Contract Law: Essentials, Case Laws and Analysis

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

1CONTRACT LAW
Table of Contents
Response to Question 1...................................................................................................................2
Invitation to treat or offer:...........................................................................................................2
Agreement between Bill and Frank:............................................................................................2
Agreement between Mark and Frank: Rules of Communication: Rejection of offer..................2
Agreement between John and Mark: Rule of Electronic Communication..................................3
Agreement between Tom and Frank: Electronic communication...............................................4
Conclusion:..................................................................................................................................5
Response to Question 2...................................................................................................................6
Essentials of Contract:.................................................................................................................6
Consideration offered to Renee:..................................................................................................7
Case laws:....................................................................................................................................7
Conclusion...................................................................................................................................8

2CONTRACT LAW
Response to Question 1
Invitation to treat or offer:
In this case, the advertisement is an offer and not an invitation to treat. Offer means an
invitation by a person to another for accepting to do or not to do something under certain terms
and conditions. An offer can be made to a person, to a group or to the world, according to the
Carlill v Carbolic Smoke Ball Co. case. (Barnett and Oman, 2016). Invitation to treat, on the
other hand, refers to an invitation to negotiate with an intention to make an offer (McKendrick
and Liu, 2015.). Here, the terms of offer is quite clear and non-negotiable. Hence, in this case, it
has to be classified as an offer to enter into an agreement.
Agreement between Bill and Frank:
There is no agreement between Bill and Frank even though Bill accepted Frank’s offer,
for his acceptance did not meet the consideration amount quoted by Frank. Moreover, Frank
gave no positive response to Bill’s acceptance either. Hence, there is no agreement between Bill
and Frank.
Agreement between Mark and Frank: Rules of Communication: Rejection of offer
There is a binding contract between Mark and Frank even though there was no face-to-
face communication between the two parties. It is so because he (Frank) deposited the cheque
sent by Mark accepting his offer. The offer seems to be consciously accepted by Frank as he
deposited the cheque given by Mark even though they did not have a conversation regarding the
sale face to face and the consideration amount did not match up to Frank’s expectation. In spite

3CONTRACT LAW
of a lesser amount of consideration, Frank deposited Mark’s cheque and this marks the closure of
a valid offer and acceptance.
The rules of communication under the Australian Contract Law say that an agreement is
formed as soon as the communication of acceptance of the offer is received. Acceptance is
believed to be acknowledged when it is communicated with the offeror, in case of instantaneous
modes of communication. While, in case of non-instantaneous modes of communication like
post, acceptance of an offer is believed to occur when the letter is posted as observed in the case
Brinkibon v Stahag Stahl. (Kuhnel-Fitchen and Hough, 2017).
Frank cannot reject Mark’s offer anymore as he chose to deposit Mark’s cheque.
Deposition of the cheque speaks about Frank’s wish to enter into a binding contract with Mark
and complete the procedure of the sale. (McKendrick, 2014).
Agreement between John and Mark: Rule of Electronic Communication
There is no agreement between John and Frank even though John offered the exact
amount demanded by Frank in his advertisement. There lies no agreement between them as
John’s acceptance email was read by Frank after he had deposited Mark’s cheque as a sign of
response to Mark’s acceptance.
The vital essence of an offer and its acceptance is the mode of communication. (Stone
and Devenney, 2017). The general rule of communication under the Australian Contract Law
states that an agreement takes its shape where and when the offeror receives the news of
acceptance. In case of instantaneous modes of communication like communicating face to face