Law notes III
Contract Law
Introduction
a contract is defined as an agreement that the law will enforce, or…
a legally binding agreement between parties where consideration (something for
something) is given and an offer and acceptance takes place. there must be an intention to
create legal relations - it can be expressed (in writing) or it can be by verbal agreement
and/or by implications
all elements must be met…
1. Consideration
2. Intention to create legal relations
3. Agreement - offer & acceptance
can be used for commercial, social and domestic reasons, such as…
land goods marriage
property services
there is a presumption in contract law that domestic and social agreements are not intended to
be legally binding - Balfour v Balfour ; husband promised wife allowance, she demanded it to
continue after their divorce, not legally enforceable
importance of contracts:
protect assets of parties involved
provide specific T&Cs so parties fully understand
legally binding & enforceable so there would be consequences for a breach
Law notes III 1
, bilateral contract: both parties have obligations
unilateral contract: offeror has an obligation, but offeree can choose to or not to act - Carlill v
Carbolic Smoke Ball Co. ; patent medicine advertised if used and still catch flu, company
would offer £100
before any contract is formed, it must be proved that there was an intention to create a
legally binding contract
not every agreement leads to a binding contract
Offer & Acceptance
Offers
an offer (a proposal showing willingness to contract on firm and definite terms) is the starting
point of the contract - it is communicated by the offeror (person who makes the contract) and
the offeree (person to whom the contract is made for) can choose to accept it or not until the
offer ends
Offerors & offerees
anyone can make an offer - an individual, partnership, limited company, or other organisation,
through an employee, agent, or even a notice or machine - Thornton v Shoe Lane Parking ;
offer made by machine on behalf of company, accepted by Thornton when he put money into
the machine
an offer can also be made to an individual, a group of people or simply the world at large
Invitation to treat
the offer must be in definite terms - words/phrases that indicate uncertainty (such as “may be
able to”) make it an invitation*, not an offer - Gibson v Manchester City Council ; council
tenant, council offer said “may be” so it wasn’t an offer, but his application to buy the council
house was
* an invitation to treat - an indication that one person is willing to negotiate a contract with
another, but not yet willing to make a legal offer;
these can be…
Law notes III 2
, advertisements - Partridge v Crittenden ; ad to sell a wild bird that was protected, not
guilty as it was not an offer, only an invitation
goods in a shop window/shelf - Fisher v Bell ; shopkeeper kept flick-knife with price
tag in window which would be an offense to sell, but the display was only an
invitation
goods at an auction - British Car Auctions v Wright ; selling an unfit car at an auction,
but its only an invite as the offer is made by the bidder
Ending an offer
an offer can only be accepted while it is open - once the offer has ended, it can no longer be
accepted and form a contract
to come into existence, the offer must be communicated to the offeree - Taylor v Laird ; ship
owner not aware of worker, not obliged to pay his wages as offer was never communicated
an offer can end due to various circumstances…
1. revocation: withdrawal by offeror ; Routledge v Grant; house sale offer valid 6 weeks,
offeror withdrew before 6 week mark but revocation still valid
2. rejection: saying no or proposing a counter offer ends the offer, offeree can no longer
change their mind - Hyde v Wrench ; wrench offered sale for 1000, hyde counter offer
950, tried to go back to 1000 but couldn’t (rejection from one offeree does not end
offer for other offerees)
3. lapse of time: fixed period of time, time runs out offer automatically expires -
Ramsgate Victoria Hotel v Montefiore ; offer to buy shares made in june, hotel
accepted in november, long delay meant time lapsed and offer could no longer be
accepted
4. death: death of either offeror or offeree
5. acceptance: once accepted, it becomes a legally binding contract
Acceptance
the final and unconditional agreement to all the terms of the offer - must be positive and
unqualified, with no “but”s as that would be a counter offer
Law notes III 3
Contract Law
Introduction
a contract is defined as an agreement that the law will enforce, or…
a legally binding agreement between parties where consideration (something for
something) is given and an offer and acceptance takes place. there must be an intention to
create legal relations - it can be expressed (in writing) or it can be by verbal agreement
and/or by implications
all elements must be met…
1. Consideration
2. Intention to create legal relations
3. Agreement - offer & acceptance
can be used for commercial, social and domestic reasons, such as…
land goods marriage
property services
there is a presumption in contract law that domestic and social agreements are not intended to
be legally binding - Balfour v Balfour ; husband promised wife allowance, she demanded it to
continue after their divorce, not legally enforceable
importance of contracts:
protect assets of parties involved
provide specific T&Cs so parties fully understand
legally binding & enforceable so there would be consequences for a breach
Law notes III 1
, bilateral contract: both parties have obligations
unilateral contract: offeror has an obligation, but offeree can choose to or not to act - Carlill v
Carbolic Smoke Ball Co. ; patent medicine advertised if used and still catch flu, company
would offer £100
before any contract is formed, it must be proved that there was an intention to create a
legally binding contract
not every agreement leads to a binding contract
Offer & Acceptance
Offers
an offer (a proposal showing willingness to contract on firm and definite terms) is the starting
point of the contract - it is communicated by the offeror (person who makes the contract) and
the offeree (person to whom the contract is made for) can choose to accept it or not until the
offer ends
Offerors & offerees
anyone can make an offer - an individual, partnership, limited company, or other organisation,
through an employee, agent, or even a notice or machine - Thornton v Shoe Lane Parking ;
offer made by machine on behalf of company, accepted by Thornton when he put money into
the machine
an offer can also be made to an individual, a group of people or simply the world at large
Invitation to treat
the offer must be in definite terms - words/phrases that indicate uncertainty (such as “may be
able to”) make it an invitation*, not an offer - Gibson v Manchester City Council ; council
tenant, council offer said “may be” so it wasn’t an offer, but his application to buy the council
house was
* an invitation to treat - an indication that one person is willing to negotiate a contract with
another, but not yet willing to make a legal offer;
these can be…
Law notes III 2
, advertisements - Partridge v Crittenden ; ad to sell a wild bird that was protected, not
guilty as it was not an offer, only an invitation
goods in a shop window/shelf - Fisher v Bell ; shopkeeper kept flick-knife with price
tag in window which would be an offense to sell, but the display was only an
invitation
goods at an auction - British Car Auctions v Wright ; selling an unfit car at an auction,
but its only an invite as the offer is made by the bidder
Ending an offer
an offer can only be accepted while it is open - once the offer has ended, it can no longer be
accepted and form a contract
to come into existence, the offer must be communicated to the offeree - Taylor v Laird ; ship
owner not aware of worker, not obliged to pay his wages as offer was never communicated
an offer can end due to various circumstances…
1. revocation: withdrawal by offeror ; Routledge v Grant; house sale offer valid 6 weeks,
offeror withdrew before 6 week mark but revocation still valid
2. rejection: saying no or proposing a counter offer ends the offer, offeree can no longer
change their mind - Hyde v Wrench ; wrench offered sale for 1000, hyde counter offer
950, tried to go back to 1000 but couldn’t (rejection from one offeree does not end
offer for other offerees)
3. lapse of time: fixed period of time, time runs out offer automatically expires -
Ramsgate Victoria Hotel v Montefiore ; offer to buy shares made in june, hotel
accepted in november, long delay meant time lapsed and offer could no longer be
accepted
4. death: death of either offeror or offeree
5. acceptance: once accepted, it becomes a legally binding contract
Acceptance
the final and unconditional agreement to all the terms of the offer - must be positive and
unqualified, with no “but”s as that would be a counter offer
Law notes III 3
