Formation of a Contract

This is a question on contract law.

In order for their to be a contract the following things must be in place. An offer, this

is a promise to be legally bound on certain terms. This must not be confused with an

invitation to treat. An example of invitation to treat come from Fisher v Ball in which

a store keeper had a flick knife in his shop window. These flick knives were illegal to

sell and offer for sale. However the defendant said it was not an offer for sale but an

invitation to treat which was held by the courts. Also an offer must not be just a

statement of information. In a well known case one party the plaintiff telegrammed

the defendant for the value of his property. The plaintiff then responded saying they

would buy the property for that amount. The defendant refused to sell and the plaintiff

sued for breach however if was held that the defendant had merely supplied

information and had not made an offer.

It should be pointed out at this point that a contract is an agreement between two or

more people which is legally binding in law. Therefore by checking whether all the

essential element are within the agreement between the parties, we are able to

establish whether there is a contract. Also the offer must be capable of acceptance and

not too vague. This can be illustrated from the ratio decidendi from the case Carhill v

Carbolic Smoke Ball Co. in which the plaintiff purchased a smoke ball from the

defendant after reading the advertisement which stated that anyone who purchased the

smoke ball and used it as directed by the instruction could claim £100. The plaintiff

caught influenza and claimed her reward which the defendants refused to give her.

The plaintiff sued for breach of contract. The defendants agreed that the offer was too

vague and that an offer can't be made to the world. In the ratio decidendi the Lords

stated that an offer must be clear in language that is understandable and not too vague.

In the case the plaintiff succeeded and the defendant was found liable fo r breach of

contract.

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