Offers and Invitation to Treat

As a basic human activity interchange goods and services between human, have been continued trough human being. The basic of trade and shopping depend on basic transactions and people agreed on the basic principles in their interchange, which was mainly depended on promises between people. However, in our contemporary age volumes of trade have expanded, therefore firms and merchants needed binding and compulsory authorises to make sure their transactions. Even in a small shop we act as that types of authorises with their procedures. Offers and invitation to treat are the primary examples of transactions and they have certain procedures to secure interchange between people. This essay will focus on some human rights in the contract law. However, in order to understand briefly about law of contract we start with to comprehend binding contract.

PRINCIPLES OF A CONTRACT

At the beginning, we need to comprehend what the contract law is. A contract is an enforceable agreement by law which legally bind the parties. In order to create a contract it does not need to be written. Therefore, a contract can be made between parties either orally or in writing. Legally binding contract means that one party can sue through the courts to the other party. We make countless contracts over the time. For instance, when we buy something or even we have our hair cat. These are some of the example of legally binding without documents.

It must be four elements in order to existence a contract :

1. Offer
2. Acceptance
3. Consideration
4. Agreement

OFFER AND INVITATION TO TREAT

If a person makes any offer to somebody it is called an offeror. If a person accepts the offer, binding contract comes into exist.

However, an invitation to treat has quite different meaning. It is inviting people into making an offer. An advertisement or a promotion, display of goods, tenders and auctions are the example of invitation to treat.

“Displays of goods with price tags are also usually invitations to treat”. (Fisher V Bell [1961] 1 Q.B 394)

A counter offer brokes the original offer and makes a new offer (Hyde v wrench 1840)

A request for information is not a counter offer (Stevenson v mclean 1880)

ACCEPTANCE

Acceptance can be made in writing or in words. In order to exist a contract, offer must be accepted. Both parties should be agree the terms and conditions. Silence is not acceptance of an offer. The case for this is (felthouse v bindley 1862) .

CONSIDERATION

Consideration is existed when both parties agree to exchange certain goods or money. In the contract, each person gives up something. The definition is expressed in Currie v Misa (1875). There are three types of consideration. These are executory, past and executed consideration. Executed appears when somebody buys a goods and pays for that goods.

QUESTION 1

ALVIN and BERT :

In this situation, Alvin has mispresentation. A mispresentation renders the contract voidable. Basically, Alvin does not make an offer, he makes invitation to treat ( Fisher V Bell 1961). Because advertisements are invitation to treat. Alvin told to Bert that it was mistake and Bert asked for lower price.

In this situation, Bert cannot sue Alvin because there is no binding contract between Alvin and Bert. Because in order to be binding contract there must be acceptance and Alvin did not accept Bert`s offer. Basically, Bert makes counter offer asking lower price. It is up to Alvin to decide whether or not to accept (Fisher V Bell 1961,CA). Alvin can reject the offer and he did. Hence, there is no consideration between Alvin and Bert.

ALVIN and CAT :

In cat`s situation, there is lapse of time. Because, if an offer does not accepted within any specific time limit, offer will not exist. So Cat did not accept unconditionally as she says if she gets money she would buy. Acceptance must be unconditionally. In addition, Alvin did not promise to Cat. For this reason, Alvin can sell the car to anybody. Cat did not do any consideration in return (Routledge V Grant). There is no guarantee that Cat will buy the car. Cat did not promise anything in return. For this reason there is no contract to keep the offer open. If Alvin would wait without taking any money it would be Alvin`s lost by time and perhaps money.

ALVIN and DEL :

In this situation, there is legally binding contract between Alvin and Del as Del makes an offer by giving £25,000 cash and Alvin is accepting Del`s offer by selling him that car. There is consideration between Alvin and Del. Because Alvin is losing car and getting money while Del is losing money getting car. The case for this is (currie v misa 1875).

QUESTION 2

AL and BASH CARS PLC :

“Al placed an advertisement in magazine stating that he would supply filters at £60 per filter, but would consider a reduction in the price for substantial orders.”

In this situation, Al makes invitation to treat placing advertisement on the magazine as the advertisement is invitation to treat. This is stated in this case (Partridge and Crittenden 1968). When Bash Cars plc send a request letter to Al, Bash Cars plc does not make offer or counter offer as requesting an information is not a counter offer (Stevenson v mclean 1880).

When Al reply to Bash cars plc`s request letter, Al makes an offer to supply the filter to bash car plc for £50 each. When bash cars plc replied to Al`s letter stating that they accepted his offer but they would only pay £45 per filter the counter offer occurs. Bash car plc makes counter offer to Al by rejecting the original price and he makes a new offer asking lower price than original price.

The fact that Director of bash cars plc did not read the letter properly. If director would read the letter properly he would have discovered that the price was £50. Clearly, Al did not accept Bash`s counter offer. So in this situation, Bash cars plc is wrong because it is their responsibility to read properly the letter. And there is legally binding contract between Al and Bash cars plc. My advice to this situation is that Al should ask the rest of money. Because in postal rule acceptance comes into exist when the letter is sent (Adam v Linsell 1818). Also, Barsh cars plc received the letter and his fault was reading fault the letter. Al can either ask the rest of money or any value of the something. Al should claim £500 because first he said that £50 each and Barsh wanted 1,000 filters from Al.