Agreement is an important aspect in the
Agreement is an important aspect in the formation of a contract.
A contract is a legally binding agreement between 2 parties. A contractual agreement is said to exist when a valid offer is followed by a valid acceptance.
• Sometimes people will negotiate to try to gain something different from what is first offered.
This may make it difficult to know exactly when a contract is formed and when legal obligations begin.
Components necessary for contract formation • 1. An OFFER- a promise to be bound on specific terms
•
• 2. An ACCEPTANCE- an unqualified agreement to those terms •
• 3. CONSIDERATION- which means that both sides are bound to give something to each other
•
• 4. INTENTION- to be legally bound by terms of the agreement A person making an offer is called an offeror.
The person to whom the offer is made is the offeree. • If the offer is plainly stated there is no problem as the offer can be identified. The problem arises when the first step is an entirely passive state and is not therefore open to acceptance e.g. a product sitting on a supermarket shelf.
Invitation to treat
• This is not an offer by the supermarket but an invitation to treat (an invitation to the other party to make an offer- usually to buy). The customer would be the offeror in this situation and offers to buy the product at a price and the supermarket would be the offeree, who can choose whether to accept or refuse the customer's offer. The contract would be formed when the customer's payment is accepted and there is an agreement to sell.
Examples of invitation to treat
• 1. Goods on shelves in a self-service shop,
• as seen in Pharmaceutical Society of Great
Britain v Boots Cash Chemists Ltd (1953)
• 2. Goods on display in a shop window, as seen in Fisher v Bell (1961)
• 3. Goods or services advertised in a newspaper or magazine, as per Partridge v
Crittenden (1968)
• 4. Lots at an Auction, as per British Car
Auctions v Wright (1972)
• There was no offer to sell at
A contract is a legally binding agreement between 2 parties. A contractual agreement is said to exist when a valid offer is followed by a valid acceptance.
• Sometimes people will negotiate to try to gain something different from what is first offered.
This may make it difficult to know exactly when a contract is formed and when legal obligations begin.
Components necessary for contract formation • 1. An OFFER- a promise to be bound on specific terms
•
• 2. An ACCEPTANCE- an unqualified agreement to those terms •
• 3. CONSIDERATION- which means that both sides are bound to give something to each other
•
• 4. INTENTION- to be legally bound by terms of the agreement A person making an offer is called an offeror.
The person to whom the offer is made is the offeree. • If the offer is plainly stated there is no problem as the offer can be identified. The problem arises when the first step is an entirely passive state and is not therefore open to acceptance e.g. a product sitting on a supermarket shelf.
Invitation to treat
• This is not an offer by the supermarket but an invitation to treat (an invitation to the other party to make an offer- usually to buy). The customer would be the offeror in this situation and offers to buy the product at a price and the supermarket would be the offeree, who can choose whether to accept or refuse the customer's offer. The contract would be formed when the customer's payment is accepted and there is an agreement to sell.
Examples of invitation to treat
• 1. Goods on shelves in a self-service shop,
• as seen in Pharmaceutical Society of Great
Britain v Boots Cash Chemists Ltd (1953)
• 2. Goods on display in a shop window, as seen in Fisher v Bell (1961)
• 3. Goods or services advertised in a newspaper or magazine, as per Partridge v
Crittenden (1968)
• 4. Lots at an Auction, as per British Car
Auctions v Wright (1972)
• There was no offer to sell at