Contract Law Problem

Topics: Contract, Offer and acceptance, Invitation to treat Pages: 3 (980 words) Published: April 26, 2014
Contract Law – Formative Assessment

Alex would be suing Betty for a breach of contract. He would only succeed if he’s able to prove that a contract was in place. A contract can be defined as “a written or spoken agreement that is intended to be enforceable by law.” In order for it to be formed, agreement must take place and it can be broken down into two elements. Firstly, an offer. This can be described as an expression of willingness to contract on clear terms, with the intention that it will become a binding contract when it has been accepted. The second is acceptance, which can be defined as the unqualified expression of assent to the terms of an offer. Betty placing an advertisement in the Ealing advertiser for her BMW is clearly an invitation to treat and not an offer. An invitation to treat can be described as “a mere declaration of willingness to enter into negotiations”: Partridge v Crittenden. The purpose of an invitation to treat is to invite offers. By advertising in the paper she is inviting people to make offers for her car. On Monday when Alex makes an offer of £10 000, this can be considered as a counter offer. This is because he is changing the terms of agreement. It’s an offer because as explained the definition above, he intends on forming a binding contract by giving her £10 000 for the car; however it is initially rejected by Betty. When Betty writes a letter to Alex saying that she’ll take £11 000, this is considered a new offer. Any offer that Alex has made or she has made originally is now cancelled. When the letter is received by Alex on Tuesday morning it illustrates that the offer has been communicated however acceptance has not taken place yet. There is no “meeting of minds” which is a stage that is required for a contract to be formed. By Alex writing a letter to Betty saying that he would pay £11 000 for the car, he is accepting her offer, but this still needs to be communicated. As explained in the definition of acceptance...

Bibliography: Books:
Beale, Hugh; Arthur Hartkamp, Hein Kotz, Denis Tallon (2002). Cases, Materials and Texts on Contract Law
Dickinson v Dodds (1876) 2 Ch D 463
Household Fire and Carriage Accident Insurance Company (Limited) v Grant (1878–79) LR 4 Ex D 216
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