1 Task – 1
1.1 Importance of Essential Elements of Contract
Contract represents the instrument to enforce promises. Not all statements amount to enforceable promises or contracts. To enforce statements there are a number of elements which courts look for and these mainly include the presence of offer, its communication, its unconditional acceptance and communication of the acceptance. Once this has taken place then the element of consideration gives the badge of enforceability to the contract and the contract is then enforceable.
Offer is the serious expression of willingness which is made with the intention that it will become binding upon acceptance (Storer v Manchester City Council). However, not all statements made are offer. Statements which are not offer are called invitation to treat. An invitation to treat is the expression of willingness to hear from the other party which may or may not lead to a contract (Gibson v Manchester City Council). It is the seriousness of the term which matters and seriousness is reflected from the price which one states would be acceptable to him along with other terms.
For example, in Storer, the Council had sent the form to Storer along with price and all that was required on part of Storer was to sign it which he did. The Court held that the seriousness was evident from the price. However, in Gibson, the Council had sent Gibson a form but on the form it was written that the “Council may be prepared to sell”. The Court held that these words lacked seriousness therefore no contract arose between parties.
There are a number of instances whereby the statements made, said or written does not amount to offer but an invitation to treat. These include: display of goods (Fisher v Bell; Pharmaceutical Society of Great Britain v Boots), advertisements (Partridge v Crittenden), request for tenders (Harvela Investments ltd v Royal Trust Co of Canada ltd), auctioneer’s request for bids (Warlow v Harrison; Barry v Davies).
For example, a can of Coca Cola displayed in a shop refrigerator does not amount to offer, it amounts to invitation to treat and the price on it is merely indicatory, the offer is made by the customer which the shopkeeper can reject or accept. This is the effect of decision held in Pharmaceutical Society of Great Britain v Boots. Moreover, if someone has advertised sale on chicken meat then this does not amount to offer because he would be bound in numberless contracts which he may not fulfil that is why advertisements amount to invitation to treat. This is the effect of decision in Partridge v Crittenden.
However, if the advertisement is made to world at large and contains the reward promise contingent upon fulfilment of a particular act then as soon as that act is done the contract is formed (Carlill v Carbolic Smoke Ball Co). In Carlill, the reward was offered to anyone who would catch influenza after using the company’s smoke balls as it was claimed that no one could catch influenza after consuming those smoke balls. However, the plaintiff did catch and the defendant argued that the advertisements are only invitation to treat. But the Court held otherwise due to reward being offered. The court declared it an instance of unilateral offer.
For an offer to be valid it must be communicated to the offeree and must be unconditionally accepted by him. Communication of the offer is complete when it comes to the attention of the offeree (R v Clarke). If the offer has not come to his attention and he did the act required under offer then no acceptance is made because there can be no acceptance in ignorance of the offer (R v Clarke). Acceptance to the offer must be unconditional and can be by words or by conduct (Brodgen v Metropolitan Railway Company). However, if the offeree tends to add any term to the offer then it is called counter offer which revokes the offer (Hyde v Wrench). But inquiring about the content of the offer is not counter offer and the...
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