Contract Law
Key elements of a contract:
Capacity
Agreement - offer and acceptance
Intention
Consideration
Offer
An offer can be defined as a definite promise to be bound if certain terms are accepted. This
can be distinguished from willingness to enter into negotiations, known, in legal terms as
invitation to treat.
An offer can be direct or it can be to the world at large.
Carlill v Carbolic Smokeball Co
Invitation to treat: hasn't been an offer, parties in negotiations
Timothy v Simpson
If a man advertises goods at a certain price, I have a right to go into his shop and
demand the article at the price marked.
No, if you do, he has a right to turn you out.
CAN POTENTIALLY DECLINE THE OFFER
Advertisements
Partridge v Crittenden: Selling birds in a magazine, weren’t offering, open for negotiations.
Goods displayed in a shop - Pharmaceutical Society of Great Britain v Boots Cash
Chemists
Fisher v Bell
Sometimes it is hard to tell the difference between an invitation to treat and an actual offer.
The parties in a commercial contract will be bargaining for an extended period of time, not
always clear when an offer ends and an actual offer materialises. Necessary to look at the
facts of the case:
Harvey v Facey - the parties are still negotiating
Bigg v Boyd Gibbins Ltd - there has been a firm offer and acceptance
Datec electronic Holdings Ltd v United Parcels Service Ltd - just because the word offer
was used doesn't mean it is an actual offer in a legal sense.
Auctions
Payne v Cave - generally speaking a bid is an offer that is accepted by the auctioneer when
he bangs his hammer.
Harris v Nickerson - an advertisement that goods will be sold on a certain date is not
binding.
EXCEPTION - item is sold without reserve.
Barry v Healthcote Ball & Co (Commercial Auctions) Ltd - if an auction is without reserve
this amounts to a collateral contract with the highest bidder.
Key elements of a contract:
Capacity
Agreement - offer and acceptance
Intention
Consideration
Offer
An offer can be defined as a definite promise to be bound if certain terms are accepted. This
can be distinguished from willingness to enter into negotiations, known, in legal terms as
invitation to treat.
An offer can be direct or it can be to the world at large.
Carlill v Carbolic Smokeball Co
Invitation to treat: hasn't been an offer, parties in negotiations
Timothy v Simpson
If a man advertises goods at a certain price, I have a right to go into his shop and
demand the article at the price marked.
No, if you do, he has a right to turn you out.
CAN POTENTIALLY DECLINE THE OFFER
Advertisements
Partridge v Crittenden: Selling birds in a magazine, weren’t offering, open for negotiations.
Goods displayed in a shop - Pharmaceutical Society of Great Britain v Boots Cash
Chemists
Fisher v Bell
Sometimes it is hard to tell the difference between an invitation to treat and an actual offer.
The parties in a commercial contract will be bargaining for an extended period of time, not
always clear when an offer ends and an actual offer materialises. Necessary to look at the
facts of the case:
Harvey v Facey - the parties are still negotiating
Bigg v Boyd Gibbins Ltd - there has been a firm offer and acceptance
Datec electronic Holdings Ltd v United Parcels Service Ltd - just because the word offer
was used doesn't mean it is an actual offer in a legal sense.
Auctions
Payne v Cave - generally speaking a bid is an offer that is accepted by the auctioneer when
he bangs his hammer.
Harris v Nickerson - an advertisement that goods will be sold on a certain date is not
binding.
EXCEPTION - item is sold without reserve.
Barry v Healthcote Ball & Co (Commercial Auctions) Ltd - if an auction is without reserve
this amounts to a collateral contract with the highest bidder.
