Contract Law Essential Elements

Running head: CONTRACT LAW
Contract Law
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CONTRACT LAW
Q1A
The essential elements of a valid contract shall be discussed in this section (Knapp, Crystal and
Prince 2016). The section shall also examine the relation that existed between Avinash and the
café. To constitute a valid contract, the essential elements that need to be considered are:
Offer: the offer is defined as the promise to do an act in return for a consideration to constitute a
valid contract. the contract to be made enforceable, the terms of the contract need to be clear,
concise and not ambiguous (Kotz 2017). In the case of AGC (Advances) Ltd v McWhirter, the
court laid down the valid terms of the contract stating that to constitute a contract, the terms of
the offer cannot be incomplete (Moyle 2017). For a offer to be enforceable, the terms cannot be
uncertain. If the terms are not clear, the offer shall lose its essence and it will turn into an
invitation to treat (Hough and Kuhnel 2017). This was upheld in the case of Pharmaceutical
Society of Great Britain V Boots Cash Chemists(Southern) Ltd, where the court held that
when the goods are displayed on the shelves of a store, they do not constitute an offer but merely
an invitation to treat (MNNING 2016). Applying the same principles of offer and invitation to
treat in the present case, it can be held that the self service menu that was presented by the cafe
was an invitation to treat but when Avinash placed the order of pastry and the beverage from the
self service menu which was digital, an offer was constituted. Therefore, Avinash can be said to
be a valid offeror because he offered to pay in return of the orders to the cafe. The amount paid
to the cafe is a valid consideration.
Acceptance: acceptance is an important wheel in the contract because to constitute a valid
contract, it is essential that there has been an acceptance of the offer. Once an offer is accepted
by a party, it becomes legally binding but there are a few conditions that need to be met to

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CONTRACT LAW
constitute a valid acceptance (Sullivan and Hilliard 2016). The acceptance has to be clear from
all ambiguities and it has to be acceptance on the same line of the offer, that is, no changes can
be made to the already made offer. In cases when changes are made to an offer, it will be a
counter offer and not a valid acceptance (Fried 2015). In the case of Masters v Cameron, it was
held the acceptance has to be done in accordance with the terms of the offer. In the case of R v
Clarke, it was held that once a person has accepted the offer he should be fully aware of the
terms of the offer and the acceptance has to be done as per the terms of the offer. A silence will
not constitute a valid acceptance and the offeror cannot maintain silence. This was held in the
case of Felthouse v Blinley. The terms of the offer needs to be communicated to the offeror was
decided in the case of Powell v Lee (Bjorklund 2015). Applying the same rules to the present fact
scenario, it can be said that the cafe had accepted Avinash’s offer and the acceptance was done in
terms of the offer. The printed ticket given by the cafe can be considered a valid communication
of the offer. Therefore, Avinash got the printed ticket from the cafe which is a proof that the
acceptance was communicated to Avinash.
Intention of the parties to constitute a legal relation: the aprties need to have an intention to
create a legal relation and it was held in the case of Carlill v Carbolic Smoke Ball. This case laid
down the reasonable man test which held that the intention to create legal relation has to be
assessed from the point of a reasonable man and how he would have viewed the legal relation
(Wilkinson and Hoffman 2015). The Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty
Ltd held the objective test (McColl 2017). Applying both the tests held in the landmark
judgments, it can be said that both the parties, that is, the cafe and Avinash had the intention to
create a legal relation. The printed tickets prove that both the parties had the intention to enter
into a legal relation and they were aware of the terms of the contract.