LAW

1. SAILESH-{2605043}
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2. TABLE OF CONTAINS
1. Introduction............................................................................................................3
2. Contract...................................................................................................................3
3. Contract Law............................................................................................................4
4. Offer.........................................................................................................................4
5. Acceptance................................................................................................................5
6. Invitation to Treat.....................................................................................................6
7. Consideration............................................................................................................7
8. Intention to create legal relation................................................................................7
Case study
9. Offer…..…………………………………………………………………………………..9
10. Acceptance………………………………………………………………………………10
11. Consideration………………………………………………………………………...…11
12. Intention to Create Legal Relations……………………………………………...........12
13. Conclusion……………………………………………………………………………….13
14. References……………………………………………………………………………….14
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3. 1. Introduction
The assignment discusses about the three companies Plumbing and Lighting Concepts Plc.,
Superiors Contractors Ltd and Exceptional Builders and the problem arose between them as
they went into different contract. Plumbing and Lighting Concepts Plc was specialized in
supplying of difficult- to - locate plumbing and light fixtures for contractures that then, use
for complex construction jobs. Likewise, the second and third party of the case are superior
contracture and exceptional builders; they are the contractures who remodel the house.
Therefore, in this case of Plumbing and Lighting concepts Plc, Superiors Contractors and
Exceptional Builders there is a presence of contract, offer and acceptance, invitation to treat,
consideration, intention to create legal relation, which are defined as follows:
2. Contract
“A contract may be defined as an agreement which is either enforced by law or recognised by
law as affecting the legal rights or duties of the parties” (G.H.Treitel, 2004). Forming a
contract is our basic and everyday experience of our life. We make a contract to purchase,
and sometimes to sell, goods and services. However, the question is how does the law support
and regulate this common activity? First, it has to explain the contract that contract law
applies to. Although the common law offers no formal definition of a contract, textbooks
generally define a contract as an enforceable promise or agreement(Chen-Wishart, 2012).
The following are the elements of contract:
Promise: The focus here is one-sided. It emphasised the seriousness of the undertaking given by the promisor
Agreement: The focus here is bilateral or multi-lateral. This emphasises the consensus
between the contract parties as to the future rights and liabilities.
Recognition by the law
Recognition by the law can be understood in two senses, that;
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4. i) It is the state which provides the legal apparatus to enforce contract, without this
contracts between strangers would not be as numerous and common as they are,
nor play such a central role in a capitalist economy.
ii) Whatever the parties intend, if a disagreement lands the parties in court, it is
contract law that determines
a. Whether, when, and what the parties have agreed
b. Whether one party can escape from the contract
c. How breach should be remedied and
d. What happens when the contract is silent or uncertain on a disputed matter
3. Contract law
It is defined, as 'promises or agreement recognised by the law 'is circular, since' promises or
agreement are only identifiable as such through the process of legal analysis. Contract does
not exist outside the law like 'things' or physical objects that can be perceived by the senses.
They are themselves abstract concepts, just as much the concept of contract itself' (ChenWishart, 2012). For example, the law reckons certain conduct, such as singing a document, as
showing agreement to be bound by its contents, irrespective of the singer's knowledge,
understanding, or intention in respect of it. It is contract law as moulded and applied by the
court that defines how the practice of making agreements should be conducted, how the
contracting game should be played. According to the, Aston contract law is defined as "that
branch of the law which determines the circumstances in which a promise shall be legally
binding on the person making it"(Chen-Wishart, 2012).
Typically, in order to be enforceable, a contract must involve the elements as offer and
acceptance, consideration and legal bindings (2012).
4. Offer
The contractual notion of offer may be explained as an act by which the offeror (the party
making the offer) confers on the offeree (the recipient of the offer) the capability or power to
create a legally binding agreement between the two of them by the doing of a further act
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5. something to an acceptance. The contract is complete once the offeree accepts the offer
(Gillies, 2004).
The offer must be go along with an intention to be legally bound. It must communicate the
proposed terms of the contract including those relating to consideration. These terms become
alive in the resulting contract, assuming that there is acceptance but the offer must be
communicated to the offeree and only the offeree can accepts. For example, a shopkeeper
display a cloth for $ 150 so, in here a shopkeeper (offeror) and he is only offering cloths to all
customers a price of $150 and if a customer (offeree) agrees to buy a cloth for $150 (i.e. the
acceptance) then they form a contract. Whereas, if the offeree asks the offeror to buy cloths in
$100 instead then is called counter offer and counter offer is not contract until there is
presence of acceptance.
