The area of the law applicable to this case is offer and acceptance, counter offer, request for

information upon acceptance and breach of contract under the main area properly called contract.

An offer is a definite promise to be bound, provided the terms of the offer are accepted. In
NTHC Ltd v. Antwi1, an offer was defined as an indication in words or by conduct by an offeror
that he or she is prepared to be bound by a contract in the terms expressed in the offer if the
offeree communicates to the offereor his or her acceptance of those terms.2

Acceptance occurs when the party answering the offer agrees to the offer by way of a statement
or an act. Acceptance must be unequivocal and communicated to the offer or: the law will not
deem a person to have accepted an offer merely because they have not expressly rejected it. In
order to qualify as an acceptance the response of the offeree must be a final an unqualified assent
to the terms proposed in the offer.3

A reply or response to an offer which varies the terms of the offer or introduces terms different
from those indicated in the offer amounts in law to a counter offer and not an acceptance.4

A counter offer is where an offeree responds to an offer by making an offer

on different terms. This has the affect of destroying the original offer so that
it is no longer open for the offeree to accept 5. The defendant offered to sell a farm to
the claimant for 1,000. The claimant in reply offered 950 which the defendant refused. The
claimant then sought to accept the original offer of 1,000. The defendant refused to sell to the
claimant and the claimant brought an action for specific. performance. It was held that there was
no contract and where a counter offer is made this destroys the original offer so that it is no
longer open to the offeree to accept.

1 [2009] SCGLR 117

2 Per Date-Bah JSC, in NTHC ltd v. Antwi [2009] SCGLR 117, 125

3 Hyde v. Wench (1840) 3 Beav. 3334

4 [1984-1986] 1 GLR 545

5 Hyde v Wrench (1840) 49 ER 132 Chancery Division (Decided by Lord Langdale MR)
Request for information

If the offeree, while not accepting an offer, asks for further information, or tests out the ground to
see if further negotiation is possible, this is not treated as a counter offer; it, thus, does not
destroy the offer as stated in the Law for business students per Alix Adams; fourth edition; p53,
2006. A request for information about an offer (such as whether delivery could be earlier than
suggested) does not amount to a counter-offer, so the original offer remains open. Entorres v
Miles Far East [1955] 2 QB 327 Court of Appeal

The claimant sent a telex message from England offering to purchase 100 tons of Cathodes from
the defendants in Holland. The defendant sent back a telex from Holland to the London office
accepting that offer. The question for the court was at what point the contract came into
existence. If the acceptance was effective from the time the telex was sent the contract was made
in Holland and Dutch law would apply. If the acceptance took place when the telex was received
in London then the contract would be governed by English law.

Held:To amount to an effective acceptance the acceptance needed to be communicated to the

offeree. Therefore the contract was made in England. An acceptance has no effect unless and
until it is communicated to the offereor or otherwise brought to his notice. Entorres v Miles Far
East [1955] 2 QB 327 Court of Appeal. An offeree who does nothing upon receiving an offer
which prescribes silence as the mode of acceptance is not bound by any contract 6 Felthouse v.
bindley (1862) 11 C.C. (N.S.) 869.

a. Qualified acceptance. A qualified or conditional acceptance proposes an exchange different

from that proposed by the original offeror. Such a proposal is a counter-offer and ordinarily
terminates the power of acceptance of the original offeree.

b. Statement of conditions implied in offer. To accept, the offeree must assent unconditionally to
the offer as made, but the fact that the offeree makes a conditional promise is not sufficient to
show that his acceptance is conditional. The offer itself may either expressly or by implication
propose that the offeree make a conditional promise as his part of the exchange. By assenting to
such a proposal the offeree makes a conditional promise, but his acceptance is unconditional.
The offeror's promise may also be conditional on the same or a different fact or event.

Acceptance
Acceptance is defined as an assent to the proposal by the person to whom it was made. For there to be a valid
contract, the offer has to be proved and it must be satisfied that the offeree has accepted the offer.
The mirror image rule " states that if you are to accept an offer, you must accept an offer exactly how it is

6
Felthouse v. bindley (1862) 11 C.C. (N.S.) 869.
without modifications; if you change the offer in any way, this is a counter-offer that kills the original offer.
However, a mere request for information is not

b.

