Business Law Assignment: Contract Law Issues and Case Analysis

This business law assignment delves into several key contractual issues. The first question examines the concept of an invitation to treat versus an offer, using the scenario of a book purchase and analyzing Carla's right of refusal. The second question is broken down into three issues. The first issu...Read More

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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Q.1
Issue
The issue in this present scenario is whether Carla has the right of refusal with respect to
the selling of the goods.
Rule
An invitation to treat is merely a display of eagerness which invites an offer for effecting a
negotiation of the contract and in no way be implied as an offer. It signifies a request made to
the other party to come up with an offer. The same can be illustrated with the case of Harvey
v. Facey [1893] A.C. 552. A display of goods having price attached to it needs to be treated
as the an invitation or request to another person to make an offer with respect to such goods
and the same is not be identified to be an offer. The same can be illustrated with the case of
Fisher v. Bell [1961] 1 QB 394. Owing to this any willingness that has been made to make
purchase of such items will be treated as an offer and not as an acceptance. Such an offer is
required to be accepted in order to establish a contract. The person effecting the display of
such goods has the ability or entitlement of refusing to sell the goods as no formation of
contract has been created. The same be explained with the case of Partridge v Crittenden
(1968) 2 All ER 425.
Application
In the instant scenario, Brendan went to the Clayton Books store for the purpose of buying
a copy of a book named ‘The Tactical Use of Elephants in Warfare by the Ancient Greeks
and Romans’. He saw the book in the window of the shop. Carla informed Brendan that all
the copies of that book has been sold and advised him to find a book of similar kind in the
backside of the shop. This can be treated as an invitation to make offer and not offer.
Moreover, an identical book has been found by Brendan and he made a request to make

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purchase of that book. This can be construed to be an offer and the same needs to be accepted
to create a contract. Before such an acceptance, Carla can be construed as entitled to make
refusal with respect to the goods.
Conclusion
Hence, it can be concluded that Carla has the right of refusal with respect to the selling of
the goods.
Q.2
Issue a
The issue in this present scenario is whether there has been any agreement being formed
between Edward and Greg.
Rule
The communication of an offer towards the offeror is required to be effected for the
purpose of creating a contract, which is valid. The completion of the communication of
acceptance is effective if the same has reached the knowledge of the offeror. This can be
illustrated with the case of Entorres v Miles Far East [1955] 2 QB 327. However, in case of
postal rule, communication of acceptance, which has been effected using the postal services
is complete when the letter containing the acceptance has been posted. This is because the
posting of the makes it beyond the control of the offeree. In such a case, the consciousness of
the offeror regarding the acceptance is not relevant. This principle can be explained with the
case of Holwell Securities v Hughes [1974] 1 WLR 155. The acceptance of an offer when
complete creates a contract, which is binding upon the parties and the same cannot be
revoked afterwards. This can be illustrated with the case of Dickinson v Dodds (1876) 2 Ch.
D. 463.

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Application
In the instant situation, on 4th of February, Edward has posted a letter to Greg offering to
sell goods. The letter has been received by Greg on the date of 7th February. Subsequent to
the receipt of the offer, Greg has posted a letter to effect an acceptance and the letter has been
posted on the same date in which the offer has been received by Greg. The letter still being in
transit, Greg resolved to cancel the acceptance and decided to make a revocation of the same.
In this furtherance, Greg has made a revocation of the acceptance by sending an email to that
effect. The email has asked Edward to ignore the letter of acceptance. However, it can be
stated that the postal rule renders a communication of acceptance to be valid as soon as the
letter has been posted and the same creates a legal obligation. Hence, the revocation of the
same cannot be treated to be valid. Hence, there has been an agreement being formed
between Edward and Greg.
Conclusion
Hence, it can be concluded that there has been an agreement being formed between
Edward and Greg.
Issue b
The issue in this present scenario is whether Peter can be held liable for the amount
unpaid.
Rule
A part payment that has been made by a person towards a consideration cannot be
generally treated as a valid consideration. The person accepting the payment, which has been
made partly in an hesitant manner has the right to bring an action against the person making
the part payment to claim the amount, which has not yet been recovered. This principle can
be supported with the case of Foakes v Beer (1883-84) L.R. 9 App. Cas. 605. However, the

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doctrine relating to promissory estoppel puts a restriction on the person to deny or refuse any
liability of the promise that he has made with respect to the part payment accepted. This can
be illustrated with the case of Central London Property Trust Ltd v High Trees Ltd [1947]
KB 130. It prevents a person, who has promised not to bring a proceeding with respect to the
part of the consideration that has not yet been recovered. This can be illustrated with the case
of Tool Metal Manufacturing v Tungsten [1955] 1 WLR 761. Hence, it can be stated that a
person who has once accepted a part payment as a full settlement of the debt and made a
promise to the party making the part payment not to sue for the recovery of the rest of the
payment cannot deny the promise and loses the right to bring an action to that effect. This can
be illustrated with the case of Hirachand Punamchand v Temple [1911] 2 KB 330.
Application
In the instant situation, the goods were sold by Edward to Peter for the amount of $450.
This purchase has been effected on credit. The full payment with respect to the same has been
decided to be made on 28th February. On the date of 20th February it came to the knowledge
of Edward that Peter has been suffering from a financial distress and is probable to make a
default in the payment of the consideration for the goods that has been supplied to him by
Edward. This made Edward to resolve to extend a discount to Peter of $50 dollar and has
claimed $400 as a full settlement of the money owed to them. However, this discount has
been made by Peter as a condition if the money owed has been paid immediately. This made
Peter to make the payment immediately. This has barred Edward to further bring a
proceeding against Peter for the recovery of the rest of the amount as the same has been
restricted by promissory estoppel.
Conclusion
Hence, it can be concluded that cannot be held liable for the amount unpaid.

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Issue c
The issue in this present scenario is whether there will be any contract for the purpose of
selling the goods in the event of Peter and Edward being cousins.
Rule
The most important aspect with respect to a contract is the intention to the create legal
relation. It is a probability of the court to render agreements between relatives to be
unenforceable in nature for being not supported with intention for creating legal obligations.
This presumption of the court can be illustrated with the case of Balfour v Balfour [1919] 2
KB 571. This affinity also makes the court to render commercial agreements to be effected
with an intention to create legal relations as held in the case of Edwards v Skyways Ltd
[1964] 1 WLR 349. However, this contention of the courts has been rejected in the case of
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8. As the presence of
intention of creating legal relations needs to be examined with respect to the circumstances of
the case.
Application
In the instant situation, although Edward and Peter are cousins, the agreement between
them cannot be treated to have lacked the intention to create legal relations. This is because
of the formalities and the intention of making the contract that is visible in the circumstances
of the particular scenario.
Conclusion
Hence, it can be concluded that there will be a contract for the purpose of selling the goods
in the event of Peter and Edward being cousins.

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Reference
Balfour v Balfour [1919] 2 KB 571
Central London Property Trust Ltd v High Trees Ltd [1947] KB 130
Dickinson v Dodds (1876) 2 Ch. D. 463
Edwards v Skyways Ltd [1964] 1 WLR 349
Entorres v Miles Far East [1955] 2 QB 327
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8
Fisher v. Bell [1961] 1 QB 394
Foakes v Beer (1883-84) L.R. 9 App. Cas. 605
Harvey v. Facey [1893] A.C. 552
Hirachand Punamchand v Temple [1911] 2 KB 330
Holwell Securities v Hughes [1974] 1 WLR 155
Partridge v Crittenden (1968) 2 All ER 425
Tool Metal Manufacturing v Tungsten [1955] 1 WLR 761