Formation of contract
A contract: 'a legally binding agreement between two parties for which something of value is given'
For a simple contract there must be a genuine offer by one person and an unqualified acceptance by the party to whom the offer is made
Offeror = person making the offer
Offeree = person receiving the offer
For example, Ryan wishes to sell his car and tells leanne that his car is for sale to her for £1000. Ryan is the offeror and leanne is the offeree, the next step is acceptance of the offer. A valid acceptance by leanne will legally bind him to the terms of the offer which will lead to the creation of a binding contract
Bilateral contracts = both parties to the agreement have obligations to perform – offeror give car, offeree give money
The offer: 'a statement of terms on which the offeror is willing to be bound'
The offer can be:
express = written/spoken
implied by conduct = waiting at a bus stop (offer) bus pulling in (acceptance)
specific = made to a particular person or body
general = may be accepted by anyone (rewards cases)
An offer must be distinguished from an invitation to treat (ITT) which is not an offer but an invitation for the other party to make an offer.
Display of goods in a shop window – Fisher v Bell 'offering flick knife' court held flick knife in shop window was not an offer but an ITT
Supermarket shelves – PSGB v Boots accused boots of selling goods without supervision of a pharmacist court held goods on shelves were ITT the customers made the offer by taking to till where a pharmacist was present
Adverts/catalogues – Partridge v Crittenden charged with unlawfully offering for sale a wild live bird court held advert was a ITT not an offer
A person responding to any of these is at most making an offer, which a shop or advertiser is free to accept or reject.
C/W unilateral contracts e.g. rewards cases
Carlill v Carbolic Smoke ball Co.
Held: it was a genuine offer as money was deposited and the advert contained influential people testifying that the product worked. Secondly a general offer can be made in rewards cases (unilateral contracts) as the only contract that is made is with the person that does something.
A person responding to a general offer (unilateral contract) and performing…