Contract Law in Auctions

BUSINESS LAW

TABLE OF CONTENTS
1. Way in which contract law is made.............................................................................................1
2. Difference between an offer and an invitation to treat................................................................1
3. Offer and acceptance position when buying a property..............................................................1
4. Factors which would have persuaded the court that there was an invitation to treat..................2
5. Conditions under which client can terminate a contract..............................................................2
6. Under what circumstance the contract could become unenforceable..........................................2
7. Advice to client what could be the court’s ruling........................................................................3
REREFENCES................................................................................................................................4

INTRODUCTION
This assignment is based on a case study of a case between Lee Auctioneers Vs Mrs Grace
Richards. In which Lee Auctioneers put a studio flat for sale at auction, subject to reserve. Mrs
Grace Richards made a bid for £210 000, which was the highest bid but Lee Auctioneers did not
accept the bid and Mrs. Grace Richards claimed that a legally binding had been entered when she
made a highest bid and Lee Auctioneers need to accept the bid.
1. Way in which contract law is made
There are certain basic rules of contract law that are required to be focused on when a legal
contract is made. There are certain elements of contract that are required to be considered when a
contract is made such as: acceptance, offer, considerations, intention to create legal relation,
content (Cordella and Gualdi, 2019). When resource exchange increases and there is a
requirement of parties to agree on a common point and are required to be assured then for such
cases contract law was made. Contract law is a common body of making and enforcing
agreements. It helps in making sure that parties to a transaction are clear on their terms. A valid
contract consists of four parts: first is offer which is made by a party who is offering to other
party. Party offering is required to indicate all the terms and conditions on the basis of which
offer will be given to the other party. Other party is required to accept terms of the party. Second
is acceptance which helps in making a contract complete. Party that accepts a contract is required
to accept all the terms of original offer. They must make sure that the other party knows it. Third
is consideration i.e. both the parties are required to give something up. For example, is one party
is offering a product then the other party is required to pay for it. Last is mutual intention to enter
into an agreement i.e. both the parties must intend to enter into a contract.
2. Difference between an offer and an invitation to treat
An offer is statement of terms which offeror is prepared to bound contractually. Offer
made by offeror should be complete, specific and capable of being accepted by the acceptor. It
includes terms and conditions of agreement with an intention that no longer negotiation will take
place (Nickerson, 2018). For example: when an auction takes place, each bid is an offer which is
then accepted by the auctioneer. An offer can be revoked or withdrawn any time prior to
acceptance provided there has been a communication between client and contractor. Whereas,
invitation to treat is completely different from offer as it only initiates ap party to make an offer
it is not intended to binding. In this, offers from people comes, negotiation on terms is done on
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