Contract Law (Introduction to Business Law) - Essay Example

s to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed, the “offeree.3” The “expression4” may take different forms. The intention element is an objective consideration and the case of Smith v Hughes 5emphasised the relevant consideration as being a focus on how a reasonable person would view the situation. Seddon et al further assert that the “test for existence and the scope for an agreement is that of an objective manner.

When a test is objective, it takes account of what the parties actually did say in order to make an offer and agreement6”. Moreover, in the case of Storer v Manchester City Council7 it was asserted by Lord Denning that “a man cannot get out of a contract by saying: I did not intend to contract” if by his words he has done so”8. Furthermore, in the case of Acme Grain Co. v Wenaus 9it was asserted: “to constitute a contract, there must be an offer by one person to another and an acceptance of that offer by the person to whom it is made.

A mere statement of a person’s intention or a declaration of his willingness to enter into negotiations is not an offer and cannot be accepted so as to form a valid contract10”. Additionally, the law distinguishes between an offer and an invitation to treat, which is not an offer but an indication of willingness to negotiate a contract11. For example, in the case of Gibson v Manchester City Council12, the words “may be prepared to sell” constituted an invitation to treat and not a distinct offer.

Indeed, the Gibson decision challenged the traditional view for formation of contractual agreement. In this case, Lord Denning asserted that when considering whether there is a binding contractual agreement, it could be argued that: “there is no need to look for strict offer and acceptance. You should look at the correspondence as a whole and at the conduct of the parties and see therefore