University of Suffolk BA Business Law Essay: Contract Law Analysis

This essay, submitted by a student, provides a comprehensive overview of contract law, a crucial aspect of business operations. It begins by defining a contract and outlining the essential elements required for a valid and legally binding agreement, including offer, acceptance, and consideration. The essay then examines the UK court system, specifically focusing on the courts relevant to civil matters and contract disputes, and advises parties on which court to approach based on the nature of their claims. The essay also analyzes specific scenarios involving Hilary and three other individuals (Eleanor, Amy, and Olivia) to determine the existence of binding contracts, applying the principles of offer, acceptance, and revocation. Finally, the essay explores the various remedies available to parties under contract law, such as compensation, specific performance, and injunctions, providing a clear understanding of the legal recourse available in case of a contract breach. The essay concludes by emphasizing the significance of contract law in business and summarizing the key takeaways regarding contract formation and remedies.

INDIVIDUAL ESSAY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Define What Does Contract Mean and What are Various Essentials of a Valid Contract.....3
2. Explain the Existing Court System of UK and Advise the Parties to Which Court to
Approach.....................................................................................................................................5
3. Advise Hilary as to Whether Binding Contracts Exist Between Herself and Each of the
Following People: Eleanor, Amy and Olivia..............................................................................5
4. Explain the Various Remedies Available to the Parties Under Contract Law........................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The legislature has enacted various laws which governs a business and ensure that all the
activities related to the business must act in a smooth and efficient manner. The Law of
Contract is one such law which governs the business transactions. It determines the various
contractual obligations of the parties who are doing contract. In a business organisation every act
is done by making a contract. This contract can be either oral or written. The parties with whom
the business organisation enter into the contractual relationship can be its suppliers or its
customers. If any of the party breaches the contract, the party who has suffered the loss due to
that breach becomes entitled to get the compensation. While awarding the compensation the
court must see whether there was a valid contract existing between the contracting parties and for
determining this it will be seen that all the essentials of a legally binding contract is present in
that agreement or not. In this essay the focus will be mainly upon the essentials of a valid
contract and what all remedies are available to the contracting parties. Also certain facts will be
examined to find out whether there exists a legally binding contract or not.
MAIN BODY
1. Define What Does Contract Mean and What are Various Essentials of a Valid Contract
A contract is nothing but just an agreement which is Legally Binding upon all the
contracting parties and its breach will raise a Cause of Action through which the party who has
incurred the loss due to such breach will be entitled to claim the compensation. A person cannot
contract with himself, which means that while entering into a contract there must be 2 or more
persons between whom the contract will be made. The first necessary step which is also one of
the essential of a valid contract is Offer(Campbell, Mulcahy and Wheeler, 2017). The offer must
come from the side of offeror and not from any other person. While determining the validity of
the contract it should be taken into consideration whether the given offer amounts to an offer or
it is an “Invitation to Offer”. In the cases of Invitation to offer the person who saw such
invitation will make the offer. The court has given various judgements distinguishing between an
offer and invitation to offer. In the celebrated judgement of Fisher vs Bell the honourable court
stated that all the items which are displayed in a shop or a showroom will be considered as
invitation to offer. The person who wants to purchase those displayed items would be making the
offer to shopkeeper and now its the turn of the shopkeeper to whether accept the offer or not. The

next step which is also an essential while determining the validity of a contract is Acceptance.
When the offer has been made by the offeror the acceptance of such offer must come from
acceptor(Ceil, 2018). The acceptance can be either expressly or through any conduct. For
instance if Mr David makes an offer to Mr Smith that he wants to purchase Mr Smith's “Antique
Flower Pot” for $30. After receiving this offer Mr Smith sends his antique flower pot to Mr
David. Here although the acceptance was not made expressly but Mr Smith's conduct will
amount to acceptance by conduct. It is also necessary that the acceptance must be
communicated and that communication of the acceptance should be made through the
prescribed mode if any mode of acceptance has been given. For instance if Mr A has made an
offer to Mr B and in that offer only it has written that acceptance should be communicated by
post. The acceptance will be deemed complete and properly communicated only if the
acceptance has been sent through letter and not through any other mode such as on phone or
through mail. It is a general rule that an offeror can revoke the offer before the acceptance comes
to his knowledge whereas there is an exception to this rule when the acceptance has been sent by
the acceptor through postal method. In that case the contract will be deemed as complete when
the acceptor has put his acceptance in the mode of transmission. The next essential element for
forming a valid contract is presence of Consideration while entering into the
contract(Chandrika, 2016). The term consideration can be defined as any promise or any agreed
price on the basis of which the contract has been formed. It must be noted that there should be
some consideration present while forming the contract and on the ground that the amount of
consideration is inadequate the contract can be held invalid. For Example if Mr Rodger sells his
house for $5, the sale deed(which is also a contract) will not become invalid on the ground that
$5 is too less to sell a house.
The parties who will be entering into contract must possess the Intention to Enter into a
Legal Relationship with each other. If there is absence of intention of entering into a legal
relationship the agreement entered will not be considered as a valid contract. The landmark case
upon this is Balfour vs Balfour in which there was an agreement between husband and wife
which was later breached by the husband. The court here stated that as while making the husband
neither wife nor husband were having any intention to enter into legal relationship, hence no
valid contract was formed(Che Hashim, 2018).

