Business Law Assignment: ILAC Analysis on Offer and Contract Formation

This business law assignment examines the foundational concepts of offer and contract formation, crucial for understanding legal obligations in business. The report employs the ILAC (Issue, Law, Application, Conclusion) method to analyze scenarios related to Sara-Jane's clothing store, clarifying the distinction between an offer and an invitation to treat, and the essential requirements for a valid contract. It explores case law, including Gibson vs. Manchester City Council, Fisher vs. Bell, and Pharmaceutical Society of Great Britain vs. Boots Cash Chemists Ltd, to illustrate the legal principles governing offers, acceptances, and the intention to create legal relations. The assignment concludes that displaying price tags in a store constitutes an invitation to treat, not an offer, and outlines the vital elements necessary for a contract to be legally enforceable, such as offer, acceptance, consideration, and intent to create a legal relationship. The report provides a comprehensive overview of contract law principles within the context of Irish law, emphasizing the importance of these concepts in daily business transactions.

Running head: BUSINESS LAW ASSIGNMENT
ILAC ON OFFER AND CONTRACT
Name of the Students
Name of the University
Authors Note

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Introduction
The contract is considered to be a vital part of the daily life of people. The contract is
regarded as an agreement whose primary characteristic is an arrangement. Some portion of the
‘Common law’ framework is included in the contract law of Ireland. The definition of the lawful
point of reference or judicial practice is an integral feature of this system, whereby court rulings
are focused on prior judgments defining comparable cases. The legal reference point helps to
establish a balanced approach to dispute resolution. Precedent shall apply even where, in any
event, the fact is known by those who accept a direct reference or ‘leading’ event as the valid
standards of the matter (Clark 2016). This paper aims to advise Sara-Jane, the owner of a
clothing store regarding the description of an offer, was the bag offered for sale and a detailed
explanation of the essential requirements to create a contract.
ILAC- 1
Issue
In this paper, the issue to be discussed is the detail description of an offer.
Law
Offer is considered to be one of the essential parts of a contract. Every individual wants to
make such a contract that can be legally enforceable. To make a legally binding contract, a valid
offer is necessary (Schwenzer, Hachem, and Kee 2012).
An offer is a guarantee that something is done or not done in reasonably clear terms
which someone else will accept. Offers should not always be made to a single individual but may
be made to the entire world or other groups of individuals (Beale et al. 2019). A contract is

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formed immediately after accepting an offer. More to that, being accepted, an offer could be
declined, a counteroffer could be made or the offer could have lapsed or the offeror would be
required to take away the offer so that it can never be accepted. In RTS Flexible Systems Ltd
vs. Molkerei Alois Muller Gmbh & Co KG [2010] UKSC 14 at [45], it has been decided by
the court that a successful offer needs to be communicated. Again in Gibson vs. Manchester
City Council [1979] 1 AII ER 972 case the court is of the view that an offer should be
unconditional, unambiguous and clearly state the basic requirements and be reasonable. An offer
can be made either verbally or in writing.
In Hartog vs. Collins and Shields [1939] 3 AII ER 566 case it has been observed by the
court that there are a few cases in which persons may erroneously assume that they have received
an offer, nonetheless which are not legitimate legal offers. Thus, it can be said that an invitation
to treat is different from an offer. Partridge vs. Crittenden [1968] 2 AII ER 421 is considered
to be a landmark case in this regard which discussed that often people get confused regarding the
terms of an offer and invitation to treat.
Application
Sara-Jane is the owner of a clothing store which deals with the selling of clothes to the
customer. In that store, the customer comes and chose clothes by observing the price tag. In that
store, no offer has been made directly to the customers As per the definition and by applying the
rules of the above-mentioned case it can be said that the store deals with the selling of clothes
which not always require a valid offer.
Conclusion
Therefore, it can be concluded that purchasing clothes by seeing a price tag is not an offer.

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ILAC- 2
Issue
In this paper, the issue to be discussed is whether the bag was offered for sale by the store
of Sara-Jane.
Law
According to McDermott (2018), an agreement between two or more parties, whether
individuals or organizations, shall be considered to be an agreement to create joint and lawfully
binding contracts. A valid offer consists of some essential requirements among which offer and
acceptance can be regarded as the most vital elements. An offer becomes a valid contract
whenever it is accepted by the offeree. Sometimes confusion arises between the terms an offer
and an invitation to treat.
An invitation to treat is merely a promise of inclination to come into bargaining. It is not
regarded as an offer and needs not to be accepted to create a binding contract. An invitation can
either be accepted or rejected by the offeree (Enright 2007).
The Court held in Fisher vs. Bell [1961] 1 QB 394 case that when a price tag is placed
on any commodity, that price tag is considered to be an invitation to treat by the retailer and not
an offer. In this particular case, an interesting example has been given by the court which stated
that an offer to sell violent weapons is unlawful. However, a flick knife along with a price tag
exhibiting a self-service window or store is considered to be an invitation to treat which is not
unlawful.

