Contract Law Assignment: Ian vs Amy - Case Study Analysis

This case study examines whether a contract was formed between Ian and Amy. The assignment analyzes the elements of a contract, including offer, acceptance, and consideration, within the context of a scenario involving the sale of a dog. The student argues that the advertisement on Faceb...Read More

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Issue
Whether a contract was formed between Ian and Amy in this case, or not? Whether Ian has any
remedies on the basis of facts give, or not?
Rule
A contract is a promise which takes place between two or a higher number of parties and which
involves one party doing a particular thing and the other party paying the promised consideration
(Clarke and Clarke, 2016). A contract has two formation methods, i.e., the oral manner and the
written manner. In the oral form, the stipulations of the contract are traded and told in a spoken
way; and in a written form, the contractual stipulations are properly declared on a document,
which the contracting parties sign (Lambiris and Griffin, 2016). For creating a contract, it is
crucial that certain specific elements are covered under it. These elements include the offer, the
acceptance, the consideration, intent, clarity, consent and capacity. Even if one of these elements
is missing, a legally binding contract is not created (Ayres and Klass, 2012).
Offer is the first stage in contract formation as per which one of the parties has to offer certain
terms to the other party. There is a stark divergence amid an offer and an invitation of treat
(Andrews, 2015). The former symbolizes the objective of the contracting parties to form lawful
relations, whilst the latter symbolizes the objective of the contracting parties to initiate
negotiations. The facts of a particular case decide if an offer has been made or an invitation of
treat was present (Latimer, 2012). In Harvey v Facey [1893] AC 552, the court gave the
statement that a request for information is not an offer (Poole, 2016). And in Gibson v

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Manchester City Council [1979] UKHL 6, it was stated that “may be prepared to sell” had to be
taken as an announcement of prices instead of being treated as a distinctive offer as it
supplemented the original offer (British and Irish Legal Information Institute, 2017).
Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401 was a case where the judges
held that the goods which are kept on the shelf in a particular shop are an invitation to treat and
not an offer. So, the seller is not under the obligation to sell the product to the buyer, till the time
they pick the goods and take it for billing (Swarb, 2016). The adverts of newspapers and
magazines are also deemed as invitation to treat in general, as was seen in Partridge v Crittenden
[1968] 1 WLR 1204 (E-Law Resources 2017a). Though, where the advert is such, which can be
accepted by the reader, by merely acting upon it, it is considered as an offer, as was seen in
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 (E-Law Resources, 2017b).
Upon the offer being made, there is a need to obtain acceptance on the offer that has been
forwarded. Further, the acceptance needs to be submitted by such party to which the offeree
made the offerr. And the next requirement is that the offer has to be accepted exactly in the
manner in which it was made (Mulcahy, 2008). If there is a alteration in the communication
which is sent as acceptance and in the terms of offer made, the communication would be taken to
be a counter offer, and not an offer. This was seen when the matter of Hyde v. Wrench (1840) 3
Beav 334 was brought before court (Marson and Ferris, 2015). And once this happens, the
original offer expires. In Felthouse v Bindley (1862) EWHC CP J 35, it was provided that mere
silence would not be deemed as acceptance (Stone and Devenney, 2017).
The acceptance date is taken to be such date on which the message of acceptance arrives before
the offer making party. But, for emails, the Electronic Transactions Act, 1999 (Cth) applies.

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Section 14 of this act specifically states that the date on which the email leaves the device of the
sender is to be taken as the date of offer or acceptance (Federal Register of Legislation, 2011).
This is aligned with the postal rules of acceptance where the sending date is the acceptance date
and the date of actual receipt is irrelevant (Blum, 2007).
Once the offer and acceptance are obtained, and the other elements of contract are proved to be
present, a lawfully binding contract is formed. In case a party to contract falls short in fulfilling
the promise which was contained in the contract, the contract is considered to have been
breached (Abbott, Pendlebury and Wardman, 2007). And in such situation, the aggrieved party
gets the option of initiating a legal claim against the breaching party and get equitable or
monetary damages. The monetary damages are in form of compensation and the equitable
damages give the options of specific performance of the contract, getting the contract rescinded,
or obtaining an injunction order to stop the other party from doing something (Elliot, 2011). The
court, in Addis v Gramophone [1909] AC 488 provided that the purpose of presenting damages
was to put the aggrieved party in a position where they would have reached by proper
performance of contract by breaching party, instead of punishing the breaching party (E-Law
Resources, 2017c).
Application
In the given case study, the advertisement which was placed over the Facebook page of Amy
would be deemed as an invitation to treat as it invited interests of the people; thus opening up the
scope for negotiations. This is also because unlike Carlill v Carbolic Smoke Ball Company, this
advert did not contain a unilateral offer which could be simply acted upon. And so, based on
Partridge v Crittenden, this would be an invitation to treat. As this is an invitation to treat instead

