The Rules of Offer and Acceptance in Contract Validity

This essay analyzes the rules of offer and acceptance in contract law, crucial for establishing contract validity. The essay examines a scenario involving Nikhil and Vicky, exploring whether an advertisement, a telephone call, and a letter constitute valid offers and acceptances. It delves into key legal concepts and case law, including Partridge v Crittenden, Carlill v Carbolic Smoke Ball, Harvey v Facey, and Bear Stearns Bank plc v Forum Global Equity Ltd, to determine if a binding contract was formed. The analysis considers the elements of an offer, distinguishing it from an invitation to treat or a request for information, and assesses the intention to create legal relations. The essay concludes that based on the facts presented, no valid contract was established between Nikhil and Vicky. The essay follows an ILAC structure and is fully referenced using the Harvard referencing style.

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The Rules of Offer and Acceptance in Establishing the Validity of a Contract
Student Name
Institutional affiliation

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Table of Legislation
Protection of Birds Act 1954
Table of Cases
Bear Stearns Bank plc v Forum Global Equity Ltd [2007] EWHC 1576 (Comm) All ER 103
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
Entores v Miles Far East Corp [1955] 2 QB 327
Harvey v Facey [1893] AC 552
Partridge v Crittenden [1968] 2 All ER 421
Pilbrow v Pearless de Rougemont & Co [1999] All ER 355
Storer v Manchester City Council [1974] 1 WLR 1403

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Table of Contents
Introduction......................................................................................................................................4
Valid contracts.................................................................................................................................4
Elements of a valid contract............................................................................................................4
Part I.................................................................................................................................................6
Issue.............................................................................................................................................6
Law..............................................................................................................................................6
Application..................................................................................................................................7
Conclusion...................................................................................................................................8
Part II...............................................................................................................................................8
Issue.............................................................................................................................................8
Law..............................................................................................................................................8
Application..................................................................................................................................8
Conclusion...................................................................................................................................9
Part III..............................................................................................................................................9
Issue.............................................................................................................................................9
Law..............................................................................................................................................9
Application................................................................................................................................10
Conclusion.................................................................................................................................10
Part IV............................................................................................................................................10
Issue...........................................................................................................................................10
Law............................................................................................................................................10
Application................................................................................................................................11
Conclusion.................................................................................................................................11
Part V.............................................................................................................................................11
Issue...........................................................................................................................................11
Law............................................................................................................................................11
Application................................................................................................................................11
Conclusion.................................................................................................................................12
General Conclusion.......................................................................................................................12
Bibliography..................................................................................................................................13

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Introduction
A contract is commonly defined as an agreement between two or more people that is bound by
the law.1 Contracts involve exchange of goods & services, money, or property. Contracts can be
written, oral, or conduct agreements. The “freedom of contract” grants parties to a contract to
choose whatever terms they want for the agreement to enforced.2 In a simple contract, the seller
makes an offer and the buyer retaliates through acceptance (he or she can reject the offer, but that
will not constitute a contract thus only acceptance is examined). What constitutes an offer? The
most important part of a legally binding contract is an offer; this is whereby one party “offeror”
presents the willingness to transact (offer) to the “offeree” who is potentially the acceptor of the
willingness to transact (offer).3 The part that proceeds an offer is acceptance. The offeree
displays unequivocal interests to the offeror’s transaction interests and effectively communicates
so to the offeror.4 This essay will examine the features of an offer and acceptance that make the
contract valid. A valid contract does not just entail one party offering to transact and the other
party accepts the offer. The extra mileage is the focus of this essay – the ultimate discussion on
an offer and acceptance.
Valid contracts
In the case of Nikhil and Vicky, it is necessary to determine if the conversation amounted to a
contractual agreement. Was there a valid contract?
Elements of a valid contract
For a contract to be valid, certain features must be present: “
 Offer
 Acceptance
1 Janet O'Sullivan. O'Sullivan and Hilliard's the Law of Contract (8th edn, Oxford University Press 2018)
2 Richard Stone and James Devenney. The modern law of contract (12th edn, Routledge 2017).
3 Kat Kadian-Baumeyer, "What Is an Offer in Contract Law? - Video & Lesson Transcript | Study.Com"
(Study.Com., 2019) <https://study.com/academy/lesson/what-is-an-offer-in-contract-law.html.> Accessed May 27
2019.
4 Billy Sexton, “Contract Law – Offer & Acceptance” (AllAboutLaw.co.uk, 2016)
<https://www.allaboutlaw.co.uk/stage/study-help/contract-law-offer-acceptance> Accessed May 27 2019.