Acceptance

There are a few principles and rules of acceptance. According to S4 (1) CA 1950, the
communication of proposal is complete when it comes to the knowledge of the person to whom
it is made (offeree). Besides, communication of acceptance is complete when it is communicated
to the offeror.

As the topic we are discussing, acceptance must be communicated to the proposer in order to
make a contract valid. There are several rules dealing with the communication of acceptance that
are the acceptance must be communicated. It was depending on the construction of the contract,
the acceptance may not have to come until the announcement of the performance of the
conditions in the offer but nevertheless the acceptance must be communicated. Felthouse v
Bindley [1862] EWHC CP J35 Court of Common Pleas

A nephew discussed buying a horse from his uncle. He offered to purchase the horse
and said if I don't hear from you by the weekend I will consider him mine. The horse
was then sold by mistake at auction. The auctioneer had been asked not to sell the
horse but had forgotten. The uncle commenced proceedings against the auctioneer for
conversion. The action depended upon whether a valid contract existed between the
nephew and the uncle.

Held:

There was no contract. You cannot have silence as acceptance.

In the case of Felthouse v Bindley silence is not acceptance must communicate acceptance. A
party must make a positive act to constitute acceptance. Cant impose an obligation on another
party to accept or refuse. Acceptance, whether by the words or conduct, is not effective until it is
actually communicated to the offeror by the offeree or his authorized agent. The main reason for
this rule is to protect the offeror who could otherwise find himself in the unenviable position of
being bound to a contract without his knowing that his offer had been accepted.
An exception to this general rule is the acceptance, which sent by post. This exception is
commonly known as the postal rule. The postal rule states that an acceptance by post takes
effect when the acceptance is posted and not when the acceptance is actually received. The effect
of this rule is that the acceptance is valid before it is actually communicated to the offeror. This is
true even where the letter never reaches its destination.

However, the postal rule cannot be applied in all cases where the acceptance is by post. It can
only apply where it is specified that acceptance may be by way of post or where it is reasonable
to post the acceptance, such as where the offer itself was sent by post. Of course, where the terms
of the offer itself exclude the postal rule, it will not be applicable. For instance, the terms of the
contract may say expressly that the acceptance is effective only when received by or
communicated to the offeror. If this is the case, then there is obviously no scope for the
application of the postal rule. It should also be noted that the postal rule applies only to letters,
which have been properly stamped and addressed.

It is importance to realize that the postal rule only applies to the communication of acceptance. It
does not apply to communication of an offer or the communication of a revocation of an offer or
to the communication of a revocation of an acceptance.

Breach of Contract
A contract case usually comes before a judge because one or both parties claim that the contract
was breached. A breach of contract is a failure, without legal excuse, to perform any promise that
forms all or part of the contract. This includes failure to perform in a manner that meets the
standards of the industry or the requirements of anyexpress warranty or implied warranty,
including the implied warranty of merchantability.

A breach of contract can be material or minor. The parties obligations and remedies depend on
which type of breach occurred. A breach is material if, as a result of the breaching partys failure
to perform some aspect of the contract, the other party receives something substantially different
from what the contract specified. For example, if the contract specifies the sale of a box of tennis
balls and the buyer receives a box of footballs, the breach is material. When a breach is material,
the nonbreaching party is no longer required to perform under the contract and has the immediate
right to all remedies for breach of the entire contract.

Factors that the courts consider in determining materiality include:

A breach is minor if, even though the breaching party failed to perform some aspect of the
contract, the other party still receives the item or service specified in the contract. For example,
unless the contract specifically provides that time is of the essence (i.e. deadlines are firm) or
gives a specific delivery date of goods, a reasonable delay by one of the parties may be
considered only a minor breach of the contract. When a breach is minor, the nonbreaching party
is still required to perform under the contract, but may recover damages resulting from the
breach. For example, when a sellers delay in delivering goods is a minor breach of contract, the
buyer must still pay for the goods but may recover any damages caused by the delay.

