Common law outlines some elements

Running Head: 0
Business Law
BLO1105
1/15/2020
Student’s Name

“BLO1105” 1
Contents
Part A...............................................................................................................................................2
Issue.............................................................................................................................................2
Rules.............................................................................................................................................2
Application...................................................................................................................................4
Conclusion...................................................................................................................................5
Part B...............................................................................................................................................5
Issue (a)........................................................................................................................................5
Rules (a).......................................................................................................................................5
Application (a).............................................................................................................................6
Conclusion (a)..............................................................................................................................7
Issue (b)........................................................................................................................................7
Rules (b).......................................................................................................................................7
Application (b).............................................................................................................................8
Conclusion (b)..............................................................................................................................8
Bibliography....................................................................................................................................9
Books/Journals.............................................................................................................................9
Cases............................................................................................................................................9
Other Resources...........................................................................................................................9

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Part A
Issue
How a contract was entered into by “John” with “Span and Spic”?
Rules
A contract establishes and confirms the rights and duties of parties as soon as it is formed hence
while claiming anything out of the parties of a transaction are required to check the event when a
contract is developed between them. Common law outlines some elements that are necessary to
exist in every contract and known as the essentials of a contract. In case of the absence of any
such element, a contract cannot be assumed to be there. The primary element is known as "offer"
which is a proposal from one party to another for doing certain things/act or refrain from doing
so. The person who makes such a proposal is called as offeror under contract law and the other
party who receive such a proposal is known as offeree. An offer can only be held valid when the
same intention to be bound on the part of the offeror. If no such intention reflects under a
communication then the same is considered as "invitation to treat" which is a different aspect of
contract law. Unlike an offer, an invitation to treat does not have an intention to bind anyone but
the same is only a call to receive offers in reply. There is a very narrow line between an offer and
an invitation to treat and therefore the difference between these two terms is required to be clear.
The major difference between these two terms is that only an offer can be accepted not the
second element. In various cases, courts have identified some of the communications that should
be treated as invitations to treat. “Pharmaceutical Society of Great Britain v Boots”1 is one such
case where it was given that the goods that are shown in the shop are an invitation to treat and
not the offer2. In such cases, an offer comes into existence when the customer communicates his
1 Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401
2 James Marson, Business Law (OUP Oxford, 2013) 122.

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willingness to buy those goods or to avail services mentioned on the board, to the shop keeper.
Partridge v Critenden3 is another such case where the court given that the advertisements should
also be considered as an invitation to treat4.
Another element of a contract is consent, which is an acceptance of the offer made by the
offeror. Such consent must be granted by offeree and should be informed to the offeror.
Nevertheless, in the case of Brogden v Metropolitan Railway Co.5, it was provided that in some
of the cases, acceptance can be provided through conduct and parties are not needed to exchange
any words. Another rule associated with the validity of acceptance says that consent is required
to be clear as well as unambiguous. Another condition associated with consent is that the same
should be granted without altering any term mentioned in the offer. It means the consent should
be absolute and for the original terms of the offer. If offeree give consent to offer by making
changes into the original offer then this communication is termed as counter offer.
Similar to counter offer, another term is there is known as request for information. Many times,
the offeree needs some further clarification about the terms mentioned in offer and therefore
makes some queries about the same to offeror. This is known as request for information and does
not cancel the previous offer.
The third element of a valid contract is a consideration that is a price that both parties agree to
pay each other. A consideration motivates persons to enter into a contract. Anything can be a
consideration that has a value in the opinion of the law. As decided in the case of Woolworths
Ltd v Kelly6 (1991) 22 NSWLR 189, a peppercorn can also amount to a valid consideration if the
3 Partridge v Critenden (1968) 2 All ER 425
4 Richard Taylor and Damian Taylor, Contract Law Directions (Oxford University Press, 2015), 25.
5 Brogden v Metropolitan Railway Co. (1887) 2 App Ca 666
6 Woolworths Ltd v Kelly (1991) 22 NSWLR 189