5. Acceptance
Once the person to whom the offer is made responds with the unconditional acceptance than
the binding contract take place between two parties. However, once the people whom the
offer is made bring any new terms of condition or any proposed term in the letter of
acceptance then there cannot be an acceptance of an offer(Ramsey & Limited, 2007).
Moreover, the acceptance is not binding if the offeror knows that the offeree was mistaken as
to the offer. Furthermore, once the acceptance is bind between two parties then its shuts door
on the contract “room” neither party can get out or vary its contents. In addition, a valid
acceptance must correspond with the offer, be given in response to the offer, be made by an
appropriate method, and be communicated to the offeror (Chen-Wishart, 2007).
For
example, PSGB v Boots (1953) the defendants shop was adapted to the "self-service "system.
The question for the court of appel was whether the sales of certain drugs were effected by or
under the supervision of a registered pharmacist. The question was answered in the
affirmative. Somervell LJ stated that " in the case of an ordinary shop, although goods are
displayed and it is intended that customers should go and choose what they want, the contract
is not completed until, the customer having indicated the articles which he needs, the
shopkeeper, or someone on his behalfm accepts that offer, then the contract is
completed.(Asif T,2012)
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6. 6. Invitation to treat
"An invitation to treat is a mere declaration of willingness to enter into negotiation, it is not
an offer, and cannot be accepted so as to form a binding contract"(Halsburry, 2007). An offer
must be clear, unequivocal, and direct approach to another party to contract. For example
advertisements, catalogues or store flyers and for sale sign in the used car are not a offer.
According to the law, these are called invitation to treat, eventually invitations to the general
public to make an offer on a particular item. But, even here, there have been exceptions. For
example, in a 1856 case, an advertisement of train rates was held to be a valid offer. Much
depends on the wording of the invitation(Halsburry, 2007).
An invitation to treat is simply an announcement to other that a person is prepared to
entertain an offer for a certain thing or service. The invitation to treat may provide minimal
terms of proposed offer.
Furthermore, "As general rule, a display of goods at a fixed price in a shop window or on a
shelf in a self-service store is an invitation to treat and not an offer. A prospective buyer may
make an offer. At this stage the retailer may accept or reject that offer"(Halsburry, 2007).
"Similar principal would seem to apply where a supplier of goods or services indicates their
availability on a website, that is , the offer would seem to come from the customers when he
clicks the appropriate button and it is then open to the supplier to accept or reject that
offer"(Halsburry, 2007).
For example in the case the plumbing and the lighting concepts plc send the five letter to the
contractors located in the England stating that we have cornered the market for a source of
brass wall hanging light fixtures. These fixtures are in such great demand that they are nearly
impossible to obtain. If you are willing to take all you needs from us, we will guarantee
delivery at Stg£20.00 each. Now this is not an offer, this is just an invitation to the contracts
to make an offer if they are willing to buy the products.
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7. 7. Consideration
Consideration in the law of contracts is something of value given by one party in return for
the promises of the other party to the contract. Consideration may be given for performance
of an act or for not performing an act. For example, a person may make a valid contract by
paying someone not to erect a fence on his or her property.
Although the consideration must be adequate in order to make a contract enforceable,
adequacy does not mean that the contract price exactly matches, or exceeds, the fair market
value of the property; instead, to be "adequate" the agreed consideration must only
approximate the market value sufficiently that the conscience of the Judge is not offended.
Adequacy of the consideration is measured as of the parties' entry into the contract, not at the
time for performance or at the time of trial. To measure the adequacy of the consideration at
any other time would deprive the buyer of the benefit of his bargain.
7.1. Rules of consideration
There are various rules governing the law of consideration:
1. The consideration must not be past.
2. The consideration must be sufficient but need not be adequate.
3. The consideration must move from the promisee.
4. An existing public duty will not amount to valid consideration.
5. An existing contractual duty will not amount to valid consideration.
6. Part payment of a debt is not valid consideration for a promise to forego the balance(Elawresources, 2012).
8. Intention to create legal relation
The intention to create legal relations in a contract law because it helps to differentiate the
cases, that are not suitable for court action. There is a presence of different agreements and
not every agreements leads to binding contract, which can be enforced through the courts as
for an example, helping your friend by lending book can be moral agreement but not bounded
legally by law. The case of Rose & Frank Co v J R Crompton & Bros Ltd [1923] KB 261 at
293 expresses that: "To create a contract there must be a common intention of the parties to
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8. enter into legal obligations, mutually communicated expressly or impliedly." (Andonopoulos
A, 2007). Therefore, to be in contract, parties must have an intention to be legally bound
according to contract law because there are some agreements like social, domestic or between
family, which are not legally bounded because the individuals they make promises in daily
basis and are not legally forcible. Furthermore, in case of Balfour v. Balfour, Mr. Balfour had
agreed to give his wife £30 a month as maintenance while he was living in Ceylon and when
they separated Mr Balfour, stopped payment and Mrs. Balfour brought an action to enforce
the payments. However, the court made decision on favour of Mr. Balfour because there was
not many evidence that they were intending to be legally bound by the promise (Zarrokh E,
2007)
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9. Case study
9. Offer
An offer is plan to build a group action, and should be created to a different person and be
command open till one amongst four things has happened: the tender is accepted, it's
retraced, it's rejected, or it's expired. A counteroffer will shut the initial offer. Some terms in
an exceedingly contract should be specifically outlined as a result of they determine the
fundamental obligations of the contract. These things can comprehend a quantity, a price, or a
description (Nolan, 2009).
