Contract Law
Issue
“The mere existence of the core elements of offer, acceptance, and consideration will not guarantee a legally enforceable contract”. Discuss.
A contract is an agreement which normally consists of an 'offer ' and an 'acceptance ' and involves the 'meeting of the minds ' or consensus between two or more parties with the intention to create a legally enforceable binding contract. Therefore in this essay, the four core elements needed for the formation of a contract such as offer, acceptance, and consideration and intention to create legal relations will be discussed briefly.
Offer
An offer is a proposal whereby the parties are willing to contract on a specific set of terms, made by the offeror with the intention that, if the offer is accepted, the parties will be bound by a contract. An offer may be made to an individual, group, or even to the world at large as seen in the case of Carlill v. Carbolic Smoke Ball Co. [1893].
However, offer is distinguished from an invitation to treat which is not an offer but an offer to consider offers. Acceptance of an invitation to treat does not lead to a contract and therefore in Pharmaceutical Society of Great Britain v. Boots cash Chemists (Southern) Ltd [1953], the defendant had made an invitation to treat by having his goods display on the shelves and this is not an offer. When the customer picks up goods from the shelf, to the cash register, he makes an offer to buy the goods. Only when the casher accepts the offer by taking the payment from the customer is when a contract is formed. Offers may be terminated in a number of ways such as Revocation, Rejection, Lapse of time, Failure of a condition or Death.
Acceptance
An acceptance converts promise by offeror into an agreement in either oral or writing which must exactly reflect the original offer made. The offeree must intend to accept the offer, else no agreement is made by parties. To be effective, acceptance must be communicated. A mental decision to
“The mere existence of the core elements of offer, acceptance, and consideration will not guarantee a legally enforceable contract”. Discuss.
A contract is an agreement which normally consists of an 'offer ' and an 'acceptance ' and involves the 'meeting of the minds ' or consensus between two or more parties with the intention to create a legally enforceable binding contract. Therefore in this essay, the four core elements needed for the formation of a contract such as offer, acceptance, and consideration and intention to create legal relations will be discussed briefly.
Offer
An offer is a proposal whereby the parties are willing to contract on a specific set of terms, made by the offeror with the intention that, if the offer is accepted, the parties will be bound by a contract. An offer may be made to an individual, group, or even to the world at large as seen in the case of Carlill v. Carbolic Smoke Ball Co. [1893].
However, offer is distinguished from an invitation to treat which is not an offer but an offer to consider offers. Acceptance of an invitation to treat does not lead to a contract and therefore in Pharmaceutical Society of Great Britain v. Boots cash Chemists (Southern) Ltd [1953], the defendant had made an invitation to treat by having his goods display on the shelves and this is not an offer. When the customer picks up goods from the shelf, to the cash register, he makes an offer to buy the goods. Only when the casher accepts the offer by taking the payment from the customer is when a contract is formed. Offers may be terminated in a number of ways such as Revocation, Rejection, Lapse of time, Failure of a condition or Death.
Acceptance
An acceptance converts promise by offeror into an agreement in either oral or writing which must exactly reflect the original offer made. The offeree must intend to accept the offer, else no agreement is made by parties. To be effective, acceptance must be communicated. A mental decision to
References: Andy Gibson and Douglas Fraser, 2007, Business Law. Australia: Pearson Education Australia [online], http://www.australiancontractlaw.com/law/formation-agreement.html [10 February 2010] [online], http://www.australiancontractlaw.com/law/formation-consideration.html [14 February 2010] [online], http://www.australiancontractlaw.com/law/formation-intention.html [16 February 2010] [online], http://www.australiancontractlaw.com/law/formation-capacity.html [20 February 2010] [online], http://www.australiancontractlaw.com/law/avoidance.html [25 February 2010]