Rules Contract development is not an isolated task

Running Head: Trimester 3, 2019 0
Business Law
BLO1105
Student’s Name
1/16/2020

“Trimester 3, 2019” 1
Contents
Part A.................................................................................................................................2
Issue 2
Rules 2
Application 5
Conclusion 6
Part B.................................................................................................................................6
Issue (1) 6
Rules (1) 6
Application (1) 7
Conclusion (1) 7
Issue (2) 7
Rules (2) 8
Application (2) 8
Conclusion (2) 9
Bibliography.....................................................................................................................10
Books/Journals 10
Cases 10
Other Resources 11

“Trimester 3, 2019” 2
Part A
Issue
How a contract was formed between parties of the case i.e. John and Span and Spic.
Rules
Contract development is not an isolated task and requires several factors to present.
These factors are essential elements of a contract and each of them needs to be
present in a valid contract despite the subject matter and parties of the contract. These
elements are discussed hereby. Starting the discussion on this topic, this is to state that
the first factor is offer. An offer refers to a communication made to another person that
amount a promise to do something or not doing so in the hope of getting a promise in
return. One of the definitions of the offer was given in the case of “ Australian Woollen
Mills v The Commonwealth”1 according to which an offer is an expression of willingness
to be bind by certain specific terms2. Here one of the important characteristics of a valid
offer can be seen which demands intention to be bind reflected in the same. This is the
reason that the common law of contract does not consider only a willingness of one to
negotiate with another as an offer. There is no particular form in which an offer should
be made3. This seems important to inform here that for a valid offer the same does not
need to be address to one particular person but the same cane be address to more than
one person or a group or even to the whole world. The terms of an offer should be clear.
Similar to an offer, an invitation to treat is another term of contract law. As the name of
1 Australian Woollen Mills v The Commonwealth (1954) 92 CLR
2 Michael Furmston and G.J. Tolhurst, Contract Formation: Law and Practice (OUP Oxford 2010), 2.15.
3 australiancontractlaw.com, Agreement (australiancontractlaw.com)
<https://www.australiancontractlaw.com/law/formation-agreement.html>.

“Trimester 3, 2019” 3
the term implies, an invitation to treat makes calls for the offer and therefore it always
comes before offer in a case. The one important thing to mention here is that an
invitation to treat is not necessary to exist in every case. Since an invitation to treat
cannot be accepted as offer hence two of these terms are need to be clear and
differentiate. One of the bases of this difference was provided in the case of “ Fisher v
Bell”4, where the court determined that the good displayed in a shop window with their
rate tags falls in the category of invitation to treat5. In such cases, customers make the
offer by picking up goods to counter or by informing the choice of particular services to
shop assistants. Thereafter shop assistant accepts or rejects the offer made by the
customer. Many other cases have been decided by courts where different transactions
were identified as an invitation to treat. For instance in the case of “Heathcote Ball v
Barry”6, it was held that auction amounts to an invitation to treat rather than an offer.
Another essential element of a contract is acceptance. It is to say that once a valid
consent takes place, a contract is formed between the parties. Nevertheless, some
other factor needs to be there already, which would further be discussed here. The
party who has received the offer from the offeror should make acceptance. This
acceptance shows that the other party also wants to enter into a contract with the
offeror and agrees to all the terms given under the offer made to him/her. It means if the
terms of an offer and consent are different from each other then such communication is
termed as a counteroffer rather than the valid consent as given in the case of “ Hyde v
Wrench”7. In general, the offeree needs to communicate his/her consent to the offeror
4 Fisher v Bell [1961] 1 QB 394
5 Damian Taylor and Richard Taylor, Contract Law Directions (Oxford University Press 2017), 362.
6 Heathcote Ball v Barry [2000] EWCA Civ 235
7 Hyde v Wrench (1840) 49 ER 132