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 Consideration
 Intention to enter into a legal contract
 Certainty
 Formality.”5
The first two elements amount to an agreement already; the proceeding features are only
necessary after an agreement is established. In this case, it has to be established that there was an
agreement between Nikhil and Vicky. Therefore, only the offer and acceptance elements are
considered in this essay. In the case of Storer v Manchester City Council [1974], it was outlined
that, “An offer is:
 an expression of willingness to contract on specified terms
 with the intention that it is to be binding once accepted.”6
The case confirmed that the court has to take an unprejudiced approach when assessing the
availability of the conditions that constitute an offer. The defendant had declined to proceed with
a contract that the predecessor had formed with the claimant. The council cited that the date
which the claimant was to commence tenancy had not been included on the forms thereby
making the contract incomplete. According to Lord Denning there is a way of establishing the
presence of an offer. He states that:
“In contracts, you do not look into the actual intent in a man’s mind. You look at what he said
and did. A contract is formed when there is, to all outward appearances, a contract” (p. 827).7
Part I
Issue
The first issue relating to Nikhil and Vicky is whether the advertisement on the van amounts to a
valid offer.
5 Ashley Camarneiro, "The Elements of a Valid Contract - Lawdepot Blog" (Lawdepot Blog., 2018)
<https://www.lawdepot.com/blog/the-elements-of-a-valid-contract/.> Accessed May 27 2019.
6 Storer v Manchester City Council [1974] 1 WLR 1403
7 "Storer V Manchester City Council: CA 1974 - Swarb.Co.Uk" (Swarb.Co.Uk., 2019) <https://swarb.co.uk/storer-v-
manchester-city-council-ca-1974/.> Accessed May 27 2019.

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Law
The case of Partridge v Crittenden [1968], a general rule that advertisements do not amount to
offers, but they are rather mere invitations to treat. The “multi-acceptance” principle rules out
any possibility of categorizing an advertisement under offers.8 Theoretically, if advertisements
were to be regarded as offers, many people could make the acceptance for that one offer
(advertisement). A lot of obvious difficulties will be created by the fact that the advertisement
was for limited goods. The seller (offeror) will end up breaching the contract will every
individual that he or she could not satisfy their needs by failing to avail the goods required.
Moreover, advertisements do not fulfill the necessary requirements for an offer established in the
case of Storer v Manchester City Council. The unequivocal intention to contract is not evident in
an advertisement.9 Reasonably, it cannot be said that the person advertising the good or service
intends to enter a contractual obligation with anybody who reacts to the advert. The exceptions to
the general rule on advertisement include unilateral contracts, advertisements by manufacturers
(however, this could only be a factor for consideration by a court of law), and any advert that
negates the “multi-acceptance” rule like a statement indicating “first come first served”.
Specifically, the Carlill v Carbolic Smoke Ball Co Ltd [1893] case is an example of a unilateral
contract. It is necessary to examine the ways in which that particular advertisement varies with
the advert in Partridge v Crittenden.
In the Carlill case, the defendant promised to pay a reward of £100 to any person who used the
Carbolic Smoke Ball for specific period of time but still ended up contracting influenza.10 The
defendant also went to the extent of depositing £1000 in the bank for purposes of fulfilling the
rewards for anyone who met the requirements of the advert. The fact that the obligations were
placed on one party makes it a unilateral contract. No one was forced to buy the smoke ball, but
anyone who fulfilled the requirements had to receive the £100 reward. The deposition of £1000
for purposes of fulfilling the reward meant that the defendant had clear intentions of contracting
thus summing up the advert as an offer.
8 Partridge v Crittenden [1968] 2 All ER 421
9 Ken LaMance, "Invitation to Treat Lawyers" (Legalmatch Law Library, 2006) <https://www.legalmatch.com/law-
library/article/invitation-to-treat.html.> Accessed May 27 2019.
10 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1

