Contract Law: Validity, Acceptance, Revocation, Consideration, Invitation to Treat

This article explains the basics of contract law, including the validity of a contract, acceptance, revocation, consideration, and invitation to treat. It also includes relevant case laws such as Entoreas v Miles Far East Corp 1995, Adams v Lindsell [1818] 1 B & Ald 681, Dickinson v Dodds [1876] 2 ch 463 (B223), Errington v Errington [1952] 1 AII ER 149, Fisher v Bell[1961] 1 QB 394, and Stevenson v McLean [1880] 5 QBD 346.

Running head: CONTRACT LAW
Contract law
Name of the Student
Name of the University
Author Note

1CONTRACT LAW
1A. A contract is a legal agreement which is enforceable in a court of law. For a contract to be
valid, there needs to be an offer and a subsequent acceptance. In case of a valid acceptance, the
acceptance has to be communicated to the offeror. Similarly, in case of a revocation or
termination, it is necessary for the actual communication of the same. The acceptance if the offer
has to be unambiguous and unconditional with all the definite details. The acceptance has to be
made keeping in mind the communication of both the parties. This was held in the case of
Entoreas v Miles Far East Corp 1995. In the case of Adams v Lindsell [1818] 1 B & Ald 681 it
was held by the court that any acceptance which is done by posts, the acceptance is effectuated
the moment it has been posted, not when it reaches the recipient. In this case, there is no contract
as Kin Chai merely offered to sell which was not accepted by INTLSTANDARD UMBRELLA
PROJECT. Until the offer is accepted, it does not become a binding contract. In the case of
Stevenson v McLean [1880] 5 QBD 346 it was held that a request for any information shall not
deem the contract as rejected and the offer shall stand valid for acceptance. The postal rule states
that it shall not make the acceptance a proof of the acceptance as it has not reached the
communication agent. In this case, the first letter was an enquiry for information whereas the
second shall not valid as it did not reach and was lost in transit.
1B. In the case of Dickinson v Dodds [1876] 2 ch 463 (B223), it was held by the court that any
revocation heard from a reliable source of a third party shall be sufficient for revocation. Again,
in the case of Errington v Errington [1952] 1 AII ER 149 that in cases of unilateral contracts, a
promise cannot be revokes if the parties have already started to work on it. A promise cannot be
revoked if the performance has already started. The general rule of contract law is that the
statement has to be made by the contracting party or by anyone who is working on his behalf. In
the present factual scenario, the third source was not a reliable one and based on the information

2CONTRACT LAW
of the third party, the agreement was revoked. Kin Chai did not inform Fan Man and therefore, it
is a breach of contractual obligations.
2a. The difference among executory, executed and past considerations are as follows:
Executory: Executory consideration is when the promisee has not completed the requirements of
the consideration. This consideration shall arise when the promisor’s promise is done as a return
for counter promise from the plaintiff.
Executed: This is when the consideration is executed subsequently when the contract is made.
Past: This is considered to be an insufficient consideration, that is, not a consideration at all.
2b. An invitation to treat is considered to be an offer and it is treated as an expression of the
intention or willingness to enter into a contract. It is merely an offer and it does not constitute a
legally enforceable contract. Once a positive response is received to any invitation to treat, it
turns into an initial offer. Fisher v Bell[1961] 1 QB 394 held that any display of any article with
a price tag mentioning the price of the article is an invitation to treat. Merely a negotiation, it is
not an offer unless offeree has the power to enter into a contract by accepting the terms of the
negotiation.

3CONTRACT LAW
References
Adams v Lindsell [1818] 1 B & Ald 681
Dickinson v Dodds [1876] 2 ch 463 (B223)
Entoreas v Miles Far East Corp 1995
Errington v Errington [1952] 1 AII ER 149
Fisher v Bell[1961] 1 QB 394
Stevenson v McLean [1880] 5 QBD 346