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Contract Law - Case Study Example

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This paper "Contract Law" discusses basic requirements for establishing a legally enforceable contract; namely offer, acceptance and consideration. Moreover, the parties entering into a contract must possess the legal capacity to do so and it can be surmised from the available facts…
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Contract Law
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Download file to see previous pages This expression of willingness can assume several forms, such as a facsimile, letter, electronic mail or a telephonic message. The intention is an objective consideration and in the case of Smith v, Hughes 4 relevant consideration was deemed to be the manner in which a reasonable person would view intention. Furthermore, the law distinguishes between an offer and an invitation to treat. The latter is not an offer but merely an indication of willingness to negotiate a contract.

An instance of this is provided by the case of Gibson v Manchester City Council5. In this case, the phrase may be prepared to sell was held to constitute an invitation to treat and not an offer. Indeed, the Gibson decision challenged the traditional view regarding the formation of a contractual agreement. In this case, Lord Denning asserted that in the process of ascertaining the presence of a binding contractual agreement, it could be contended that “there ...[was] no need to look for a strict offer and acceptance. You should look at the correspondence as a whole and at the conduct of the parties and see therefore whether the parties have come to an agreement on everything that was material6”.

However, there has been some uncertainty in this area of law as evidenced by the case of Carlill v Carbolic Smoke Ball Limited7. In this case, the defendant was the seller of a chemical, which he advertised in the Pall Mall Gazette. In this advertisement, he promised to pay £100 to anyone who contracted the flu virus, after using the smoke ball for two weeks. The defendant contended that the advertisement did not constitute an offer, and was merely an invitation to treat.

The Court of Appeal rejected this argument and held that there was a legally enforceable contract. The advertisement constituted an offer to the whole world and was capable of amounting to an offer of a unilateral contract without requiring acceptance. ...Download file to see next pagesRead More
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