Formation of Valid Contract: Case Analysis

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Legal Problem Solving

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Answer
Issue
Whether a valid offer has formed between Ben and Arthur regarding the sale of the
computer?
Rule
The contract is referred to a legal agreement which is formed between two or more
parties which binds them to its terms. A contract binds its parties into legal relationships
based on which they have the obligation to ensure that they comply with its terms in order to
avoid legal consequences. The parties to a contract can enforce other parties to comply with
the contractual obligations only if the contract formed between the parties is valid. In order to
form a valid contract, certain elements are necessary to be fulfilled by the parties. Firstly, an
agreement must be formed between the parties which require that an offer is made by a party
and the acceptance is given by another party (Gibson, 2018, pp. 176-178). The court provided
in Harvey v Facey [1893] UKPC 1 case that a valid contract must show that the offeror has
the intention to be bound by the terms of the offer. After accepting an offer, an agreement is
formed between the parties (Gibson, 2018, p. 203). However, an offer is different from an
invitation to treat, and it is important to distinguish them since an agreement cannot be
formed by accepting an invitation to treat. The invitation to treat is referred to the invitation
to consider the offer of a party because the person making the offer did not have the intention
to be bound by the words or conduct to make an offer. In Partridge v Crittenden [1968] 2 All
ER 421 case, the court provided that the advertisement of goods made in newspapers are
referred as an invitation to treat because generally the parties making the advertisement did
not have the intention to be bound by its terms (Gibson, 2018, p. 199).
Moreover, an offer is rejected in case the party makes a counter offer because it
considers as an express or implied rejected of the original offer made by the party. In Hyde v
Wrench [1840] 3 Beav 334 case, an offer was made by the defendant to sell the farm for
£1,000, however, the claimant replied by giving an offer for £950 for the land. The defendant
rejected the proposal, so the claimant accepted the original offer of the defendant; the
defendant denied selling the land. The court provided that the counter offer made by the
claimant rejected the original offer which cannot be accepted anymore (Gibson, 2018, pp.
208-209). A binding contract is formed after receiving a valid acceptance. The court provided