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In the Partridge case, the defendant “advertised for sale” Bramblefinch cocks and hens for a price
of Sh. 25 each.11 The “Royal Society for the Prevention of Cruelty to Animals” (RSPCA) sued
the defendant on the basis that he violated the “Protection of Birds Act 1954” which prohibited
sale of wild birds.12 Does the advertisement for “offer for sale” amount to an offer? The court
ruled that the phrase “offer for sale” was relative and this context represented an invitation to
treat. The major difference between the Carlill case and the Partridge case is the clear display of
the intent to contract portrayed in the former case. The latter case lacks that clear intent thereby
making it an invitation to treat. The Partridge case also makes room for unlimited offers, there is
no certainty of a contractual relationship to be formed, and there is room for negotiation. The
said factors are exactly opposite in the Carlill case.
Application
Nikhil’s advertisement does not constitute a specific performance by a party established in the
Carlill case that would make it a unilateral offer. By virtue of being an advertisement, the advert
by Nikhil is already classified as an invitation to treat as stipulated in the Partridge case. The
unequivocal intention established by the Storer v MCC case is not present in Nikhil’s advert. The
creates room for negotiation, is open to a number of offers, lacks certainty, and the request for
information by Vicky sums it up as an invitation to treat.
Conclusion
There is no valid offer created by Nikhil’s advertisement; it is an invitation to treat.
Part II
Issue
The second issue relating to Nikhil and Vicky is whether the telephone call by Vicky resulted to
an offer.
11 Partridge v Crittenden [1968] 2 All ER 421
12 Protection of Birds Act 1954

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Law
The case of Harvey v Facey [1893] establishes the difference between an offer and a request for
information.13 In the Harvey case, the claimant sent a Telegram to the defendant requesting if the
Facey could sell the Bumper Hall Pen at the lowest price. The defendant replied via Telegram
indicating that the lowest price for the Bumper Hall Pen was £900. The claimant replied that they
had agreed to purchase the Bumper Hall Pen at the price asked for by the defendant and thus
requested that the title deed be sent immediately. However, it is clear that Facey did not respond
to Harvey’s message as an offer but rather as a request for information. The defendant merely
responded to the lowest price of the Bumper Hall Pen and not to the question of whether he
would sell. There is not clear display of Facey’s intention to make an offer. In that case, the
claimant made an inquiry for the lowest price and whether the defendant would sell. Asking for
clarification is distinct from making an offer. An offer is the promise to transact with another
party in exchange for a particular performance by that party.14
Application
To begin with, does Vicky’s request satisfy the definition of an offer? The definition requires the
seller to make an offer that the buyer has to agree to in order to constitute an agreement. In this
case, Nikhil did not make a promise to exchange in respect to Vicky’s performance. What Nikhil
did was merely a response to Vicky’s inquiry on the Van’s lowest price and whether he would
keep the offer open for a few days. Nikhil responded by saying that the lowest price of the van
was £4,000 and that the offer to sell at that price would be open up to 7th March. As ruled in the
case of Harvey v Facey, a mere response to a request for information is not an offer.
Conclusion
Vicky did not make an offer, but rather requested for information about the sale of the van from
Nikhil.
13 Harvey v Facey [1893] AC 552
14 Kat Kadian-Baumeyer, "What Is an Offer in Contract Law? - Video & Lesson Transcript | Study.Com"
(Study.Com., 2019) <https://study.com/academy/lesson/what-is-an-offer-in-contract-law.html.> Accessed May 27
2019.