8.

Re-engagement/reinstatement

Reinstatement is where the employee is given his old job back on the same terms and conditions,
to the employer on similar terms and conditions, but not in the same job. These remedies will not
be ordered if there is no job for the employee to return to or where trust and confidence between
the employer and employee has broken down.

Claims for re-engagement or reinstatement are often made by employees as a tactical move, in
the knowledge that additional compensation will be paid if the employer refuses to comply with
such an order.

If re-engagement or reinstatement is ordered and the employer does not comply, then the tribunal
may order the employer to pay additional compensation 'having regard to the loss suffered by the
employee' of between 26 and 52 weeks' pay, subject to the statutory maximum.

Orders for re-engagement or reinstatement are only made in around 1% of all successful unfair
dismissal cases. In Perkins v Grace Worldwide Pty Ltd (1997) 72 IR 186 , Perkins was
summarily dismissed for supplying marijuana to fellow employees. The trial judge found the
dismissal was harsh, unjust or unreasonable because there was no clear evidence that Perkins had
supplied the drugs. The trial judge nevertheless declined to reinstate him on the grounds that his
employers continued belief that the accusations were true was reasonably held and his
consequent loss of confidence in Perkins made reinstatement impracticable. On appeal, the Full
Court overturned the decision. The court rejected the approach that an employers reluctance to
take back an employee he had accused of wrongdoing necessarily destroyed the relationship of
trust and confidence between them, thereby making reinstatement impracticable. To adopt such
an attitude, said the court, would deny access by unfairly dismissed employees to the primary
remedy provided by the legislation. Whilst it may be difficult, embarrassing or inconvenient for
an employer to re-employ a person he or she believes guilty of wrongdoing, the problems will
be of the employers own making. In any case, if the employer is of even average fair-
mindedness, such problems are likely to prove short-lived and do not necessarily indicate such a
loss of confidence as to make reinstatement inappropriate. These matters remain relevant to the
question of whether reinstatement is appropriate in a particular case. One important issue is
whether the working relationship has irretrievably broken down. In Maluk v Sutton Tools Pty
Ltd, Ross VP held that reinstatement of an employee of more than 13 years standing was
inappropriate, even though the employees prospects of obtaining alternative employment were
limited. The main reason was the damage caused to the working relationship by the employees
refusal to perform work as directed over a substantial period of time. The refusal was prompted
in part by a work injury, the effect of which was disputed. It was unlikely that a good working
relationship could be re-established. The Commission treats the issue similarly to the issue of a
loss of trust and confidence by the employer in the employee. The mere assertion that the
working relationship has broken down irretrievably will not justify a refusal of reinstatement -
there must be clear evidence. The Commission will take into account the capacity of both
employee and employer to overcome previous difficulties, and is inclined to take a positive
attitude to the capacity of an initially unwilling employer to re-establish the working relationship
satisfactorily.

Rectification of Contracts
If a written document does not reflect the actual agreement that the parties have reached, the court may be willing to rectify the contract, that is to
substitute the original text with corrected wording to give effect to the parties' true intentions. This guide gives an overview of the legal principles
under English law relating to the remedy of rectification.

If, due to a mistake or oversight, a written document does not reflect the actual agreement the parties to a contract have reached, the court may be
willing to order rectification of the written instrument reflecting their agreement. Rectification involves the court modifying the document by
substituting the whole or part of the original text with corrected wording to give effect to the parties' true intentions. 1 Lovell and Christmas Ltd -v- Wall
(1911) 104 LT 85. In rectifying the document the court is aiming to put the parties in the position in which they would have been had the mistake or
oversight not occurred.22 Walker -v- Armstrong (1856) 8 De GM & G 531.

If rectification is granted the order has retrospective effect, so the rectified document will be read as if it had
originally been drawn up in its rectified form. This can have unexpected implications for the parties for instance
with regard to retrospective tax liability.

The equitable remedy of correcting of mistakes made in recording agreements. By its nature,
rectification is only applicable in the case of written contracts.

