Law of Contract and Negligence | Assignment

RUNNING HEAD: LAW OF CONTRACT & NEGLIGENCE
Law of Contract and Negligence
Name of the student
Name of the university
Author note

1
LAW OF CONTRACT & NEGLIGENCE
Response to question 1:
1.(a) Under the law of England and Wales, what is a contract and what are the requirements
for a valid contract to be formed?
(b) Would Ringo be liable to pay Paul based on the facts above?
A contract is a type of agreement that is either recognised or enforced by law which establishes
into obligation in between two parties. A contract becomes legally binding when there is a
presence of voluntary agreement enforced by law between two or more parties. The formation of
a contract starts with an ‘offer’. It can be an offer for exchange of money for buying goods.
There can also be an offer of receiving services in exchange for any other services. Basically a
contract becomes valid when there are an offer acceptance and consideration. There are three
essentials of a contract to be created:
 Agreement
 Contractual intention
 Consideration
The first requirement of a contract is the involvement of the parties reaching the agreement.
Generally an agreement can only be reached if one of the party makes an offer and the opposite
party should be present to accept the offer made by the other party. Whether the parties have
reached the agreement is decided by the court by applying an objective test.
Offer:

2
LAW OF CONTRACT & NEGLIGENCE
An offer is the willingness to express a contract on specific terms that is made with an intention
that is binding once the acceptance is done by the addressed person1. There should be a
manifestation objective of intention by the offeror bounded by the specific offer if the acceptance
is done by another party. The offeror shall be bound if his conduct or words induce an observer
of the third party for believing the intention to be bound even if he has no intention. This has
been held in the case of a university where a place has been offered to a student resulting in
clerical error2.
The address of offer can be done to the world at large, to a specific group or a single person. An
offer can be done by conduct or can be made expressly. There is a distinguished offer in case of
an invitation to treat in which an individual does not make any offer rather an invitation is sent to
another party. A statement is an invitation, or an offer depends mainly on the intention of the for
which the statement is made. The case of Carlill v Carbolic Smoke Ball Company [1893] 2 QB
256 is much relevant in this case.
Acceptance:
Acceptance is an unqualified and final expression of agreement concerning an offer. There
should be a manifestation of an objective by the receiver of the particular offer of intention
bounded by the terms. There should be an acceptance of an offer along with precise terms
forming an agreement. An acceptance of an offer should be made by conduct. There is no legal
effect on acceptance unless it is communicated to the person making the offer. The basic effect
in case of a postal acceptance takes effect when the acceptance letter is posted3. The rule of
postal acceptance cannot be applied if it does not include the terms of offer that is express.
1 Stover v Manchester City Council [1974] 1 WLR 1403.
2 Moran v University College Salford (No 2), The Times, November 23, 1993.
3 Henthorn v Fraser [1892] 2 Ch 27.

3
LAW OF CONTRACT & NEGLIGENCE
Acceptance is required for an offer that is to be communicated in a specific way through which
the order can be accepted. If an acceptance takes place through an instantaneous medium like
electronic mail it will affect the place and time of receipt4. It is to be noted that the silence of the
offeree cannot stipulate the offeror to acceptance. A failure of acceptance in communication does
not effect when there is a variation in terms of the made offer. In this position, there is a case of
counter-offer that can either be rejected or accepted. Revocation of offer can be made at any time
before the acceptance of the offer; in that case the communication must be made to the offeree.
But the revocation of communication should not be done personally to the offeror. If the
communication of revocation is not done then it becomes an ineffective communication5.
Consideration:
A promise is not a general rule in common law, binding of a contract until it is being supported
by consideration. The term ‘consideration’ is stated as “something that is valuable” that is
required for making a promise or giving a promise enforced as a contract. This can be considered
a detriment to the promisee, and it provides benefit to promisor. A promise contains no pledged
force until a value is given; there is no need for adequate consideration. The court does not enter
into the bargaining made between the parties6. The consideration should be provided by the
promisee. A promise can be made to a person and can be enforced if he provides the
consideration for the particular promise.
Balfour v Balfour7 in this case of a husband and wife the purpose to create legal bonding of a
couple when the agreement between them was that the husband has to pay his wife some amount
4 Entores v Miles Far East Corp [1955] 2 QB 327.
5 Byrne v Van Tienhoven [1880] 5 CPD 344.
6 There are a few exceptions, for example, where certain terms of a contract are void either by statute (for example, tenancy agreement) or where
common law holds the terms to be so unreasonable that they cannot be enforced and/or are varied by the courts.
7 [1919] 2 KB 571