Also the contract must not be made for any illegal purpose and contract should be made
for those things only which are certain in nature.
2. Explain the Existing Court System of UK and Advise the Parties to Which Court to Approach
The highest court in UK is Supreme Court of United Kingdom which was formed
through Constitutional Reform Act 2005. There are various existing jurisdictions in UK such
as Civil, Criminal, Family and various Tribunals. As this essay is related to the contract law
which is a part of civil law, various courts which deals in civil matters will be discussed. The
High Court has been divided among three divisions that are Queen's Bench Division, Chancery
Division and Family Division. Contractual matters are generally dealt by Queen's Division. The
County Court is also established to hear those cases which are less important and are having
less amount in dispute. Generally the appeal from High Court will go to Court of Appeal and
then Supreme Court which is the highest appellate court in UK.
The parties are advised to approach either County Court or Queen's Bench of High Court
on the basis of the compensation they claim(Knapp, Crystal and Prince, 2019).
3. Advise Hilary as to Whether Binding Contracts Exist Between Herself and Each of the
Following People: Eleanor, Amy and Olivia
Case 1: As earlier decided by the court in the case of Partridge vs Crittendon the
advertisement will be considered as invitation to offer. Here in the given problem also the
advertisement shown by Hilary was invitation to offer and the offer was given by Eleanor. On
this Hilary gave a counter offer. Again the offer came from the side of Hilary which was later on
rejected by Eleanor which means that the offer was not accepted, hence no valid contract exist
between both the parties.
Case 2: It is a settled principle of the contract law that the acceptance can't be revoked
after the letter of acceptance has posted. In the given facts also Amy has posted the letter of
acceptance and by applying the above principle it can be said that a valid contract has been
formed between Hilary and Amy at the time when the acceptance was posted by Amy. The
revocation of acceptance will be now deemed as breach of contract. This principle regarding the
postal rule has been evolved in the case of Entores Ltd vs Miles Far East Corporation(1955).
Case 3: In the given facts the notices which were put by Hilary were invitation to offer
and Olivia gave offer to Hilary regarding the purchase of the painting. The offer given by Olivia
was rejected by Hilary, hence no contract was formed between both the parties.

4. Explain the Various Remedies Available to the Parties Under Contract Law
Compensation: This is the most common remedy in which the court will award the
damages to the party who has suffered the loss due to the breach of contract. While awarding the
compensation to the party the court will consider that the loss incurred has been directly
connected to the breach and it was reasonably foreseeable. The compensation will be awarded
for the direct loss incurred and not for any incidental damage(Poole, 2016).
Specific Performance: There can be certain situations where the amount of
compensation will cannot be determined or the compensation is inadequate for the loss incurred.
In that case the court can order for the specific performance of the contract.
Injunction: The court can order interlocutory, prohibitory or mandatory injunction in
certain cases by restricting the party to breach the existing contract. By issuing of these
injunction the party who is going to breach the contract in future can't breach it(Siliquini-Cinelli
and Hutchison, 2019).
CONCLUSION
By the above essay it can be concluded that contract law is one of the most affecting
legislation which a business has to seriously follow. All the transactions of business are
completed through forming a contract only. While determining the validity of a contract it should
be seen that all the essentials of a contract must be present such as offer, acceptance and
consideration. Also in this essay various remedies available to the parties on the breach of
contract has been discussed such as compensation, Specific Performance and Injunction. Various
fact based studies were also examined by applying the principles of contract law in order to
determine whether a valid contract was existing between the parties or not.

REFERENCES
Books & Journals
Campbell, D., Mulcahy, L. and Wheeler, S. eds., 2017. Changing Concepts of Contract: Essays
in Honour of Ian Macneil. Springer.
Ceil, C., 2018. Business Analysis of'Conway Ltd'and Its Legal Case for Breach of Contract.
Available at SSRN 3521060.
Chandrika, M. P., 2016. A Comparative Analysis of UK and Indian Provision relating to
Intention under Law of Contract. International Journal of Law and Legal
Jurisprudence Studies. 3(4).
Che Hashim, R., 2018. Postal rule in acceptance via email. Commonwealth Law Bulletin. 44(1).
pp.111-127.
Knapp, C. L., Crystal, N. M. and Prince, H. G., 2019. Problems in contract law: Cases and
materials. Aspen Publishers.
Poole, J., 2016. Textbook on contract law. Oxford University Press.
Siliquini-Cinelli, L. and Hutchison, A., 2019. More Constitutional Dimensions of Contract Law.
Springer International Publishing.