Contracts 1 Assignment

Topics: Contract, Offer and acceptance, Contract law Pages: 7 (2071 words) Published: September 13, 2010
Selwyn Selikowitz
Group No: 3613
Advice has been sought as to whether or not Dr. Amber has an enforceable contract with Furniture Comfort, and whether she is entitled by law to buy the couch at the discounted price. In order to address the issue, one needs to start by examining each of the four essential elements for contract formation: agreement, consideration, certainty and an intention to create legal relations.[1]

The newspaper advertisement is not an offer but an invitation to treat. In Boots v Pharmaceutical Society of Great Britain, it was decided that ‘a contract is not completed until, the customer having indicated the articles which he needs, the shopkeeper, or someone on his behalf, accepts that offer.’ The items on the shelf of the ‘self services’ shop were treated as offers to treat. This decision was due to the nature of the shop. It is not only inconvenient but also practically and legally unfeasible to be entered into a contract every time one picks up an item from the shelf. Advertisements are presumed to be invitations to treat due to similar reasoning.

The exception to this presumption can be found in Carlill v Carbolic Smoke Ball, where the advertisement was determined to be an offer as there was an express intention to pay money in the event of certain circumstances occurring. This exception doesn’t apply to the present case. The reasonable person would interpret phrases such as “25% off all selected floor items”, and “We beat all competitors” in Furniture Comfort’s advertisements as not indicating a offer to enter into a contract with all readers, but merely inviting them to make an offer. Thus the newspaper advertisement is an invitation to treat.

Dr Amber saw this ‘invitation to treat’ and responded by visiting Furniture Comfort. Being unhappy with the fabric on the model, she wished to buy a couch with a suitable fabric of her choosing. She made an offer to buy the couch as long as the fabric was one she chose and the couch was sold to her immediately upon her return. This conditional offer is made evident through her words “I assume the sale will still be on”, and “I’ll need it immediately after that.” Now under the main offer she gave an option, a condition to the purchase. An option contract is defined as ‘an agreement for consideration under which a party acquires a right exercisable before a specified time to buy or sell property at a given price from another party.’[2] In Goldsbrough Mort & Co v Quinn, the grantor gave the option holder an option to purchase certain land at a specified price at any time within one week of the agreement in return for the sum of five shillings paid to the grantor. In the present case, the option was Dr Amber’s offer to buy the couch as long as the couch was reserved for her.

In response to Dr. Amber’s offers, Maggie replied “We can do that if you prefer. Let’s go to my office.” Whether or not Maggie’s reply and consequent actions can be construed as an acceptance of the offers depends on whether it satisfies certain rules in contract law regarding acceptance.

(a) The acceptance must be communicated
In Felthouse v Bindley, it was determined that silence cannot be taken to indicate acceptance.[3] Although the acceptance may have been inferred by conduct of the nephew, his intention was not communicated to the uncle, and thus it was found that no acceptance had been made and no contract was formed. In this case Maggie explicitly responded to Dr. Amber’s offer with the words “We can do that if you prefer.” Thus the acceptance was communicated

(b) The acceptance must be absolute and unqualified
The acceptance must be complete, without changing any of the terms. Otherwise, instead of an acceptance it would be a counteroffer. In Butler Machine Tool Co Ltd v Ex-Cell-O Corp this distinction was made clear, in the ‘battle of forms’ involved. ‘Acceptance’ based on changing of...
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