Contract Law: Analysis of Contract Formation between Marlena and John

This contract law assignment analyzes a scenario involving Marlena and John to determine if a valid contract was formed. The assignment begins by defining the essential elements of a contract, including offer, acceptance, consideration, legal intention, and capacity, referencing relevant legal cases such as Harvey v Facey, Carlill v Carbolic Smoke Ball Co., and Crown v Clarke to illustrate these principles. The core of the analysis focuses on whether an agreement existed between Marlena, who offered to sell her car, and John. The assignment argues that while Marlena made a valid offer with a specified consideration, the lack of acceptance from John and the absence of legal intention prevented the formation of a binding contract. Therefore, the conclusion states that no contract was formed between the parties, emphasizing the crucial role of acceptance in contract law.

Running head: CONTRACT LAW
Contract law
Name of the Student
Name of the University
Author Note

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Table of Contents
Issue.................................................................................................................................................2
Rule..................................................................................................................................................2
Consideration...................................................................................................................................3
Application......................................................................................................................................4
Conclusion.......................................................................................................................................4
Reference List..................................................................................................................................5

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Issue
Whether a contract was formed between Marlena and John?
Rule
A contract is an agreement between two or more persons and is enforceable in the court
of law, In order to render a contract as valid it must include the following essential elements
(Poole, 2016).
Offer
The person making a proposal to another person to enter into a contract is called an offer and
the person is known as offeror as was held in Harvey v Facey [1893] UKPC 1. An offer is
different from an invitation to treat where an offer leads to a binding contract after acceptance,
an invitation to treat is said to be accepted only after performance as was established in Carlill v
Carbolic Smoke ball co. [1893] 1 QB 256.
Acceptance
The person to whom an offer is made is called the offeree and acceptance to such offer is
said to be made when the offeree agrees to such offer orally, either in writing or by conduct as
was held in Crown v Clarke [1927] 40 CLR 227. After a valid acceptance of an offer, a contract
becomes binding upon the contracting parties. Therefore, it is essential to determine the validity
of an acceptance to make the parties bound by the contract.
a) An acceptance must be communicated to the offeree as was held in Entorres v Miles Far
East [1955] 2 QB 327;

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b) The terms of acceptance must match the terms of the offer and silence does not amount to
an acceptance of an offer as was established in Felthouse v Bindley [1862] 142 ER 1037.
Consideration
Consideration is the price that the offeror stipulates to be made in exchange of the
promise made. Under the Common law, an agreement becomes binding upon the contracting
parties when there is a consideration (payment in some form) for the promise made as was held
in Australian Woolen Mills Pty Ltd v The Common wealth [1954] HCA 20.
Legal Intention
In order to render a contract as valid, it is important that the parties to the contract have
the legal intention to be bound the contractual terms and perform their respective contractual
obligations. The burden of proof is on the party seeking to establish the contract and the party
must establish the legal relationship existing between the parties (McKendrick, 2014).
Capacity
The parties to the contract must have the legal capacity to enter into agreements that is,
the contracting parties must establish that they do not fall under the category of person who lack
legal capacity to enter into the contract such as minors, persons of unsound mind etc
(McKendrick, 2014).
These elements must be present in order to establish that a contract has been formed
between ten parties. A void contract cannot be enforceable in the court of law.

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Application
In the given scenario, Marlena proposed to sell her car to John, which amount to an offer
as she has made a proposal to form a contract with John. She further offered to sell her car in
exchange of monetary value of $78000, which forms the consideration of the offer.
However, in Crown v Clarke it was held that to form a contract an acceptance of the offer
is mandatory to make the contract binding between the parties. In the given scenario, Marlena
made an offer but John did not accept her offer neither his conduct signified any acceptance.
Moreover, it is important to communicate the offer to the offeror as was ruled in
Entorres’s case which John did not communicate when the offer was made to him and stated
that he would talk about it later, thus, signifying non-acceptance of such offer.
Furthermore, this also implies that John did not have any legal intention to be bound by
the contract as well.
Therefore, it can be stated that in this case, the essential elements like acceptance, legal
intention was not present that does not render a contract as valid. Since acceptance is considered
as an agreement to the offer made and signifying a binding effect of the contract upon the parties,
it is mandatory to make form a contact. Although there is a valid offer and a valid consideration
promised by Marlena as the offeror to John in exchange of the car, lack of a valid acceptance
does not amount to a formation of a contract between the parties.
Conclusion
Therefore, it can be stated that no contract was formed between John and Marlena.

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Reference List
Australian Woolen Mills Pty Ltd v The Common wealth [1954] HCA 20.
Carlill v Carbolic Smoke ball co. [1893] 1 QB 256.
Crown v Clarke [1927] 40 CLR 227
Entorres v Miles Far East [1955] 2 QB 327;
Felthouse v Bindley [1862] 142 ER 1037.
Harvey v Facey [1893] UKPC 1.
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK).
Poole, J. (2016). Textbook on contract law. Oxford University Press.