If the parties agree to rectification, they may correct the mistake by entering into a deed of
rectification. It is necessary to apply to court for an order for rectification if either there is a
dispute or the parties wish to ensure that rectification has retrospective effect. The burden of
proof is on the party seeking rectification who must be able to produce convincing proof that the
agreement does not reflect the intentions of the parties and the agreement as rectified will reflect
those intentions.

The Equitable and Discretionary Remedy of Rectification

October 6th | 2013

Rectification: The Governing Legal Principles

The Ontario case of Kanji v Canada Attorney General 2013 ONSC 781 provides a good review
of the law of rectification of a mistake.
A taxpayer attempted unsuccessfully to rectify a trust that was going to incur a great deal of
taxation.

16 Let me start by considering the law concerning rectification in the case of a contract which
results from negotiations between two arms-length parties. Rectification is an equitable remedy.
As described by Binnie J in Sylvan Lake Golf& Tennis Club Ltd. v. Performance Industries Ltd:
209 DLR (4th) 318 SCC

The traditional rule was to permit rectification only for mutual mistake, but rectification is now
available for unilateral mistake (as here), provided certain demanding preconditions are met.
Insofar as they are relevant to this appeal, these preconditions can be summarized as follows.
Rectification is predicated on the existence of a prior oral contract whose terms are definite and
ascertainable. The plaintiff must establish that the terms agreed to orally were not written down
properly. The error may be fraudulent, or it may be innocent. What is essential is that at the time
of execution of the written document the defendant knew or ought to have known of the error
and the plaintiff did not. Moreover, the attempt of the defendant to rely on the erroneous written
document must amount to fraud or the equivalent of fraud. The courts task in a rectification
case is corrective, not speculative. It is to restore the parties to their original bargain, not to
rectify a belatedly recognized error of judgment by one party or the other (citations omitted) In
Hart, supra, at p. 630, Duff J. (as he then was) stressed that [t]he power of rectification must be
used with great caution. Apart from everything else, a relaxed approach to rectification as a
substitute for due diligence at the time a document is signed would undermine the confidence of
the commercial world in written contracts.[FN9]

17 The person seeking rectification bears the onus of satisfying the court that the request to
rectify merelywould align the document with the true intentions underlying it and that the aspects
sought to be rectified are mistakes which obstruct the true intentions which drove the documents
formation.[FN10] Although over the years some cases have held that a person seeking
rectification must make out its case on a clear and convincing standard, in C. (R.) v. McDougall
the Supreme Court of Canada held that in civil cases only one standard of proof exists at
common law proof on a balance of probabilities.[FNl 1] Of course, judges must remain mind-
ful of inherent probabilities or improbabilities.[FN12] In this regard, the comments of Brightman
LJ. in Thomas Bates & Son Ltd. v. Wyndhams (Lingerie) Ltd. are apposite:
The standard of proof required in an action of rectification to establish the common intention of
the parties is, in my view, the civil standard of balance of probability. But as the alleged common
intention ex hypo-thesi contradicts the written instrument, convincing proof is required in order
to counteract the cogent evidence of the parties intention displayed by the instrument itself. It is
not, I think, the standard of proof which is high, so differing from the normal civil standard, but
the evidential requirement needed to counteract the inherent probability that the written
instrument truly represents the parties intention because it is a document signed by the parties.
[FN13]
Rectification of a mistake is a discretionary remedy which should be cautiously watched and
guarded, [FN 14] especially in the case of a voluntary settlement. [FN 15]

The Equitable Remedy of Rescission: A Tool to Defeat

Fraud
Most insurance fraud perpetrators know crime but have no knowledge of insurance. It is difficult
to prove fraud in the presentation of a claim. It is relatively easy, on the other hand, to rescind a
policy if the fraudster lies to get the insurance in the first place.

Rescission

Rescission is an equitable remedy as ancient as the common law of Britain. (Carter v. Boehm,
S.C. 1 Bl.593, 3 Burr 1906, British House of Lords, 11th May 1766)

When the United States was conceived in 1776 the founders were concerned with protecting
their rights under British common law. They adopted it as the law of the new United States of
America modified only by the limitations placed on the central government by the U.S.
Constitution approved in 1789.

