Contract Law: Essentials of a Valid Contract and Remedies for Breach

Running head: CONTRACT LAW
CONTRACT LAW
Name of Student-
Name of University-
Author note

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CONTRACT LAW
Answer 1(a)
Issue:
Was there a formation of contract between John Doe and Tom Jones under the common
law?
Relevant Rule:
According to the contract law, there are certain essentials of a contract, which must be
present while forming a valid contract (Kötz 2017). According to the common law, there are five
main essentials of a valid contract are as follows:
 Offer and acceptance
 Legal relationship
 Lawful consideration
 Competency to contract
 Free and mutual consent
The first and the most essential aspects are offer and acceptance. There must be a lawful
offer from one party and a valid acceptance by the other party (Smits 2017). This is the basic and
the first requirement in order to form a valid contract.
In this context, It is another rule of contract law that after the offeror makes an offer to
the offeree and when the offeree provides a counter offer, the original offer gets destroyed and
the original offeror becomes the offeree and the offeree becomes the offeror. In the case of Hyde
v Wrench (1840) 49 ER 132, Wrench had offered Hyde to sell an estate for 1000 pounds, to
which, Hyde made a counter offer that whether the estate could be bought for 950 pounds ( Poole

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CONTRACT LAW
Shaw-Mellors and Devenney 2017). Hence, in this case, it was held that the original contract of
sale by Wrench was destroyed and the counter offer made by Wrench was a new offer, where
Wrench became the offeree and Hyde became the offeror.
Another rule of contract law is that an offer can be revoked at any time before its
acceptance. However, such revocation must be brought to the notice of the offeree, otherwise it
has no effect. In DICKINSON V. DODDS [1876] 2 CHD 463, Dodds offered Dickinson to sale
a house for $800 and stated in his offer later that the deal was open till 12 June, 9 am. On the 11 th
of June, Dodds sold it to another person and Dickinson got to know of it from another person and
had sent a formal letter of acceptance to the offer to Dodds before the end of the stipulated time
of the offer. It was held that no acceptance was made and offeree was aware of Dodds being no
longer minded to sell the house to him beforehand and therefore the offer was withdrawn validly
(Jones 2017).
Application:
In the given case, John Doe made an offer to sell 1000 tons of Barley to Tom Jones for
$1000 per ton, which he would deliver in 60 days and payment was to be made in cash. To this
offer, tom Jones made a counter offer that he would like to pay the amount in four installments.
Therefore, according the common law of contract, due to the counter offer of Tom Jones
(offeree), the original offer of John Doe (offeror) got destroyed and the counter offer gave rise to
a new offer, where Tom Jones became the offeror and John Doe became the offeree and this rule
shall apply here in accordance with the decision in the case of Hyde v Wrench .
The offer made by John Doe was open till 22nd and the counter offer by Tom Jones was
made on 17th August. After receiving the letter on 18th August, John Doe immediately replied to