Contract Law
Introduction
A contract is a legally binding agreement involving two or more parties. One of the requirements of a contract is that there must be an agreement between the parties involved. In this case, an offer must have been made by one of the parties. In order for the contract to be legally binding the other party must accept the terms of the agreement. Traditionally, it was necessary for both parties to physically sign the contract so that it can be legally binding. However, we the advances in technology, this is no longer required. The emergence of electronic contracts (e-contracts) means that an offer can be made online and the second party can also confirm the agreement online, implying that they agree to the terms and conditions stipulated. In this case, the internet acts as a medium. E-contracts enable parties entering into a contract to conclude it in a matter of seconds, at the click of a button. However, e-contracts raise various issues such as modifications of contracts and jurisdiction that pose a challenge to other conventional ideation of contract law. This essay seeks to establish whether a contract is formed between Lorraine Davies, a guest who booked online into a bed and breakfast hotel, and the hotel, and the legal basis for her stay in the hotel in the event that no contract existed between both parties.
Summary of the case
Lorraine Davies books into a bed and breakfast hotel in Northumberland via their website. However, prior to entering her credit card details, thereby completing the booking, she reads through the hotel's 'standard terms and conditions' as displayed on their online reservation system. Lorraine feels that the terms and conditions seem to favour the hotel and so she expresses her opinion via the reservation system that confirmation of her reservation by the hotel would serve as an indication that they had agreed to waive all the standard terms and conditions stipulated. Upon pressing the 'Book now' button, Lorraine's reservation is confirmed. Lorraine does not engage with the hotel in any further communication. It is not until the next morning that the hotel's receptionist notices the 'special request' made by Lorraine but views it as a joke and hence ends up taking no action.
Analysis of the case
The case under this scenario outlines the existence of a contract between two parties: Lorraine Davies and a bed and breakfast hotel in Northumberland. The case further provides all the three necessary requirements for the formation of a valid contract: offer, acceptance, and consideration. In the event that one of the parties to a contract extends an offer to the second party, and the other party agrees to it, including the terms and conditions contained therein following a valid consideration of the same, then the contract so formed is legally binding. The first issue that we need to take into account is whether the information contained in the hotel's online booking system constitutes an offer. Poole defines an offer under contract law as 'a definite promise to be bound, without more, if the offeree agrees to the offer terms.'
We could conclusively argue that the information contained in the hotel's booking system is sufficient to enable it to make an offer. This is because the hotel has issued its terms and conditions that Lorraine must agree with in order for the contract to be valid. Secondly, it is important to examine the issue of acceptance as it relates to this scenario. The element of acceptance is also evident in the scenario. By booking through the hotel’s online reservation system and the subsequent confirmation of the reservation, a contract is established between the hotel and the client.
In the scenario, Lorraine turned up for the reservation. Similarly, the hotel provided the client with all the services as stipulated in making the reservation. The way in which the hotel's booking system has been designed is that the customer is required to click the ‘accept button’ after having read the terms and conditions stipulated. When this happens, the customer is deemed to have agreed to the terms of the contract. As such, when Lorraine clicked the 'Book Now' button, she had effectively agreed to be bound by the hotel's standard terms and contains that she was not happy with. This is also an indication that the contract between the hotel and Lorraine was binding.
The agreement between Loraine and the hotel is also legally binding since Lorraine is an adult who willingly enters into a contract with another legal entity, in this case, the hotel. The legality of the agreement is further enhanced by the fact that Lorraine is seeking bed and breakfast services, and these services are recognised by law as legal.
Lorraine entered into a standard-form contract that has been drafted by the hotel to favour them and often includes non-negotiable provisions. As such, although Lorraine made sent a special request to the hotel that her booking is governed by applicable statutes and rules, as opposed to the hotel's standard terms and conditions, she lacked the bargaining power to alter the standards of the contract because it is a standard-form contract. Therefore, her stay at the bed and breakfast hotel was subject to the hotel's stipulated standard terms and conditions. Therefore, there would be no grounds for enforcing her ''special request' under a court of law. However, she could decide to sue the hotel for damages, in which case the court could caution them for liability.
Conclusion
The e-contract between Lorraine and the hotel fulfills all the primary prerequisites of a contract: offer, consideration, and acceptance. However, this is a standard-form contract that the hotel has drafted in order to favour them and while Lorraine is not happy with it, as evidenced by her sending a 'special request' to the hotel before confirming her credit card details, she lacks the bargaining power over the contract. Her subsequent stay at the hotel, therefore, hinges on the terms of the standard-form contract.
Bibliography
Austen-Baker, R and Zhou, Q, Contract in Context (Routledge 2014) 118
Bhana, D, Bonthuys, E and Nortje, M, Student's Guide to the Law of Contract (Juta 2013) 83.
Miller, RL and Cross, FB,The Legal Environment Today: Business In Its Ethical, Regulatory, E-Commerce, and Global Setting (Cengage Learning 2012)
Poole, J, Contract Law Concentrate: Law Revision and Study Guide (Oxford University Press 2015) 1
Richard Austen-Baker and Qi Zhou, Contract in Context (Routledge 2014) 118
LeRoy Miller and Frank Cross, The Legal Environment Today: Business In Its Ethical, Regulatory, E-Commerce, and Global Setting (Cengage Learning 2012)
