Tallula Investments

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  • Topic: Contract, Invitation to treat, Carlill v Carbolic Smoke Ball Company
  • Pages : 2 (526 words )
  • Download(s) : 82
  • Published : October 31, 2012
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Below is a model answer based on the previous categories. The green highlighted text shows how the law has been applied to the facts. The yellow highlighted text shows relevant case citations.

The case study deals tih a simple contract, which is not required to be in writing. The elements of a simple contract are:

Intention to create legal relations
Offer and acceptance (an agreement)
Consideration
Capacity of the parties
Certainty of terms
Legality of object

The main issue in this problem is whether there is an 'agreement' - offer and acceptance

However, on the first element of intention to create legal relations, it is clearly a business/commercial relationship between Tallula Investments Ltd and Italian Cuisine Ltd and therefore the presumption is that the parties intend to enter into legal relations. There is no evidence to rebut this presumption (see Jones v Vernon Pools).

The next issue to be dealt with is the 'offer'. Has Italian Cuisine made an offer to Tallula in the fax September 1, 2000 which read:

'Can offer latest speedy Rice Cookers at $100 each'

In my view this is not a genuine offer, it is more in the nature of an invitation to treat. The words 'can offer' is not a definite proposal to sell the cookers at the stated price but is simply suggesting that the Speedy Rice Cookers are available for sale.

The test in deciding between an offer and an invitation to treat was set out in Carlill v Carbolic Smoke Ball Co which held that an 'invitation to treat is a request for offers' and determined by the 'ordinary person test'. Clearly here, we have an inducement sent out by Italian Cuisine to Tallula to enter into negotiations for the purchase of the rice cookers. It is not a definite proposal, made with the intention that it becomes binding once accepted (see Partridge v Crittenden ).

As the fax sent on the 1st September, 2000 by Italian Cuisine is not an offer we now need to consider the position...
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