legal (1) final

Sailesh- 2605043 Sumeet Duhan-2804324

SAILESH-{2605043} SUMEET DUHAN {2804324}


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


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 under-

taking 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;


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' (Chen-

Wishart, 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


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)


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.


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(E-

lawresources, 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


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)


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 self-

addressed (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


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


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.


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.

http://www.lawteacher.net/contract-law/lecture-notes/consideration-lecture.php


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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