English Law of Contract

English Law
of Contract
Running Head: ENGLISH LAW OF CONTRACT 0
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Student’s Name

English Law of Contract 1
Issue 1
In the first case presented in the scenario, the issue of the case is to check
whether a lawful contract exists between Alan and Brian or not.
Rules 1
A valid contract consists of some elements and offer and acceptance are two
out of them. Offer is a very first element of each contract. It is a proposal to
do or not to do something in exchange for consideration1. When an offeror
makes an offer to another party, then such other party is required to accept
that offer in order to develop an agreement. Here this is to mention that
every offer is not a valid offer and some requirements are mentioned there
which an offer needs to be fulfilled, then only the same can be treated as a
valid offer. It was given in the case of Harvey v Facey 2 that a valid offer
must show the intention of the offeror to bind the other party i.e. offeree.
Similar to the offer, another term is also there in cases of contract, which is
closely resemble to offer and known as an invitation to treat. The term is
very confusing, people often think that offer, and invitation to treat is a
similar thing. Nevertheless, this is not true. An invitation to treat is only an
invite for offers. It means it comes before the offer and in this manner, it is a
different concept. It is not necessary for an invitation to treat to exist in each
contract. In reply to an invitation to treat, an offer comes and in reply to an
offer, acceptance comes. It means not similar to an offer, an invitation to
treat cannot be accepted3. In general, advertisement, and quotation are an
invitation to treat and therefore do not have the capability of an offer.
1 Smallbusiness.findlaw.com, ‘What Is an Offer?’ (Findlaw, 2019) <
https://smallbusiness.findlaw.com/business-contracts-forms/what-is-an-offer.html> accessed
15 May 2019
2 Harvey v Facey [1893] UKPC
3 Ewan MacIntyre, Essentials of business law (Pearson UK 2018)

English Law of Contract 2
However, Megalift v Terminals4 [2009] NSWSC 324 is the leading case to
study here. In this case, it was provided that even a price quotation can be
treated as an offer in some situations depending on the intention of parties
and circumstances of negotiations between the parties. In situations where
the quotation is not general and is developed considering the requirements
of parties, the same is treated as offer and not the invitation to treat.
Moving the discussion towards another element of contract i.e. acceptance,
this is to state that it is a consent that offeree gives in respect to offer made
by offeror. Similar to offer, requirements are also specified for valid
acceptance. The first requirement is that consent must be communicated to
the offeror as decided in the case of Entorres v Miles Far East5. Further terms
of the same must be similar to the terms of the offer and the third
requirement is that the agreement must be certain. It means acceptance is
treated valid when the same is communicated to the offeror without making
any changes in the terms mentioned under offer. Now another question is to
check the time of effectiveness of acceptance. In general, acceptance seems
to be completed when the same comes into the knowledge of offeror.
However, there is an exception to this rule, which is related to postal rules.
As decided in the case of Adams v Lindsell6, whenever parties choose the
postal mode for communication, then acceptance is treated as complete at
the moment when the offeree drops acceptance letter to post box and not at
the event when offeror receive such acceptance7. If parties want then they
can exclude the applicability of postal rules from their transactions. An
offeror can revoke the offer until the moment when appetence is not
complete. It means once acceptance is completed then offeror cannot revoke
his/her offer.
4 Megalift v Terminals [2009] NSWSC 324
5 Entorres v Miles Far East [1955] 2 QB 327
6 Adams v Lindsell (1818) 106 ER 250
7 James Holland and Julian Webb, Learning Legal Rules: A Students' Guide to Legal Method
and Reasoning (OUP Oxford 2013)

English Law of Contract 3
Application 1
In the provided case Alan is a retailer who is engaged in the business of eco-
friendly office furniture. Brian visited his store and asked for the quotation in
respect to refurnishing of his business’s office space. He asked quotation for
20 reclaimed oak office chairs. Here Alan prepared the quotation specifically
for Brian considering details provided by him. Alan provided this quotation on
Monday. Here this is to say that the quotation does not seem to be an
invitation to treat. Applying the provisions of Megalift v Terminals, this is to
say that the quotations will be treated as an offer as the same was specific
and had the capacity to be accepted as an offer. Further, this offer had the
intention to bind another party i.e. Brian. As this was an offer, the same was
required to be accepted by Brian. Later on Wednesday, due to increase in
prices of chairs, Alan decided to revoke the offer made to Brian. He sent a
voicemail as well as e-mail to him. On the same morning, he received an
acceptance letter from Brian as he selected postal mode for communication.
This letter contained a date of the day before i.e. of Tuesday. It means Brian
posted the subjective appetence letter on Tuesday that Alan received on
Wednesday morning. Applying the provisions of the postal rule and the
decision of Adams v Lindsell, acceptance of the case will be treated as
complete and communicate on Tuesday as Brian posted a letter on this day.
A valid contract became develop between Alan and Brian on Tuesday and
therefore Alan cannot revoke the offer on Wednesday.
Conclusion 1
In this case, a valid contract does exist between the parties and they have
rights and obligations to each other. Alan cannot revoke the offer on
Wednesday as the contract was developed on Tuesday.
Issue 2