Business Law: Contract Formation, Revocation, and Minor's Capacity

This report delves into the intricacies of contract law, focusing on the essential elements of a valid contract: offer, acceptance, intention to create legal obligation, capacity, and consideration. The analysis centers on the rules governing offer and acceptance, unilateral contracts, revocation of offers, minors' capacity to contract, and the postal rule of acceptance. The report applies these legal principles to a specific scenario involving Top Tickets Ltd., Bethany (a minor), Shaun, and Maya, examining the validity of potential contracts between each party and Top Tickets. It explores whether the advertisement by Top Tickets constitutes an offer or an invitation to treat, considering the postal rule's applicability to Bethany's acceptance. The report also assesses the impact of Shaun's phone call and message, and Maya's awareness of the offer's revocation, on the formation of contracts. Relevant case laws such as Partridge v Crittenden, Carlill v Carbolic Smoke Ball Company, Adams v Lindsell, Entorres v Miles Far East, Nash v Inman, and Byrne v Leon Van Tienhoven are used to support the analysis and determine the rights and obligations of each party involved.

Running head: BUSINESS LAWS
Business Laws
Name of the student
Name of the university
Author note

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Introduction
There are basically five elements of a valid contract offer, acceptance intention to create legal
obligation capacity and consideration. Offer and acceptance are fundamentals to the creation of
an agreement between the parties. They work on the notion of consensus ad idem which means
meeting of minds. With respect to such laws an offer and acceptance is only established when
the minds of the parties are totally met (Poole 2016). The paper discusses rules in relation to
contract law specifically that of offer and acceptance, unilateral contract, revocation of offer,
minors capacity to contract and postal rule of acceptance. The rules are applied on facts to
analyze the position of the parties.
In relation to the position which Top Tickets Ltd are in there are three primary issues which have
be addressed
 Firstly, whether Bethany has created a valid contract with Top Tickets’ or not
 Secondly, whether Shaun has a valid contract with Top Tickets’ or not
 Thirdly, whether Maya has a valid contract with Top Tickets’ or not
Main Body
In order to address the issues identified above the rules in relation to contract law which needs to
be discussed are that of offer and acceptance, unilateral contract, revocation of offer, minors
capacity to contract and postal rule of acceptance.
Offer and acceptance
Offer and acceptance are fundamentals to the creation of an agreement between the parties.
They work on the notion of consensus ad idem which means meeting of minds. With respect to

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such laws an offer and acceptance is only established when the minds of the parties are totally
met (McKendrick 2014).
An offer is a promise which is provided in exchange of a performance to be made by the party to
whom the offer has been made. An offer and invitation to offer is not the same (Hunter 2017).
Any advertisement is not held to be an offer as such rules had been stated in the case of
Partridge v Crittenden [1968] 1 WLR 1204. Advertisement cannot be an offer as the offeror
may not be able to provide the item to all those who want to buy it. The court made it clear that
there is no significance of an invitation to treat at law. No legal rights are attached to an
invitation to treat. In his case the court held that an advertisement made by the defendant in the
news paper for the sale of protected bird was not an offer and thus the defendant was not liable.
A person can make an offer to an invitation and cannot accept it.
The provisions of unilateral offer had been analyzed through the case of Carlill v Carbolic
Smoke Ball Company [1892] EWCA Civ 1. In this case an advertisement had been considered
to be an offer. The court stated that an offer can be directed to the world at large. When an offer
does not require communicating the acceptance it is a unilateral offer and the contract is formed
when the party completes there part of the consideration. In this case it had been stated by the
court that the revocation of offer has to be done in a similar way or mode through which the offer
had been made. In this case the court claimant the acted according to the advertisement made by
the defendant and thus the court held that when the consideration was performed an unilateral
contract was established and there was no need to communicate the acceptance to the offeror.
The postal rule solves confusion in relation to the time of acceptance. The rule was initiated and
applied in the case of Adams v Lindsell (1818) 106 ER 250. The rules is applied to

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communications which does not expressly deny post as a mode of communication . The rule is
further only applicable where the post has been accurately addressed. The rule makes the
acceptance takes place when the letter is posted rather than when letter is received. Thus even if
the letter is not received it will account to an acceptance. However in Entorres v Miles Far East
[1955] 2 QB 327 a rule was stated that in electronic communication acceptance happens when it
enters the system.
It has been provided through the case of Nash v Inman [1908] 2 KB 1 that a minor does not
have capacity of being a party to the contract. A minor is a person who is yet to attain the age of
18 years. The rule is also governed by statute law such as Minors (Property and Contacts) Act
1970 (NSW). The rules is subjected to few certain exception these include contract for
necessities and contract for beneficial employment. Another exception to the general rules takes
place when the obligation of the minor under the contract has been performed by him as
discussed in the case of Pearce v Brain, [1929] 2 K.B. 310.
The revocation of an offer is one of the processes at contract law through which an offer is
ended. Revocation means letting the offeree known that the offer is no longer eligible to be
accepted. An offeror has the right under law of contract to revoke the offer whenever they want
but before the offer has been accepted (Knapp, Crystal and Prince 2016). Further it had been
stated by the court in the case of Byrne v Leon Van Tienhoven (1880) 5 CPD 344 that the
revocation made by the offeror will only be valid when it has actually been received by the
offeree opposed to the postal rule of acceptance which cannot be applied where revocation is at
issue. Once a revocation has been received by the party it has no right to accept the offer again.
Analysis

