Law on Offer and Acceptance

The assignment explores the concept of offer and acceptance in law, examining key cases such as Carlill v Carlill Smoke Ball Co. and Merritt v Merritt. It applies these principles to a scenario involving Simon and his father, analyzing whether they had an intention to create a legal relationship and whether their agreement constitutes a contract.

Running head: BUSINESS LAW ASSIGNMENT
Law on offer and acceptance
Name of the student:
Name of the university:
Author note

1BUSINESS LAW ASSIGNMENT
Table of Contents
Answer to question (a):..............................................................................................................2
Issue:.......................................................................................................................................2
Rules:......................................................................................................................................2
Application:............................................................................................................................3
Conclusion:.............................................................................................................................3
Answer to question (b):..............................................................................................................3
Issue:.......................................................................................................................................3
Rules:......................................................................................................................................3
Application:............................................................................................................................4
Conclusion:.............................................................................................................................5
Reference:..................................................................................................................................6

2BUSINESS LAW ASSIGNMENT
Answer to question (a):
Issue:
Considering the case study, it can be stated that the legal issue present in the case is
whether the agreement made between Simon and his father is based on the general principle
of offer and acceptance or not.
Rules:
In case of any contract, the nature of the agreement should be legal and the terms
and conditions of the contract should follow the legal principles (O'Sullivan, & Hilliard,
2016). This is the general principle of law. There are two parties conduct the agreement; the
first party makes an offer to the other party and the other party needs to accept the offer after
considering the facts and terms of the offer. When the offer is accepted, it becomes contract.
One of the leading cases on offer and acceptance is Carlill v Carlill Smoke Ball Co. [1893] 1
QB 256 where it has been decided by the court that in case of unilateral contract, it is not
mandatory to accept an offer. On the other hand, it has been held in Harvey v Facey [1893]
AC 552 that if the parties have no intention to create legal relationship, there shall be no
contract taken place between them. However, in case of any domestic contract made between
two members of the same family, intention to create legal relation is mandatory and a mere
promise could not lead towards a contractual relationship (Spitko, 2016). In the words of
Treitel, offer expresses the willingness of a party to make a contract on certain conditions
with another person and the terms of the contract will be binding on both the parties if the
other person accepts the contractual terms. Offer can be made in various forms such as by
verbal submission or by different medium like letter, newspaper, advertisement and email. In
Smith v Hughes (1871) LR 6 QB 597, learned court has held that the intensity of legal
relation does not depend only on the subjective intentions of the parties, but on the reasonable

3BUSINESS LAW ASSIGNMENT
grounds of such intentions too (Fried, 2015). The principle of acceptance is based on the
meeting of the mind theory. However, in Felthouse v Bindley [1862] 142 ER 1037, it has
been observed that the acceptance must be communicated. However, an exception to this rule
has been observed in the case of Carlill v Carlill Smoke Ball Co.
Application:
It has been learnt from the present case that Simon’s father has offered him to pay
a sum of $200 on the conditions that Simon has to mow the front and back yards of their
property. It has also been learnt that Simon has started to mow the property which resembles
his acceptance of the offer. Therefore, it can be stated that both the parties wanted to create
legal relationship with each other and contract has been formed in between them. The nature
of the contract is unilateral where an offer can be accepted by way of performance.
Conclusion:
It can therefore be advised to Simon that an agreement is existed in between Simon
and his father on the basis of offer and acceptance.
Answer to question (b):
Issue:
The main issue regarding the second part of the case study is that whether the
parties have any intention to create legal relationship or not.
Rules:
It is a general principle of Law on Contract that the parties should have an intention
to create legal relationship with each other. A mere promise could not be held enough to
make a legal relationship with each other. It was held in Balfour v Balfour [1919] 2 KB 571
that there was no intention of both the spouses to create legal relationship and the payment

4BUSINESS LAW ASSIGNMENT
that fixed by the husband was an outcome of mere promise (Ibrahim, Ghadas, & Musa,
2015). According to Duke LJ, no agreement for separation has been made in between the
parties and the nature of the agreement is based on mutual promise. Therefore, no contract
has been made between them and neither party are bound by the conditions of the promise. In
Jones v Padavatton [1968] EWCA Civ 4, it has been observed by the court that unless there
is any clear intention made in between the parties, the nature of the agreement could not be
binding upon the parties (Burrows, 2015). Another important case on domestic contract is
Merritt v Merritt [1970] EWCA Civ 6. The case has given concentration over the legal
relationship between the parties (Oniyinde, 2017). It has been held that this case is quite
different from the Balfour v Balfour. In this case, it has been observed the husband had given
a written chit to his wife that if she pays off the mortgage money for the house, he will
transfer the house to her. However, after completing the mortgage money, the husband
refused to transfer the house. The Court had found the merit of the case in favour of the wife
by stating that husband wanted to create legal relations with his wife by transferring the
house in her name. The nature of the contract is called unilateral when there is no need to
accept the offer expressly and acceptance can be made by mere performance of the proposed
offer. Carlill Smoke Ball’s case is regarded as one of the most prominent case on unilateral
contract.
Application:
In the present case, it has been observed that Simon’s father approached him to pay
a sum of $200 in the form of allowance when Simon was in need of money and put a
condition that Simon is required to mow the front and backyard of his ancestral property.
Simon had accepted the offer and started to work on it. It is a general principle of law that an
offer cannot be revoked once it has been accepted. Further, according to German
jurist Friedrich Carl von Savigny, legal intention is closely relate to the “will theory” (Fried,

5BUSINESS LAW ASSIGNMENT
2015). It is quite clear from the case study that both the parties have a clear will to make a
contract over the topic. Therefore, contract has been made in between them as per the
judgment made in Merritt’s case.
Conclusion:
The parties had an intention to create legal relation.

6BUSINESS LAW ASSIGNMENT
Reference:
Burrows, A. (Ed.). (2015). Principles of the English Law of Obligations. Oxford University
Press, USA.
Fried, C. (2015). Contract as promise: A theory of contractual obligation. Oxford University
Press, USA.
Fried, C. (2015). Contract as promise: A theory of contractual obligation. Oxford University
Press, USA. Fried, C. (2015). Contract as promise: A theory of contractual
obligation. Oxford University Press, USA.
Ibrahim, N., Ghadas, Z. A. A., & Musa, M. K. (2015). " Domestic Contracts" The Effect of
Family Contracts; The Malaysian Law Perspectives. Journal of Management
Research, 7(2), 387.
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press
(UK).
Oniyinde, O. A. (2017). Legal Reasoning in the Enforceability of Domestic Contracts in
Law: A Legal Appraisal. JL Pol'y & Globalization, 63, 125.
O'Sullivan, J., & Hilliard, J. (2016). The law of contract. Oxford University Press.
Spitko, E. G. (2016). The Will as an Implied Unilateral Arbitration Contract. Fla. L. Rev., 68,
49.