Principles of Liability

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  • Topic: Contract, Meeting of the minds, Offer and acceptance
  • Pages : 3 (852 words )
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  • Published : May 14, 2012
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Principles of Liability – Coursework

Assessment Two

For a contractual agreement to withstand, it is crucial that the contract contains the four main components, which are; offer, acceptance, consideration and the intention to create legal relations. A contract is seen as a legally binding agreement between two parties, so It is very important for the court to establish a ‘consensus ad idem’; the meeting of minds in order to judge whether a contract exists.

Britney’s first meeting with Kelly was simply an enquiry and purely for information. According to Stevenson v McLean [1880] 5 QBD 346 a mere enquiry does not result in a contract being formed. Therefore at this point there is no legal agreement between Kelly and Britney.

Sarah’s email of a reduced offer of £11,000 is a counter-offer and ‛kills’ Kelly’s original offer of £12,000. A counter-offer is where the offeree rejects the original offer by introducing new terms therefore becoming a new offer and is capable of being accepted or rejected. The new offer destroys the initial offer and subsequently cannot be accepted by the offeree, seen in Hyde v Wrench [1840] 49 ER 132. However, if Kelly had accepted Sarah’s new offer by email then according to the postal rule acceptance takes place once it has been communicated; Adams v Lindsell [1818] 106 ER 250, therefore when Sarah will open and read the email; Entores v Miles Far East Corporation [1955] 2 QB 327, but in this instance this is not the case, consequently a contract has not been formed between Kelly and Sarah.

Agreements of a domestic nature are presumed not to be intended to be legally binding, seen in Jones v Paddavatton [1969] 2 All ER 616. If we presume that Sarah and Kelly are living together in one household any agreement they enter into will be presumed not to be intended to be legally bound since they are mother and daughter. However; where a family also shares a business relationship intention to create legal relations will...
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