An intimation (viewed from associate objective standpoint) by words or conduct of a
disposition to enter into a de jure binding contract, defining the terms of the binding
agreement which can be formed ought to the offer be accepted by the party to whom it's selfaddressed (Insite Law magazine).
An offer will primarily be explained as a transparent statement of the terms on that a party
(the offer or) is ready to create a business with different party (the offeree). In different words
creating (by offeror) an offer is promising to try to do or to not do one thing that is looking on
acceptance by different person (by offeree). An offer is performed by associate degree offerer
to associate degree offeree. In contract, offer may be bilateral or unilateral; bilateral offer means that two sides' promise to each other, thus contract created by agreement with respect
of 2 sides (offeror and offeree) in different words, variety of contract which needs agreement
and performance from either side (parties) to the contract. One party guarantees to try to do A
and also the different party guarantees to try to do B. Unsimilarly, unilateral contract
happens when only 1 facet (party) makes an offer to a different party and also the different
party may settle for by action rather than by offering something back. For instance, (bilateral
offer situation) if someone offers £20 to someone who can bring him a hotdog, a unilateral
contract is made when someone performs the condition and provides him with a hotdog (Law
Teacher, 2012).
In our case, the plumbing and lighting concepts Plc. runs a construction supply business in
London and they sent a letter to five contractors situated in England by offering brass wall
hanging light fixtures which are in a great demand and hardly to get in the market. They will
guarantee delivery at Stg£20.00 per unit if they are willing to do so. Therefore, the last
statement depicts that it is considered as an invitation to treat from plumbing and lighting
concepts Plc. An invitation to treat is taken into account to be a party just tantalising offers
that he or she is liberal to settle for or reject that is totally different from real offer and it's
classified into various kinds that involve auctions, display of products, advertisements,
tenders and mere statements of worth (Lawteacher, 2012a). In this case, Plumbing and
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10. Lighting concepts Plc. involve within the invitation of treat that falls underneath the division
of Tenders.
There are some practical applications which come under tenders and standing offer such as
Spencers v. Harding (1870) LR 5 CP 561 and Harris v. Nickerson (1873) LR 8 QB 286
9(McKENDRICK, 2005,pg 78).
Here, superior contractors ltd., which is a contractor and remodels nearly 200 houses every
year. They received a letter from plumbing and lighting concepts plc. They were interested in
the deal by asking the quantity of lamps by superior company‟s manager. So in this context
superior contractors Ltd. are offeror and plumbing and lighting concepts plc. is an offeree.
Hence there is no actual deal between them because they didn‟t give any response. But next
day, Plumbing and Lighting Concept Plc. sent a courier to superior contractors by giving 10%
off the basic price if they will agree right away to their proposal by picking up the lamps. It
means that PLC is trying to make a counteroffer to superior by sending a courier so here PLC
is an offeror and superior is an offeree. And superior didn‟t response them so as no genuine
offer happened between them.
10. Acceptance
On the opposite hand, acceptance so as to be legally binding, it's exact to fulfil 3 main rules.
To begin with, acceptance should be a „mirror image‟ of the offer. This can be meant that the
offeree should be agreeing to all or any terms of offer and not making an attempt to insert
new terms. Secondly, acceptance should be firm and eventually should be communicated to
the offeror. During this approach, offeree must create the acceptance with communication to
the offeror. There are a plenty of way to communicate however the law regarding
communication comprehends masses completely different rules (Law Teacher, 2012)
. There are some practical applications of acceptance such as OTM Ltd v. Hydranautics
[1981] 2 Llyod’s Rep 211 at 214; Turiff Construction Ltd v Regalia Knitting Mills Ltd (1971)
202 EG 169; Hyde v. Wrench (1840) 3 Beav 334 and Stevenson, Jacques & Co v. McLean
(1880) 5 QBD 346 (McKENDRICK, 2005,pg 91; pg107).