The viability and ability to enforce contracts was recognized as essential to commerce. Courts of
law were charged with enforcing legitimate contracts. Courts of equity were charged with
protecting contracting parties from mistake, fraud, misrepresentation and concealment since
enforcing a contract based on mistake, fraud, misrepresentation or concealment would not be
fair.

The common law developed rules that courts could follow to refuse to enforce the terms of a
contract that was entered into because of mutual mistake of material fact, a unilateral mistake of
material fact, the breach of warranty (a presumptively material promise to do or not do
something), a material concealment, or a material misrepresentation. The remedy called
rescission created a method to apply fairness to the insurance contract and allow an insurer to
void a contract and allowed courts to refuse to enforce such a contract entered into by
misrepresentation or concealment of material facts.

Insurance contracts, unlike common run-of-the-mill commercial contracts, are considered to be

contracts of utmost good faith. Each party to the contract of insurance is expected to treat the
other fairly in the acquisition and performance of the contract. For example, the prospective
insured is required to answer all questions about the risk he, she or it are asking the insurer to
take and about the person the insurer is asked to insure.

Rescission, since before the U. S. Constitution, became an important remedy for insurers. As a
contract of utmost good faith insurers and the courts recognized that the parties to a contract of
insurance were more vulnerable than other contracting parties to misrepresentation or
concealment of material fact. The remedy is available to either party to the contract and when
one determines it was deceived into entering into the contract it may declare the contract void
from its inception, return the consideration and treat it as if it never existed.

When an insurer or the insured discovers the existence of a factual basis for rescission they have
the opportunity, but not the duty, to exercise the remedy of rescission.

In most states the remedy is available to both parties to the contract of insurance whether the
party deceived believes the deceit was the result of a fraud or simply an innocent
misrepresentation or concealment of a material fact. To do otherwise would be to make a gift to
the person who deceived the insurer of rights not available to the truthful.

Equitable remedies, like the remedy of rescission, are expected to be fair. Some states, like
California, follow the ancient equitable remedies and have codified the right to rescission of
insurance contracts. The legislative right to rescission arose because legislatures considered it
unfair to make a contracting party abide by a contract that was not obtained fairly. The ancient
maxim that No one can take advantage of his own wrong is applied when a court is faced with
a request to confirm rescission. Other states have imposed limitations on insurers in their state
and make the ability to rescind a contract of insurance more difficult than it was under the
common law.

Insurers must use the rescission remedy with care. Insurers should never assume that the promise
to pay indemnity to the insured under a policy of insurance can, with impunity, be broken by
advising the insured that the insurer has rescinded the policy.

Rescission without sufficient evidence is wrongful. Rescission without the advice of competent
counsel is a tactic fraught with peril. Rescission without a thorough investigation is dangerous.
Where no valid ground for rescission exists, the threat or attempt to seek such relief, may
constitute a breach of the covenant of good faith and fair dealing which is implied in the policy
and expose the insurer to tort damages for that breach, including punitive damages.

One plaintiffs lawyer became wealthy when he learned that claims people were given a rubber
stamp that said RESCISSION and had no idea what it was. He would take the claims persons
deposition and ask them to spell the word. When the claims person failed his bad faith case was
established. When they spelled the word correctly, he would ask the adjuster to state the elements
necessary to effect a rescission. Almost none could answer.

California, with a Draconian rescission law, still make it clear that if an insurer elects rescission
without sufficient evidence it will bring the wrath of the courts down on it and will be the basis
for allegations, easily proven, of extra-contractual torts. (Imperial Casualty & Indemnity Co. v.
Sogomonian (1988) 198 Cal.App.3d 169, 184, 243 Cal. Rptr. 639.) [enhanced version available
to lexis.com subscribers].

If sufficient evidence exists, the rescission remedy will deprive the insured or the insurer of all
rights under the policy. The court will conclude that the contract never existed and neither party
has any right under the contract.

Bases for Rescission

The primary bases for rescission are:

1. misrepresentation or material fact(s),

2. concealment of material fact(s),

3. mistake of material fact(s),

4. mistake of law,