Lecture notes for Contract Law - formation of a contract
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Course
Dispute Resolution in Contract Law
Institution
Sheffield Hallam University (SHU)
This document covers 4 weeks worth of lecture notes surrounding contract law and the specific content regarding the formation of a legally binding contract. It contains information with case studies to back each 4 key elements that constitute a contract: 1)offer, 2)acceptance, 3)consideration, 4)in...
Lecture 2 – Formation: Offer
5th October 2022
Key 4 elements that must be present for a contract to be legally binding.
1. Offer – set of terms/promise that are clear certain and proposed to the
offeree.
2. Acceptance – Person must accept the offer without any amendments.
Similarly like a mirror reflection.
3. Consideration – a form of exchange, whether this be a promise,
exchange of services etc. Must do something for the exchange.
4. Intention to Create Legal Relations - Intention must be proposed in order
for us to perceive this as a legal contract. This is looked at from an
objective view.
Offer
A Contractual offer is an expression of willingness to contract, made with the
intention that it shall become binding upon the person making, as soon as it is
accepted by the person to whom it is addressed. - Air Transworld Ltd V Bombardier
2012
Contractual offer – capable of acceptance and is binding with legal force.
Invitation to treat – not capable of acceptance, inviting offers only.
The objective approach.
"If, whatever a man's real intention may be, he so conducts himself that a reasonable
man would believe that he was assenting to the terms proposed...the man thus
conducting himself would be equally bound as if he had intended to agree to the
other party's terms."- Smith v Hughes 1871
Carlil v Carbolic Smoke Ball Co 1893 – This case was an advert and adverts
aren’t contractual offers particularly. In this case where an advert proposed a reward
for performing actions, however the courts stated that the advert was sufficiently
clear of an offer and the fact Smoke Ball put £1000 pounds in bank, showed the
intention that this was to be legally bound. The Ratio would then be that the advert
met the key elements for this to be a contractual offer.
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd
– This was an issue with the legislation of the Pharmacy and poisons act. ‘It shall not
be lawful...for a person to sell any poison included in Part I of the Poisons List,
unless...the sale is effected by, or under the supervision of, a registered pharmacist."
(18(1)(a)(iii) of the Pharmacy and Poisons Act. Products on a shelf are invitations to
treat, however offers are being made when someone goes to purchase the item as
that is where the choice of exchange is. The Ratio from this case would then be that
goods on the shelf are invitations to treat only.
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