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Part III
Issue
The send issue is whether the letter sent by Vicky to Nikhil can be categorized as a valid offer to
buy the van at £4,000.
Law
In the Bear Stearns v Forum Global Equity Ltd [2007], it was held that “my word is my bond”.15
The case involved loan notes of the distressed debt of Parmalat group. The defendant acquired
the loan notes and requested to be listed as Parmalat’s creditor. The discussion for the transaction
commenced via a telephone call whereby an agreement worth €2.9 million was reached at.
However, not all the terms of the agreement were clarified. The date of the settlement was not
indicated. There was also no recording that would act as evidence of the transaction. Forum
Global later argued that they did not intend to complete the transaction (considering that
important parts of the agreement were deferred) and the claimant sued. The court held that even
though the parties had only agreed to make an agreement and deferred some terms, there was a
binding contract in action. The essence of the contract (the price) had already been agreed on.16
An offer is a promise to exchange with the performance of the other party.17
Application
Based on the judgement in the Bear Stearns case, one’s word is the person’s bond. Nikhil had
said that he would sell the van at a price of £4,000 and would keep the offer open up to 7th
March. Vicky sent the letter based on Nikhil’s word. Besides what is the essence of a contract?
The price. However, in this case Nikhil’s word cannot be used as bond because he did not make
a promise but rather responded to Vicky’s inquiry. An offer does not entail a mere word but
rather a promise which lacks in Nikhil’s response.
15 Bear Stearns Bank plc v Forum Global Equity Ltd [2007] EWHC 1576 (Comm) All ER 103
16 Bear Stearns Bank plc v Forum Global Equity Ltd [2007] EWHC 1576 (Comm) All ER 103
17 Kat Kadian-Baumeyer, "What Is an Offer in Contract Law? - Video & Lesson Transcript | Study.Com"
(Study.Com., 2019) <https://study.com/academy/lesson/what-is-an-offer-in-contract-law.html.> Accessed May 27
2019.

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Conclusion
The letter by Vicky would not amount to a valid offer.
Part IV
Issue
The fourth issue is whether the communication by Nikhil to Vicky indicating that the van had
already been sold amounts to a valid acceptance.
Law
In the case of Entores v Miles [1955], the claimant sent an offer via telex to the defendant to buy
100 tons of copper cathodes.18 The defendant responded via telex (acceptance). When the
agreement was not fulfilled, the claimant sued for damages. The court sought to establish the
moment when acceptance is satisfied. It was held since telex is instantaneous, acceptance is
fulfilled when the message is received.19
Application
Based on the ruling of the Entores case, acceptance in the issue between Nikhil and Vicky would
be established the moment Vicky received Nikhil’s text message. The postal rule is not
applicable even though Vicky sent a letter since the acceptance was done via a text message
which is instantaneous. At that time, Nikhil had already sold the van.
Conclusion
There is no valid acceptance.
18 Entores v Miles Far East Corp [1955] 2 QB 327
19 Billy Sexton, “Contract Law – Offer & Acceptance” (AllAboutLaw.co.uk, 2016)
<https://www.allaboutlaw.co.uk/stage/study-help/contract-law-offer-acceptance> Accessed May 27 2019.

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Part V
Issue
The final issue is whether there is breach of contract by Nikhil and whether there are remedies
available to Vicky.
Law
In the case of Pilbrow v Pearless de Rougemont & Co [1999], it was held that, “A firm of
solicitors which is asked for a solicitor and, without telling the client that the advisor is not a
solicitor, provides an advisor who is not a solicitor should not be entitled to recover anything.”20
The claimant had asked for a solicitor but instead was given an unqualified advisor. Even if the
claimant is not directly affected by the breach, the defendant has broken the rules of practice.
Application
According to the Pilbrow case, the breach has to be in line with the services the person was
obligated to provide.21 In this case, it is necessary to establish that Nikhil was obligated to
contract with Vicky. Nikhil merely responded to Vicky’s inquiry on the sale of the van; that did
not create an obligation.
Conclusion
There is no breach of contract or ay remedy available to Vicky since there was no obligation to
contract created.
General Conclusion
There is no valid contract between Nikhil and Vicky. This is because there is no valid offer or
acceptance by both parties. The two most important parts of a valid contract are the offer and
acceptance.
20 Pilbrow v Pearless de Rougemont & Co [1999] All ER 355
21 Leigh Ellis, "Breach of Contract: Law, Consequences, Remedies and Legal Claims" (Hallellis.Co.Uk., 2019)
<https://hallellis.co.uk/blog/breach-contract-business-agreements/.> Accessed May 27 2019.

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