A Contract will come into existence if an
agreement has been concluded. The test whether an agreement has been reached is
depend on external evidence, the court will consider the circumstances of case when
a reasonable man would think that an agreement has been reached and a contract
A Contract is an exchange of the promises
that constitutes a legally binding agreement between individuals or corporate
entities or a mixture of both. Agreement will be concluded when an offer by one
party (the offeror2)
to another (the offeree), that indicated that offeror willingness to enter into
a contract an certain terms without further negotiations, and accepted by the person
to whom it is addressed (offeree). There must be meeting of minds (consensus in
idem) on all relevant point in each contract.
In the formation of Contract the basic principal
is that there must be an offer, followed by an acceptance meeting the terms of
the offer. A Contract can be made verbally, In writing or by conduct but in all
cases, the proof of a valid offer and acceptance must exist, generally the England,
Wales and Scotland courts does not require contracts to be in writing.
In order to formed the valid contact, the
following must exist
should meets the offer requirement.
Intention to create
the legal relations.
An offer must be communicated to the
other party. An offer is a proposal from one party with the intention to
legally bond with definite terms like if it is accepted legally binding
contract will be concluded.
An offer must be distinguished from an
invitation to treat which is mainly an expression of willingness to negotiate.
An invitation to treat is not offer and cannot be accepted in law as invitation
to treat can be described as an invitation to enter into negotiations. The
offer can be accepted or rejected3. An
Advertisement in website, newspaper, a magazine or on TV also comprise an invitation
An acceptance will b effective only when
it has been communicated to the offeror. There are different mode for the
communication by here it is has been communicated by Telex recording machine. The general rule of acceptance is offer will
be accepted when received by the offeror means when acceptance intimated5
V Hughes 1871 , Forddell Estates LTD v Delitte 2014 CSOH 55 (Scotland);
Bieber V Teathers Ltd 2014 EWHC 4205 (England and Wales)
Cambridge dictionary definition of Offeror (‘a person, company, or organization
that offers to buy something from another person, company, or organization’),
Offeree (a person or an organization that is offered something, especially the
opportunity to buy or sell shares’).
3 Harvey v Facey 1853 AC 552 ( Harvey(H) sent
a telegraph to Facey(F) saying; ‘will you sell me bumper Hall pen (BHP) telegraph
lowest cash price, F replied’ lowest price for BHP is £900′ H
replied’ we agree to pay £900 for BHP’. F would not go ahead H brought an
action against him, H action failed. The court held that F reply was response
to a request for information and not an offer. He was simply stipulating the
price he would sell at if he decided to sell.
the case Let us consider Partridge v Crittenden 1968 1 WLR 1204 An
advertisement was placed in a magazine advertising bramble finches for sale at
25 shillings each. The defendant was charged under the protection of Birds Act
1954 for offering live wild birds for sale Held; eld: The advertisement was an
invitation to treat, so the defendant was not guilty. He had not ‘offered’ wild
birds for sale. See other cases; Harris v Nickerson 1873 ; Carlill v Carbolic
Smoke Ball Co 1893 1 QB 256
Entores Lts V Miles Far East Corp 19552 All E.r. 493, Brinkibon Ltd V Stahag
Stahl1982 1 All E.r 293