In our case, there is a lack of details in terms of creating a real offer and there's no sign of
communication of acceptance by the offeree i.e. Superior Contractors Ltd. all these things
show that there's no actual acceptance happened between the two parties and moreover when
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11. an offer is defined with a cut-off date and if the time limit expires or maybe within the case
wherever with no limitation of time an offer stands just for an inexpensive time as in our case
Superior Contractors Ltd doesn't answer the counter offer created by the Plumbing and
Lighting concepts Plc. explains there's no acceptance between those two parties.
There is an example that a car dealer Maurice sent an email to Austin offered to sell a vintage
car in £50,000. After that Austin read the mail and responds him that he wants the car and
sending email back is an acceptance at 1.00 pm. By the time Maurice went for lunch and
when he came back, he got another offer from third party, Bill and he accepted that offer.
Then he sold his car to Bill. But here he didn‟t check his email from first party and accepted
another offer. Afterwards, Austin heard that Maurice sold his car to another party I.e. Bill
around 4.00 pm.
Indeed, Austin sent the e-mail at 1.00 p.m. however it had been not his fault that Maurice had
lunch on that time which he won't check his emails by the time that he was arrived at his
office. Maurice had to wait for first response and had an obligation to check his mails and
after that accepts another offer. This reaction of Maurice was completely Maurice fault and
legally it's not allowed to sell the car to a different party by the time that you simply create an
offer to some other person and anticipate the acceptance (Law Teacher, 2012)
.
11. Consideration
The mere reality of agreement alone doesn't build a contract. Each parties to the contract
should provide consideration if they need to sue on the contract. This implies that every
aspect should promise to give or do something for the others. (Note: if a contract is formed by
deed, then consideration isn't required.)
For example, if one party, A (the promisor) guarantees to mow the field of another, B (the
promisee), A's promise can solely be enforceable by B as a contract if B has provided
consideration. The consideration from B may ordinarily take the shape of a payment of cash
however may carries with it another service to that A may agree. Further, the promise of a
cash payment or service within the future is simply as decent a consideration as payment
itself or the particular rendering of the service. So the promisee should provide something
reciprocally for the promise of the promisor so as to convert a blank promise created in his
favour into a binding contract.
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12. The definition given by Sir Frederick Pollock, approved by Lord Dunedin in Dunlop v
Selfridge Ltd [1915] AC 847, is as follows:
“An act or forbearance of one party, or the promise thereof, is the price for which the
promise of the other is bought, and the promise thus given for value is enforceable.”
http://www.lawteacher.net/contract-law/lecture-notes/consideration-lecture.php
There are some practical applications such as Williams v. Roffey Bros & Nicholls
(Contractors) Ltd. [1991] 1 QB 1; Shadwell v. Shadwell (1860) 9 CB (NS) 159.
(McKENDRICK, 2005, pg.188, pg.176).
A courier sent by Plumbing and Lighting Concepts Plc. to Superior Contractors Ltd. which
depicts that a promise made by them by giving a 10% off the quoted price to superior
contractors if they will agree right away to their proposal by picking up the electric lamps.
Therefore there is a sign of consideration of law exists between both of them. But, our case
study states that as promise made by Plumbing and Lighting Concepts Plc. there is no sign of
response from Superior Contractors.
12. Intention to Create Legal Relations
The parties should have an intention to create legal relations are the essential ingredients of a
binding contract. In another way, by the terms of their agreement they must have had an
intention to be bound. The doctrine of intention to create legal relations came late in English
Contract Law. The credit is given to Professor Simpson for the first recognition of the
doctrine to the Court of Appeal in Carlill v. carbolic Smoke Ball Co Ltd [1893] 2 QB 256
(McKENDRICK, 2005,pg 295) .
Some practical applications are as follows Walford v. Miles [1991]28 EG 81 CA; Marks &
Spencer Plc. v. Textile Holdings Ltd. [2001] EWCA Civ 274 (Insite Law Magazine, 2012 b).
The negotiations between Plumbing and Lighting Concepts Plc. and Superior Contractors Ltd
square measure thought of to be still within the process and this results to the circumstances
like some reasonably manner house between preliminary negotiations and a legally
enforceable contract which suggests there's no probability of intention to create legal
relations between Plumbing and Lighting ideas Plc. and Superior Contractors Ltd.
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13. 13. Conclusions
By analysing all the above statements, there is no sign of contract exists between the
Plumbing and Lighting Concepts Plc. and Superior Contractors Ltd. Therefore Plumbing and
Lighting Concepts Plc. has right to sell their products(lamps) at the current market price and
Superior Contractors Ltd. has to return electrics lamps to Plumbing and Lighting Concepts
Plc. .
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14. 14. References
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