Contract Law
Offer
A contract is an agreement that the law will enforce.
Contract law is largely derived from common law.
In more recent years, Parliament has introduced acts to help govern contract law. For
example:
- The Sale of Goods Act 1979
- Consumer Rights Act 2015
Formation of a contract
For there to be an agreement, there are essential requirements that need to be met.
- Offer
- Acceptance
- Consideration (including privity)
- Intention to create level relations
Offer - a proposal showing a willingness to contract on firm and definite terms
Offeror - the person who makes the offer
Offeree - the person to whom an offer is made
Invitation to treat - this is an indication that one person is willing to negotiate a contract with
another, but they are not yet willing to make a legal offer.
An invitation to treat is not an offer so it cannot be accepted when making a contract.
Is It an Offer or Invitation to Treat
Gibson v Manchester CC (1979)
- The council’s letter was not an offer due to the uncertainty of ‘may be prepared to’.
Adverts - Partridge v Crittenden
- Exception - unilateral contracts
Unilateral contracts
- An agreement to pay in exchange for performance. There is no obligation to perform
the act.
Bilateral contracts
- Requires both the offeror and offeree to do something. Both parties have obligations.
Unilateral contract
Carlill v Carbolic Smoke Ball Co. (1983)
Goods in a shop window or shop shelf
- Fisher v Bell (1961)
Goods in an auction
- British Car Auctions v Wright (1972)
, Contract Law
Requests for information
- Harvey v Facey (1893)
Who Can Make An Offer?
- An offer can be made by anyone ie., an individual, a company etc.
- It can also be made through a notice or a machine.
Thornton v Shoe Lane Parking (1971)
Who Can An Offer Be Made To?
- Individual
- Group
- The World
How Long Does An Offer Last?
- An offer can only be accepted while it is open. Once the offer has ended, it can no
longer be accepted.
- An offer comes into existence when the offeror communicates this to the offeree. The
offeree is then aware of the offer.
How Might An Offer End?
Revocation
- An offer can be withdrawn at any time before the acceptance. The offeror must
communicate the revocation to the offeree for the revocation to take place.
Routledge v Grant (1828)
Rejection
- If the offeree rejects the offer, they cannot choose to accept the same offer again
later on. The rejection must be communicated to the offeror.
- If the offer is made to a group of people, one offeree’s rejection will not stop the rest
of the offeree from being able to accept.
- An example of a rejection is through a counteroffer.
Hyde v Wrench (1840)
Lapse of Time
- An offer can come to an end when time has passed. If the offer had a set period of
time, then as soon as this time period expires, the offer can no longer be accepted.
- If no time has been set, we assess whether the offer has been accepted in a
‘reasonable’ amount of time.
Ramsgate Victoria Hotel v Montefiore (1866)
Death
- If the offeree dies, then the offer ends. Any executors or administrators of the
offeree’s estate would have to make a new offer with the offeror.
- If the offeror dies, acceptance can still take place until the offeree learns of the
offeror’s death.
Acceptance
Offer
A contract is an agreement that the law will enforce.
Contract law is largely derived from common law.
In more recent years, Parliament has introduced acts to help govern contract law. For
example:
- The Sale of Goods Act 1979
- Consumer Rights Act 2015
Formation of a contract
For there to be an agreement, there are essential requirements that need to be met.
- Offer
- Acceptance
- Consideration (including privity)
- Intention to create level relations
Offer - a proposal showing a willingness to contract on firm and definite terms
Offeror - the person who makes the offer
Offeree - the person to whom an offer is made
Invitation to treat - this is an indication that one person is willing to negotiate a contract with
another, but they are not yet willing to make a legal offer.
An invitation to treat is not an offer so it cannot be accepted when making a contract.
Is It an Offer or Invitation to Treat
Gibson v Manchester CC (1979)
- The council’s letter was not an offer due to the uncertainty of ‘may be prepared to’.
Adverts - Partridge v Crittenden
- Exception - unilateral contracts
Unilateral contracts
- An agreement to pay in exchange for performance. There is no obligation to perform
the act.
Bilateral contracts
- Requires both the offeror and offeree to do something. Both parties have obligations.
Unilateral contract
Carlill v Carbolic Smoke Ball Co. (1983)
Goods in a shop window or shop shelf
- Fisher v Bell (1961)
Goods in an auction
- British Car Auctions v Wright (1972)
, Contract Law
Requests for information
- Harvey v Facey (1893)
Who Can Make An Offer?
- An offer can be made by anyone ie., an individual, a company etc.
- It can also be made through a notice or a machine.
Thornton v Shoe Lane Parking (1971)
Who Can An Offer Be Made To?
- Individual
- Group
- The World
How Long Does An Offer Last?
- An offer can only be accepted while it is open. Once the offer has ended, it can no
longer be accepted.
- An offer comes into existence when the offeror communicates this to the offeree. The
offeree is then aware of the offer.
How Might An Offer End?
Revocation
- An offer can be withdrawn at any time before the acceptance. The offeror must
communicate the revocation to the offeree for the revocation to take place.
Routledge v Grant (1828)
Rejection
- If the offeree rejects the offer, they cannot choose to accept the same offer again
later on. The rejection must be communicated to the offeror.
- If the offer is made to a group of people, one offeree’s rejection will not stop the rest
of the offeree from being able to accept.
- An example of a rejection is through a counteroffer.
Hyde v Wrench (1840)
Lapse of Time
- An offer can come to an end when time has passed. If the offer had a set period of
time, then as soon as this time period expires, the offer can no longer be accepted.
- If no time has been set, we assess whether the offer has been accepted in a
‘reasonable’ amount of time.
Ramsgate Victoria Hotel v Montefiore (1866)
Death
- If the offeree dies, then the offer ends. Any executors or administrators of the
offeree’s estate would have to make a new offer with the offeror.
- If the offeror dies, acceptance can still take place until the offeree learns of the
offeror’s death.
Acceptance