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In the Pharmaceutical Society of Great Britain vs. Boots Cash Chemists Ltd
[1953] case the court held that items exhibited for sale in a shop are regarded as an invitation to
treat.
In Harris vs. Nickerson [1873] case the court stated that an advertisement for an
upcoming auction is not an offer but an invitation to treat. The same view has been upheld by the
court in Partridge vs. Crittenden [1968] 2 AII ER 421 case and the court also held that an offer
is completely different from an invitation to treat.
Application
In the store of Sara-Jane, the dispute arises regarding the confusing price tag of a bag. A
customer wanted to purchase a bag in which the price tag displayed that the price of the bag is 75
Euro but at the counter, it showed that 750 Euro.
By applying the rule of Fisher vs. Bell [1961] 1 QB 394 it can be said that the bag was
not offered for sale.
By applying the rule of the Pharmaceutical Society of Great Britain vs. Boots Cash
Chemists Ltd [1953] case it can be said that items exhibited for sale in the shop of Sara-Jane are
regarded as an invitation to treat.
Conclusion
Therefore, from the above discussion, it can be concluded that the bag was not offered for
sale.

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ILAC- 3
Issue
In this paper, the issue to be discussed is what essential elements are required for making
a valid contract.
Law
The contract implies an arrangement between two or more parties either a human being or
business organization to establish contractual obligations that are enforceable by law. To be a
lawful contract, it must include the following elements, such as:
 Offer;
 Acceptance;
 Intent to form legitimate relation; and
 Consideration.
The rights and interests of the contractual parties are protected by the English Contract
Law. As no codified contract law is available in Ireland, therefore the English Contract Law is
applied to protect the rights and interests of the parties. Common law and statutory law are
considered to be the primary sources of contract law. Common law is said to be the judge-made
laws and statutory law means the statutes of federal and state (Farry 2016).
Following English contract law, the four main elements need to be included in a
transaction to be a legal contract. A contract becomes either void or voidable without these four
components. Nonetheless, if the missing item in this non-existent agreement is provided, the
previous contract can become a valid contract (Stone 2005). The essential elements of a valid
contract are discussed below:

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1. Offer: Offer is considered to be one of the essential parts of a contract. To make a legally
binding contract, a valid offer is necessary. An offer is a guarantee that something is done
or not done in reasonably clear terms which someone else will accept. Offers should not
always be made to a single individual, but may be made to the entire world or other
groups of individuals (Hartog vs. Collins and Shields [1939] 3 AII ER 566).
2. Acceptance: Acceptance is considered to be the acid test of a valid contract. A legitimate
offer provides for a lawfully binding contract if without a condition the other party
accepts it. An acceptance must be clear-cut, absolute and certain. In Brodgen vs.
Metropolitan Railway Company [1877] 2 App. Cas. 666 the court held that acceptance
must be orally or in writing or using performance conveyed to the offeror by the offeree.
3. Intent to form legitimate relation: An enforceable contract does not take place unless
the parties consider their arrangement to have legal effect. The parties must have agreed
to grant a lawfully binding contract. In Parker vs. Clark's (1960) 1 W.L.R. 286 case,
the court held that a mere social arrangement cannot be considered to be a valid contract
because here the intention is not necessary.
4. Consideration: Money or cash is a central aspect of contract law, and the primary
justification for a negotiating party is that money is a profit that is to be shared between
the contractual parties. In Beswick vs. Beswick (1968) AC 58, (1967) 2 All ER 1197,
HL case the court held that consideration should not be satisfactory, but should be
appropriate.
Application
Sale of commodities takes place in the shop of Sara-Jane are not considered to be
contracted by applying the essentials of a valid contract.

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Conclusion
Therefore, it can be concluded that selling clothes is not a contract.

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Reference
Beale, H., Fauvarque-Cosson, B., Rutgers, J. and Vogenauer, S., 2019. Cases, materials and text
on contract law. Bloomsbury Publishing.
Clark, 2016. Contract Law in Ireland. 8th ed. Round Hall.
Enright, M., 2007. Principles of Irish Contract Law. Clarus.
Farry, 2016. Concise Contract Law. 2nd ed. Londsdale Law Publishing.
McDermott and McDermott, 2018. Contract Law. 2nd ed. Bloomsbury Professional.
Schwenzer, I., Hachem, P. and Kee, C., 2012. Global sales and contract law. Oxford University
Press.
Stone, R., 2005. The modern law of contract. Psychology Press.