arguments for 'invitation to treat and an offer

Topics: Contract, Offer and acceptance, Option contract Pages: 4 (1099 words) Published: January 15, 2014

CONTRACT LAW ASSESSMENT LA3085

The English Law on the formation of contracts generally requires there to be an offer and a matching acceptance. The offer must set out and refer to the object for sale and all the important terms of the contract. The acceptance must indicate agreement to all the terms of contract. If it does not do so, the acceptance will be regarded as a counter-offer which is capable of rejecting the original offer, thereby making it incapable of acceptance later (Hyde v Wrench (1840) CC 49 ER 132). There are two offers, the one made by Susan through the advertisement on the 1st of March and that of Alice in response to the initial offer on the 27th of March that amounted to a counter-offer. There is also the issue of the application of the postal rule and its limitations in the case of Tahir, the issue of instantaneous communications and when the revocation of an offer becomes effective in the case of Emma and its rules. In Tahir’s case, the letter and enclosed Cheque he sent on the 27th of March would have been the most preferable choice of acceptance because the general postal rule would have applied easily which allows the effectiveness of a posted acceptance to start right from when it was posted, so as to enhance the effectiveness of businesses, if they can start working farther on the assumption that there is a binding contract between both parties as in Adams v Lindsell (1818). But, the fact that Susan defined the terms of the contract by stating the modes of acceptance and payment that was acceptable, which does not include a letter or a cheque makes the postal rule ineffective on Tahir’s letter, as it is unacceptable. Although, sending a letter as a form of acceptance was reasonable; there is no binding contract between Susan and Tahir because of the definition of...


References: 1. Richard Stone, Contract Law (Routledge Q&As, 2011-2012) 7, 8, 12, 20.
2. Holwell Securities Ltd v Hughes (1974) AC 1 WLR 155, (1973) 26 P& CR 544.
3. Entores Ltd v Miles Far East Corporation (1955) AC 2 QB 327, (1955) 3 WLR 48.
4. Hyde v Wrench (1840) CC 49 ER 132.
5. Payne v Cave (1789) KB 100 ER 502.
6. Adams v Lindsell (1818) KB 106 ER 250.
7. Byrne v Van Tienhoven & Co (1880) 5 CPD 344.
8. Routledge v Grant (1828) 172 ER 415.
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