On Sunday, Angela decides to sell her Ford Mundane car and so puts the following notice on the windscreen: For sale - Special Offer
Good condition. One owner. MOT &
Tax. £5,995 o.n.o.
Tel: 07980 123654 or call at:
34 Nosey Street, Bradford
At 10.00 am on Monday, Ian, who is studying his 'A' levels at Brantford College, saw the notice on the car and phoned Angela on her mobile phone. Having confirmed a few details about the car, he makes an offer for £5,600, payable by cheque. Angela told Ian that she will consider his offer, so Ian leaves his work telephone number and address.
On Monday lunchtime, at 1.00 pm., Jennifer rings Angela but her call is diverted to the answer-phone. Jennifer leaves a message saying that she is very interested in buying the car and would like to know if the car has a full-service history and if she could go for a test drive If she likes the car, she is willing to pay the full asking price. Jennifer also leaves her work telephone number and address on the answer-phone. Angela picks this message up half an hour later and decides in her mind that she will accept Jennifer's offer. In the evening at 6.00 pm., Angela writes a letter of acceptance.
On Tuesday morning, Jennifer receives the letter from Angela but has changed her mind and phones Angela to inform her.
Upon hearing from Jennifer, Angela then sits down in the evening at 5.00 pm., to write a letter of acceptance to Ian which states "I accept your offer but can you pay cash? Angela posts the letter immediately.
However, at 4.00 pm. On Tuesday afternoon, Ian writes to Angela stating that he is no longer interested in buying her car.
By the time Angela's letter of acceptance reaches Ian on Wednesday morning, he has already bought another car.
Advise the parties. [70% weighting]
"Whether intention to create legal relations exists or not is always a question of objective construction by the courts of what the parties said, did or wrote." With reference to decided cases, discuss the above statement.[30% weighting]
In order to advise the parties the following issues need to be considered first, what is a contract, what are the elements of that contract and the purpose of this assessment the focus will be upon offer, acceptance and capacity. Last of all whether there are any contracts between the parties.
A contract may be defined as an agreement between two or more parties that is intended to be legally binding or, in the words of Sir Frederick Pollock “a promise or set of promises which the law will enforce”. Whoever breaches the contract can be sued, monetary compensation or be forced to carry out the contract.
Four main elements must be present to form a contract, these are offer, acceptance, consideration and intention to create legal relations.
Other factors that may affect the formation of the contract are capacity, form, consent and legality. If any essential elements are missing then the contract may be void, voidable or unenforceable
An offer is an expression of willingness to contract on certain terms with the intention that it shall become binding on the offeror (person that is making the offer) when it is accepted by the offeree (the person the offer is made to).
However, an offer must be distinguished from an ‘invitation to treat’, which is where a party is merely inviting offers, which they are free to accept or reject .
Formation of a simple contact: OFFER to sell made by A, ACCEPTANCE of A’s offer by B, CONTRACT that is binding.
Formation of invitation to treat contract: INVITATION TO TREAT by A, OFFER to buy made by B, ACCEPTANCE of B’s offer to buy by A, CONTRACT.
In the case of Carlill v Carbolic Smokeball Co it was held to be an offer but it was recognised that there are situations where only an ‘offer to negotiate’ has been made or an ‘offer to receive offers’. These don’t amount to valid...