Contract Law Case Study: Offer, Acceptance, and Contract Formation

This case study analyzes a contract law dispute concerning the sale of Dean's house, focusing on the principles of offer, acceptance, and contract formation. The analysis examines the initial invitation to treat, the counteroffer, and the requirement of a signature for a written contract. The student explores legal precedents like Hyde v Wrench and Holwell Securities v Hughes to determine whether a valid contract existed between Dean and Grant. The absence of a signature from both parties and Dean's right to revoke the offer before acceptance are also discussed. The conclusion supports Dean's decision to accept another offer due to the lack of a valid contract. The assignment uses relevant case laws and academic sources to support the arguments.

Running Head: CONTRACT 1
Commercial and Corporation Law
Student’s Name
Institutional Affiliation

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Question 2
Issues, Rule and Application
Dean's act of offering his house on the tender was an invitation to treat, which Grant
responded to by presenting to Dean an offer of $500,000.00 by tender for the house.
However, there arose a counter offer when Dean argued that the sum was inadequate and
negotiations which lead to the agreement on $600,000.00. The legal effect of this agreement
was that the initial offer by Grant was terminated as illustrated by Baele (2004) and Poole
(2014). This was clearly shown in the case of Hyde v Wrench (1840) where the defendant
offered to sell a piece of land to the complainant for 1,000 euros but the complainant later
wrote to the defendant offering to pay 950 9euros. When the defendant rejected the 950 euros
offer, the plaintiff accepted the initial 1000 euros offer but the defendant rejected it. Plaintiff
litigated for specific performance of the contract but the court decided that the original offer
was not available for acceptance since the counter offer of 950 euros had terminated it.
The requirement of a signature by Janet, Dean’s solicitor, implied that the contract
was a written contract which requires that both parties indicate acceptance of the contract by
signature as illustrated by Paul and Davies (2018). Therefore, despite the agreement and
shaking of hands by Dean and Grant, there were no contractual obligations imposed on either
of the parties until they had both signed the contract.
The offeror, Dean, had prescribed a condition for communication of acceptance by
way of signature. There was neither communication of acceptance nor a signature by Grant in
John's reply. Therefore, Grant had not accepted the offer and no contractual obligations
existing between the two. In the case of Holwell Securities v Hughes, (1974), the defendant
had offered his house for purchase within a period of six months by notice in writing. The
plaintiff posted a letter that was not received by the defendant and later raised an action of
specific performance. The decision was that no valid contract existed since the defendant had
to receive the communication for a contract to exist.
Turner (2014) stated that a signature is one of the formalities required in the
validation of written contracts. The act of shaking hands cannot be referred to as a proof of
consensus since it is cannot be relied upon for enforcement and genuineness of the contract.
The offeror, Dean had not specified a duration of time during which the offer was to stay

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open. And if he had prescribed a duration within which the offer is open for acceptance, he
can revoke it at any moment before the duration lapses (McKendrick and Liu, 2015).
This was held in the case of Dickinson v Dodds, (1874) where the defendant made an
offer to sell a house to the claimant on a Wednesday and the offer was open till Friday but it
was sold to a third party on Thursday. The plaintiff could not accept the offer on Friday
morning since the respondent had already withdrawn his offer by vending it to a third party.
Conclusion
Therefore, Dean is justified in his acceptance of Russel’s offer of $700,000.00 seeing
as there was no valid contract formed.

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References
Books
Baele, H. G. (2004). Chity on Contracts Volume 1. General Principles. London: Sweet &
Maxwell; Thomson Reuters
McKendrick, E., & Liu, Q. (2015). Contract Law: Australian Edition. Macmillan
International Higher Education.
Poole, J. (2014). Casebook on contract law. Oxford University Press, USA.
Paul S. Davies, P. S. (2018). JC Smith's the Law of Contract (2nd Edn). Oxford University
Press.
Turner, C. (2014). Unlocking Contract Law (4th Ed). New York: Routledge
Cases
Hyde v Wrench (1840) EWHC Ch J90
Holwell Securities v Hughes (1974)1 WLR 155
Dickinson v Dodds, 2 Ch D 463 (1876)