sort out themselves and are not legally binding.
Balfour V Balfour (1919)
A husband worked abroad without his wife who had to stay in England because of illness and promised an income of $30 per month. When the wife later petitioned for divorce, her claim to this income failed .It had been made at an amicable point in their relationship, not in contemplation of divorce. It was a purely domestic arrangement beyond the scope of the court.
Where the husband and wife are estranged, an agreement between them may be taken as intended to be legally binding.
Merritt v Merritt (1970)
Here the husband had deserted his wife for another women .An agreement that he would pay her an income if she paid the outstanding mortage was held by the court to be intended to create legally binding obligations.
Sometimes, of course, families make arrangements that appear to be business arrangements because of their character. In such cases the court will need to examine what the real purpose of the arrangements was.
Jones V padavatton (1969)
Where a mother agreed to finance and houses her daughter during studies. Later after a quarrel the mother went back on her agreement. Held that it was not legally binding as it was a social or domestic arrangement.
If the money has passed hands then it will not matter that the arrangement is made socially. It will be hold as intended to be legally binding.
Simpkins V Pays (1955)
A lodger and two members of the household entered competitions in the lodgers name but paving equal shares of the entry money and on the understanding that they would share any winnings. So when the lodger won, he was bound to share the winning.
If parties put their financial security at risk for an agreement, then it must have been intended that the agreement should be legally binding.
Parker V Clarke (1960)
A young couple were persuaded by an order couple to sell their house in order to move in with them, with the promise also that they would inherit property on the death of the old couple. When the two couples eventually fell out and the young couples were asked to leave, their action for damages succeeded. Giving up their security was an indication that the arrangement was intended to be legally binding.
Commercial and business agreement.
An agreement made within a business context is presumed to be legally binding unless evidence can show different intent
Edward V Skyway Ltd (1969)
An attempt to avoid making an agreed ex gratia payment in a redundancy failed. Although ex gratia Indicates no pre –existing liability to make the payment ‘the agreement to pay it , once made ,was binding.
The offer of free gifts where this is to promote the business can still be held to be legally binding.
ESSO Petroleum Co. Ltd V. commissioners of customers of customs and Excise (1 976)
Esso gave free world cup coins with every four gallons of petrol purchased. Customs and exercise wanted to claim purchase tax from transaction. Since ESSO were clearly trying to gain more business from the promotion there was held to be intention to be bound by the arrangement.
The principle has also been developed to cover situations where prizes are offered in competitions. The purpose of such events is generally to promote the body offering the prize so there is binding and can be relied on by members of the public who enter the competition.
Mc Rowan V Radio Buxton (2001)
The claimant entered a radio competition for which the price had been stated to be a Renault Clio car she was told that she had won competition but was given a four – inch scale mode 1 of a Clio . The defendants argued that there was legally binding contract. The judge held that there had been intention to create legal relation .The claimant entered the competition as a member of the public and` looking at the transcript of the broadcast, there was not even a him that the car would be a toy’.
However, it is possible for the agreement to contain no intention to be legally binding where that is specifically stated in the agreement itself.
Jones V Vernon’s pools Ltd (1938),
The pools company inserted a clause on all coupons starting that “the transaction should not give rise to any legal relationship……. But be binding in the honour only". When a punter claimed that the company had lost his winning coupon ang sought payment, his failed. The clause prevented any legal claim.
The same type of principle apples with so- called comfort letters. Although such letters are worded so that they appear almost to amount to a guarantee, they do not and will not give rise to legal obligations.
Kleinwort Benson Ltd V Malaysian Mining Corporation (1989)
Kleinwort let$10 million to metals Ltd, a subsidiary of MMC. The parent company would not guarantee this loan but issued a comfort letter starting their intention to ensure Metals had sufficient funds for payment. Metals went out of the business without repaying Kleinwort the letters action based on the comfort letter failed. If they had wanted a guarantee they should have insisted on one.
Sometimes judges will find that parts of an agreement are intended to be legally binding, and other parts are not.