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Top Tickets and Bethany
It has been provided through the scenario that Bethany is a thirteen year old girl. She had come
across the advertisement which has been made by top tickets. The advertisement was related to
sale of tickets for rare event. The price of the tickets had been stated in the advertisement to be
$6 which had been later rectified by the managing director to be $60. In the case of Partridge v
Crittenden the court had stated that an advertisement is an invitation to the offer due to the
reasons which have been analyzed above. However the advertisement can also be regarded as a
unilateral offer as provided in the case of Carlill v Carbolic Smoke Ball Company. Thus in the
present scenario also the advertisement can be considered as an unilateral offer as any reasonable
person in the position of Bethany will assume that there is intention to be legally binding in the
advertisement made by Top tickets and such advertisement is an offer. It has further been
provided by the facts of the case that Bethany had has sent a letter to top tickets on 6th may along
with the money. In the situation the postal rule can be applied to analyze acceptance. The postal
rule states that the acceptance takes place when the letter is posted rather than when letter is
received. Thus even if the letter is not received it will account to an acceptance. In this situation
it can be stated that the acceptance of the offer was done when Bethany posted the letter of
acceptance to Total tickets. She did her part of the unilateral contract and thus contract was
formed with total tickets. However one of the essential elements of a valid contract is that of
capacity of the parties entering the contract. A minor does not have capacity of being a party to
the contract. A minor is a person who is yet to attain the age of 18 years. The rule is also
governed by statute law such as Minors (Property and Contacts) Act 1970 (NSW). However the
rules is subjected to few certain exception these include the situation when the obligation of the
minor under the contract has been performed by him as discussed in the case of Pearce v Brain.

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In this situation Bethany has already committed the obligation she had under the contract with
top tickets. Further as per the case of Byrne v Leon Van Tienhoven the revocation of offer has to
be actually received by a person who would reasonably known that the offer has been revoked.
In this case the change of price had not been notified to Bethany and thus there is no way in
which she can has knowledge about the revocation. Thus top tickets may have a valid contract
with Bethany.
Top Tickets and Shaun
It has been provided through the fact relating to top Tickets and Shaun it has been provided that
Shaun has come across the advertisement and called the office to place an order for 25 tickets.
However no response had been received by him upon the call and he had left a message in
relation to the 25 tickets. In this situation also it has not been provided that Shaun has the
knowledge about revocation of the offer price which has been made by the managing director. In
the case of Carlill v Carbolic Smoke Ball Company it had been stated that revocation can be
done in a way in which the offer was made. Further as per the case of Byrne v Leon Van
Tienhoven the revocation of offer has to be actually received by a person who would reasonably
known that the offer has been revoked. In this situation there is no revocation which has reached
Shaun and thus he has the right to accept the offer. It has been further provided in the case of
Carlill v Carbolic Smoke Ball Company than an advertisement can be an unilateral offer. The
unilateral offer can be accepted without the communication of acceptance. It has been further
provided that no one has provided response to the phone call of Shaun. In the given situation it
can be stated through the application of the case Entorres v Miles Far East that acceptance in this

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case has been done when the message had been sent to Top Tickets and the message entered the
system of Top Tickets. Thus it can be stated in the present situation that if the advertisement is
considered as a unilateral offer than it has been properly accepted by the Shaun when he ordered
sent the message to Top Tickets. However where the advertisement would have been an
invitation to treat it would not have right to be accepted by Shaun.
Top tickets and Maya
Maya as provided by the facts of the situation is 25 year old and thus she is not a minor and has
the capacity to get into the contract.
She also has the right to accept the advertisement which is a unilateral offer as per the case of
Carlill v Carbolic Smoke Ball Company. She can make the acceptance any time before the offer
has been revoked in the given situation
Here she had not only seen the advertisement which offered to sell the tickets at $6 but also she
saw the advertisements of revocation of the offer. It has been stated by the court that in the case
of Carlill v Carbolic Smoke Ball Company - that the revocation of an offer is one of the
processes at contract law through which an offer is ended. Revocation means letting the offeree
known that the offer is no longer eligible to be accepted. An offeror has the right under law of
contract to revoke the offer whenever they want but before the offer has been accepted. In
addition it was stated that the revocation made by the offeror will only be valid when it has
actually been received by the offeree opposed to the postal rule of acceptance which cannot be
applied where revocation is at issue. Once a revocation has been received by the party it has no
right to accept the offer again. Thus when the revocation had been seen by her she is no longer
eligible to get into the contract with Top Tickets.

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Conclusion
From the above discussion it can be stated that advertisements are generally invitation to treat
and cannot be accepted by an offer. However in this case the advertisement is a unilateral offer.
There was a contract between Bethany and top tickets. There is also a contract between Shaun
and Top Tickets as he was not aware of the revocation and the contract was made when the
message reached top tickets. However there is no contract between top tickets and Maya as the
revocation was effective in this case.

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References
Adams v Lindsell (1818) 106 ER 250
Byrne v Leon Van Tienhoven (1880) 5 CPD 344
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
Entorres v Miles Far East [1955] 2 QB 327
Hunter, H., 2017. Modern Law of Contracts.
Knapp, C.L., Crystal, N.M. and Prince, H.G., 2016. Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Minors (Property and Contacts) Act 1970 (NSW)
Nash v Inman [1908] 2 KB 1
Partridge v Crittenden [1968] 1 WLR 1204
Pearce v Brain, [1929] 2 K.B. 310.
Poole, J., 2016. Textbook on contract law. Oxford University Press.