Introduction to The Commercial Law

COMMERCIAL LAW

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Introduction
Contract is generally understood as a promise that has been made by one side or one party to
another to pay the amount or something in exchange of the task or material which the other
party will provide as signed under the contract. In the creation of any contract there are
certain elements presents. These elements are capacity to contract, an offer, value of
consideration, its acceptance, intention of making a contract and clearness of terms (Fifoot,
Seddon, Ellinghaus & RA 2012). A breach of contract is registered, when the promise is not
fulfilled. In such scenarios parties have two option one is to go with the litigation present or
to resolve it by the means of ADR methods. This report will also discuss the similar kind of
cases.
i) Solution
Issue
Here in the below case major challenge is the fact that among which parties the contract was
created and whether the contract was aptly made between those particular parties.
Rule
Invitation to treat and offer
Firstly the element that is first considered while making contract is the offer. Here one person
needs to make some terms. This is essential to make a differentiation among the offers that
has been made and the invitation to treat that was undertaken. Invitation to treat illustrates
that that the party aims to start the negotiation. On the other hand offer illustrates that the
parties aims to generate a relationship on the basis of law. Variation among the two might
become essential when it is associated with advertisements that were published. These
published advertisements consist of unilateral offer that might be accepted through acting on
such published advertisements. This kind of offer can be seen in Carlill v Carbolic Smoke
Ball Company [1893] 1 QB 256. Commonly, this doesn’t happen and advertisements that are
published are believed to be as invitation to treat. This is supported by the case of Partridge v
Crittenden [1968] 1 WLR 1204 (McKendrick, 2014).
Acceptance
When offer is given by one individual it requires to get accepted by the party to which that
offer was provided. It is also critical that offer is taken in the same manner it was made.

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However, if it is altered or changed instead of getting accepted then it would be called as
counter offer (Friedman, 2011). Hyde v. Wrench (1840) 3 Beav 334 gives the fact about
expiry of original offer. Felthouse v Bindley (1862) EWHC CP J35 states that silence might
not be called as effective acceptance.
Another important element in acceptance is the “date of acceptance” and is marked on the
date when acceptance is conveyed to the party that has offered. However the primary
exclusion to this rule is protected under the guidelines provided under the postal rules.
According to this rule, acceptance date is the date on which acceptance letter is sent (Bix &
Bix, 2012). Postal office acts as a root of the validity as it acts as an agent of the party which
has made the offer. At the same time the relevancy of the date becomes negligible when the
letter reaches to the party that has offered. Acceptance rules were stated in Adams v. Lindsell
(1818) 106 ER 250 because of the acceptance of the postal rules (Hillman, 2012).
Consideration
Third major need for formation of contract is that there must be valid consideration for that
contract. It might be anything as big so that it has an economic value (DiMatteo, 2010). In the
case of Chappel & Co Ltd v Nestle Co Ltd [1960] AC 87, court gave three wrappers were
known to be as the rightful consideration because of the present conditions and hence
supporting the validity of contract (Poole, 2016).
Capacity
It was a requirement to illustrate that the individuals on both the sides have capacity to get in
a relation on a basis of the laws. However, parties that are making the contract need to
acquire a legal age and should have a distilled thought for making it (Andrews, 2015).
Intention
Parties must show the intention to create relations on the basis of laws that might attract legal
liability and responsibility.
Clarity
For the contracting parties the contract terms have to be clear as it promotes different
liabilities and rights for the parties (Hogg, 2011).
Application
In the case it is clear that offer was made by the Alan with their FB post made on 1st
November. Motive towards believing it like a offer, roots from its application in a case of