Giant Car case Essay Example | Topics and Well Written Essays - 1250 words

Giant Car case - Essay Example In the current case the other elements, intention to create legal relations and consideration, are not in question, but the element of offer and acceptance is. In this respect, it is significant to show first that there was a valid offer and secondly that the offer was accepted. In order to form a contract, the parties involved must reach a mutual consent or meeting of minds. This mutual consent is attained through offer and acceptance that does not alter the terms of the offer.1 The rule applicable in determining if there is mutual consent is the application of the mirror image rule. The rule dictates that an offer must be accepted without altering the terms of the offer. An alteration of the terms of the offer amounts to a counter offer and cancels the initial offer. Lord Langdale in Hyde v Wrench2 ruled that a counter offer acts to cancel the initial offer. In this case, Wrench offered to sell Hyde a farm for ?1,000. Hyde in reply to this offer offered ?950 for the farm which Wren ch refused. Hyde thereafter wanted to accept the initial offer of ?1,000. Wrench refused to sell him the land and Hyde brought an action for specific performance. The question before the court was whether a valid contract between Hyde and Wrench existed. In deciding that there was no legally binding contract, the court noted that when a counter offer is made this offer destroys the initial offer such that the initial offer is no longer open to be accepted by the offeree. ... Additionally, these responses may deal with other issues rather than substitute the original terms of the offer.3 Their language can also manifest an intention to retain the initial offer under consideration, and they should not be considered counter offers. A mere inquiry on the offer does not constitute a counter offer Stevenson v McLean4. In this case, McLean wrote to Stevenson on Saturday with an offer to sell iron ore. The letter indicated that McLean would sell the ore for 40s in cash, and the offer was to remain open till Monday. On Monday Stevenson telegraphed McLean asking if he would accept 40 for delivery over two months and if that was not possible the longest period that was acceptable. McLean later sold the iron ore to a third party after receiving the telegram from Stevenson. McLean later sent a telegram to Stevenson that he had sold the Iron ore, but Stevenson had telegraphed Mclean accepting his offer prior to receiving the telegram indicating the ore was already sol d. The question was whether the telegram sent by Stevenson was counter offer or a mere inquiry to the original offer. In arriving at its decision, the court observed that the wording in the communication did not include anything specific to infer a rejection but was a mere inquiry which ought to have been answered and not considered a rejection of the offer.5 It is, therefore, essential to note that in order to distinguish between an inquiry and a counter offer it is prudent to look at the details of the communication. A counter offer varies the terms of the original offer while an inquiry does not vary these terms. In Simon's case, his communication that he would buy the car at ?5,500 was a counter offer to the