Offer and acceptance Essay Example

?In Trevor’s case his issues derive from the Law of Contract; the formation of such and the external circumstances that effects formation, if these circumstances in fact render it void/voidable, breach of contract and the features of acceptance. Through the appropriate study and application of case law we shall better determine Trevor’s legal position. A contract denotes an agreement of two parties on the grounds of a set of obligations that must be honoured by both sides.

These obligations are ultimately enforceable by law and so the resulting parties are bound to the contract by law. This is also done voluntarily by each part. There is however, a difference in the formation of contract and an invitation to treat. Supermarkets and other shops advertise their stock on their shelves to entice the customer to buy. Upon picking up an item there is still no legal contract. The person in question still has to propose that they are willing to accept the invitation and produce ‘x’ amount of money to complete the offer for the item.

It is upon the cashier taking the money that the contract is formed. This notion is represented in the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1952 2 QB 795): Medication was being sold at boots self-service stores that was required by law to be overseen by a pharmaceutical specialist. As the sale of the medication was a contract, the court had to determine the point of formation (offer/acceptance) in order to decide whether or not Boots was breaking the law.

If the offer was defined as simply displaying the items on the store shelves and acceptance was taken in the action of the customer selecting the item, Boots would be not be complying with legislation as the supervisor existed at the checkout and not within the aisles of the store. It was ruled that this was incorrect, the acceptance occurred when the customer made their offer to trade money for such items. Adverts therefore exist as invitations to treat.

If a 30% sale is placed in the window of a shop, this means that the customer still has to come forth with their offer for selected items and can still be rejected by the shop. At any rate the terms of an advert are crucial. If a shop has an advert displaying the definite agreement of honouring customers whose actions adhere to the conditions of the advert, they have therefore made an ‘offer’ to contract. Thus are bound by legal obligations. Shown in the case of Carlill v Carbolic Smokeball Company (1893 1 QB 256): The carbolic Smokeball company advertised their product in a newspaper article displaying that they would pay ?

100 to compensate anyone who used their product following the guide precisely and proceeded to get the flu. Mrs Carlill having seen the advert invested in one of the Smokeballs, followed the set of instructions given and she still succumbed to flu. Arguing that the advert was not an offer, the company declined to pay Mrs Carlill the ? 100. It was administered that the way in which the advert had been phrased portrayed that of an offer, ultimately causing Mrs Carlill to react in such a way related to conditions of the advert.

‘If a person’s statements or actions disclose an intention to be bound it is an offer. If not it is an invitation to treat’. (Black, G. , (2010) p19 Woolman on contract) This case draws attention to the importance of clarity in the offer; it is the direct actions of Mrs Carlill from the advert that makes her viable for the ? 100. When an offer is accepted the parties involved are bound through this. In the period before an offer has been accepted by a person, the offeror can abjure it known as ‘locus poenitentiae – the right to withdraw’ (Macmillian.M & Lambie. S p57 Scottish Business Law). Unless the offeror has stated to withhold his right to withdraw within the offer.

This remains the only exemption which could cause conflict. Offers do however have a certain life span, and will be terminated if a response is not made in a reasonable time period. Revocation of an offer comes under two categories, implied and express. Implied revocation is an automatic juncture through the death of a party or refusal of the original offer itself.

Express is when actual communication has happened between the two parties to make aware of that the offer is no longer available. Counter offers have the effect of erasing the original offer at hand, and is no longer eligible for acceptance. This is conveyed in the case Wolf & Wolf v Forfar Potato Co Ltd (1984 SLT 100) where a Scottish company contacted a Dutch company through telex offering the sale of potatoes. Within the offer it stood that if they were to accept it must be made known before 5pm the following day.

The next morning the dutch company sent a telex which implied acceptance of the offer but with new conditions, the Scottish company then retorted by telephone that these conditions were unacceptable. The Dutch company proceeded to send another telex before 5pm accepting the conditions of the original offer which received no response from the Scottish company. The Dutch company attempted to seek damages for breach of contract. However it was ruled by the court that the first reply of the Dutch company was a counter offer, which irradiated the original offer resulting in their final acceptance to be of nothing.