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the same being an offer, Amy was not obliged to make the sale of dog to Ian, on the basis of
Pharmaceutical Society of Great Britain v Boots.
The communication which was sent by Ian on the same day, where he further inquired about the
address would be deemed as a request of information based on Harvey v Facey. This is because
here he requested the information regarding the address and expressed his desire to purchase the
dog. The providing of address would also be deemed as pre-contractual negotiations. The offer
was made when Ian emailed about picking the dog up on Friday 5 pm. This is the stage where
the contract formation started. However, an acceptance was never obtained for this offer as Amy
stayed silent on it. And Felthouse v Bindley clearly provides that silence is not acceptance. The
absence of acceptance would mean that a contract could not be created between Ian and Amy
and thus, a breach of contract by Ian, cannot be claimed, for selling the dog to Judy.
Conclusion
It can be concluding from this discussion that a contract was not created between Ian and Amy
and so Ian has no remedies for breach of contract.

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References
Abbott, K., Pendlebury, N., and Wardman, K. (2007) Business Law. 8th ed. London: Thomson.
Andrews, N. (2015) Contract Law. 2nd ed. UK: Cambridge University Press
Ayres, I., and Klass, G. (2012) Studies in Contract Law. 8th ed. New York: Foundation Press
Blum, B.A. (2007) Contracts: Examples & Explanations. 4th ed. New York: Aspen Publishers.
British and Irish Legal Information Institute. (2017) Gibson v Manchester City Council [1979]
UKHL 6 (08 March 1979). [Online] British and Irish Legal Information Institute. Available
from: http://www.bailii.org/uk/cases/UKHL/1979/6.html [Accessed on: 26/08/17]
Clarke, P., and Clarke, J (2016) Contract Law: Commentaries, Cases and Perspectives. 3rd ed.
South Melbourne: Oxford University Press.
E-Law Resources. (2017a) Partridge v Crittenden (1968) 2 All ER 421. [Online] E-Law
Resources. Available from: http://www.e-lawresources.co.uk/Partridge-v-Crittenden.php
[Accessed on: 26/08/17]
E-Law Resources. (2017b) Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 Court of Appeal.
[Online] E-Law Resources. Available from: http://www.e-lawresources.co.uk/Carlill-v-Carbolic-
Smoke-Ball-Co.php [Accessed on: 26/08/17]
E-Law Resources. (2017c) Addis v Gramophone [1909] AC 488 House of Lords. [Online] E-
Law Resources. Available from: http://e-lawresources.co.uk/cases/Addis-v-Gramophone.php
[Accessed on: 26/08/17]

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Elliot, C. (2011) Contract Law. 8th ed. London: Pearson.
Federal Register of Legislation. (2011) Electronic Transactions Act 1999. [Online] Federal
Register of Legislation. Available from: https://www.legislation.gov.au/Details/C2011C00445
[Accessed on: 26/08/17]
Lambiris, M., and Griffin, L. (2016) First Principles of Business Law 2016. Sydney: CCH.
Latimer, P. (2012) Australian Business Law 2012. 31st ed. Sydney, NSW: CCH Australia
Limited.
Marson, J., and Ferris, K. (2015) Business Law. 4th ed. Oxford: Oxford University Press.
Mulcahy, L. (2008) Contract Law in Perspective. 5th ed. Oxon: Routledge.
Poole, J. (2016) Textbook on Contract Law. 13th ed. Oxford: Oxford University Press.
Stone, R., and Devenney, J. (2017) The Modern Law of Contract. 12th ed. Oxon: Routledge.
Swarb. (2016) Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd:
CA 5 Feb 1953. [Online] Swarb. Available from: http://swarb.co.uk/pharmaceutical-society-of-
great-britain-v-boots-cash-chemists-southern-ltd-ca-5-feb-1953/ [Accessed on: 26/08/17]