Applying Certain Rules of Contract Law

This question requires me to analyse the scenario from the perspective of contract law paying particular regard to the rules relating to: invitation to treat, offers, option contracts and acceptance. The scenario involves three distinct cases which should be dealt with in turn in applying the following rules of contract law.

Offer V Invitation to treat

Counter offer

Acceptance / postal rule

Revocation

Consideration

(Define offer) An offer is a definite statement of willingness to bound specific terms without further discussion. A legally binding contract will result, when an offer may, through acceptance by the offeree. Therefore, it is essential to tell the difference what the law will treat, because an offer from additional statements, which wouldn’t form the foundation of an enforceable contract. An offeror is a person who makes the original offer and the person who receives it is the offeree.

The advertisement in the specialist book magazine wasn’t an offer, it was merely an invitation to treat, however it is not an offer to sell but merely an invitation to other people to make offers. The meaning of this is that the individual extending the invitation is not obligated to accept any offers made to them. Applying the case Partridge v Crittenden (1968), were an individual made an advert relating to the sale of birds in a magazine, however he was accused with offering a bird which was wild for sale opposite to the to the Protection of Birds Act 1954. We can see that lee placed an advert to sell the book, and that the advert resulting to nothing more than an invitation to treat and was not an offer. Javid may be advised that there is no binding agreement for the purchase of the book.

A counter offer occurs when the offeree attempts to change the terms of an original offer. Applying the case Hyde v Wrench (1840), were a counter offer was made by Hyde for £950 to buy Wrench’s farm which he offered to sell for £1,000, which he rejected. Hyde said to Wrench that he agreed and accepted the original offer; however there was no contract at the end. Applying the case to the scenario, the first real offer is made by Javid, which he would give Lee £750 for the book. Lee responded by making a counter offer to sell the book for £900 to which Javid restated his original offer, this time in the form of a counter-offer to Lee’s new offer. As a result Javid, by insisting on his offer of £750, cannot at a later time attempt to accept Ali’s offer of £900.

Acceptance / postal rule

Acceptance is the unconditional agreement to all terms and conditions of the contract. Acceptance is needed for the formation of a contract. A contract comes into results, when the offeree has agreed to the terms offered. Both individuals are obligated, the offeree cannot withdraw their acceptance either can the offeror withdraw the offer. Acceptance can be implicated from conduct and may not have to be stated words. However if an individual, doesn’t know about an offer, he cannot accept it. Their reason for accepting it is not essential, but they must know about the offer. Normally acceptance should be communicated to the offeror.

When acceptance is made via the postal service, the acceptance is complete when the letter is correctly addressed and stamped is posted. The contract is done even if the letter afterwards fails to arrive to the offeror. Applying the case Adams v. Lindsell (1818) were the defendants wrote to the plaintiffs that they were offering to sell some wool and asked them to reply in the course of post. However the defendants incorrectly addressed the letter, meaning the plaintiffs did not get the letter. The effect of the wait means that the letter of acceptance was not received until a couple of days by the defendants; they didn’t receive an answer in the time they expected. For this reason the defendant sold the wool to someone else. Evidence of proper posting can be seen in (Re London & Northern Bank, ex parte Jones (1990).

When the offeror withdraws their offer, this is known as revocation. Before acceptance, the offeror may change their mind at anytime. When the offer is accepted it cannot be revoked, however if revoked, the offer cannot be accepted. Applying the case Routledge v Grant (1828), were grant offered to purchase routledge house, which he gave him a period of time to accept the offer, but he withdrew the offer. This is because grant was allowed to revoke the offer at any possible time before acceptance.

We can see that Javid said he will think about getting the book and will get back to lee, which lee gave javid a time period in which to accept the offer, as javid did not provide any consideration to form an option contract, Lee is not bound to wait for him to return and can sell the book to anyone else if he so chooses.

Define consideration – A simple contract must be supported by consideration. Consideration can be understood as the price paid for a promise. (Dunlop v Selfridge). If, however, the promise acts to his detriment, it is immaterial that the promise’s action does not directly benefit the promisor. In the case of unilateral contracts, where the offeror promises something in return for the offeree doing something, the promise only becomes enforceable when the offeree has actually performed the required act.

Apply the case for acceptance

See if the applying is right for revocation

Put consideration into own words and apply with case

Cut words of till its 600