FORMATION OF CONTRACT ESSAY

Question 1

paragraph one- essentials for contract formation

Answer 1

• Must agree on who the parties are.
  🔹 Sale of Goods/Land:
• Must identify:
  ○ The goods or land
  ○ That a price is to be paid
• Price doesn’t always have to be fixed:
  → s.8 Sale of Goods Act 1979 lets courts set a reasonable price.
  Essential terms for property or objects need to be precisely identified/defined.
  For a Lease:
  The property
  The rent
  The lease duration
  Possibly other terms, like rent review or purchase options.

Question 2

case; paragraph one

Answer 2

Mr. Bogie v. Forestry Commission (Unreported)
Facts: Mr. Bogie claimed he had entered a contract to buy timber from the Forestry Commission. However, no formal agreement was signed, and essential terms, including precise identification of the timber, were missing.
Outcome: The court ruled that essential terms weren’t agreed upon, and therefore, no contract was formed.

Question 3

paragraph two

Answer 3

Invitations to Treat: These are not considered offers but invitations for others to make offers. Examples include:
Shop window displays (Fisher v Bell)
Items on supermarket shelves (Pharmaceutical Society v Boots)
Auctions
Requests for tenders
Advertisements
Acceptance: For an offer to be accepted, the offeree must communicate their acceptance either through action or words.

Question 4

case; paragraph two

Answer 4

fisher v bell 1961
Fisher sued Bell for offering a flick knife for sale in a shop window, which was priced. Fisher argued that this was an offer, not an invitation to treat.
Outcome: The court ruled that the display of the knife in the window was an invitation to treat, not an offer, and thus no contract was formed when Fisher tried to accept the offer.
pharmeceuticial l society v boots
medicine self service set up, argued medicine should be sold behind the counter but agreed with boots that its an invitation to treat not an offer.

Question 5

paragraph three

Answer 5

There are 3 possible responses to an offer:
“Yes” (acceptance) – contract concluded
“No” (rejection) (If you reject an offer, you kill it(!) – you can’t accept an offer after having first rejected it.)
“Yes, but” (qualified acceptance)
Postal Rule: This rule states that a contract is formed when the acceptance is posted, not when it is received by the offeror.
What the Postal Rule Does Not Apply To:
Only applies to acceptances, not to offers, counter-offers, or withdrawal of offers.

Question 6

case; paragraph three

Answer 6

Jacobsen Sons v Underwood (1894)
Facts: Jacobsen Sons sent an offer to Underwood through the post, and Underwood accepted the offer by posting a letter of acceptance. However, Underwood later tried to argue that the contract had not been formed due to his change in circumstances.
Outcome: The court upheld the postal rule, affirming that the contract was formed when the acceptance was posted, not when it was received.