For a contract to exist on there must be an offer. The offer must be accepted between the two parties or there will be no contract. The offer is an “expression of willingness to contract made with the intention it shall become binding on an offeror as soon as it is accepted by the offeree”. In addition there must be an intention to create legal relations, this is when both parties are serious and intend to be legally binding and also there must be consideration which is value exchanged under a contract. Also capacity is needed; this is freedom to enter into a contract. There are two types of agreements, unilateral and bilateral. . Bilateral contract is where both parties agree, a promise in exchange for another promise, For example; one person promises to sell something to the other and the other accepts by promising to pay them back. Unilateral contract is when only one of the parties makes the promise in exchange for an act.
In this essay i will be advising Raffia on her two contractual issues.
As we can see, Fix it up Ltd were awarded the job instead of Raffia, whereas she may not have been satisfied about this. Firstly we can see Bradfield have advertised in a newspaper requiring an experienced interior designer. An advertisement is an Invitation to Treat. This is when a party is merely inviting offers. Other examples of invitation to treat are; Auctions, to support this is the case of Payne v Cave (1789), display of goods, to support this is the case of Fisher (1961) and (Pharmaceutical Society of Great Britain v Boots Cash Chemists Ltd (1953) and also tenders is an invitation to treat which we will be looking at.
Tenders is the goods that are advertised for sale (by tender), to support this is the case of Spencer v Harding (1870).
Some advertisements are not always invitation to treat as some can lead to an offer if they are specific; supporting this is the case of Carlil v Carbolic Smoke Ball Co. (1893). In this case the defendant’s placed an advertisement in the newspaper indicating whoever bought a smoke ball would be cleared of any kinds of alignments at the time of an influenza epidemic. They specifically also stated whoever bought this smoke ball and used it as directed would not catch influenza, and if they did, they would be paid £100. Mrs Carlil the claimant caught influenza and claimed £100 from Carbolic Smoke Ball Company. The court held this in favour of Mrs Carlil .
In this scenario Bradfield stated “the job will be awarded to the lowest bid received in the tender box”, we can see they are being specific here. This tender leads to a competitive tendering as Bradfield indicated that this contract (the job) will be awarded to the bidder that has made the lowest bid and that person is the only one to have a binding contract, in this case it is Raffia. To support this is the case (Harvevla Investments Ltd v Royal Trust Co. Of Canada (1985). It is more likely that this advertisement will be classed as an offer and not an invitation to treat.
The offer was accepted by Raffia as soon as she submitted her unmarked envelope with her tender by the specific time and date and this became legally binding. The following are ways in communicating the acceptance; only a suitable offeree can accept the offer, acceptance must be valid, and the main one that we will see in this scenario is that there is no need to communicate acceptance of a unilateral offer.
This offer also is unilateral as only one party was able of accepting the offer and that again was Raffia supporting this is Carlil v Carbolic Smoke Ball Company (1893).
With Bradfield Instituted it also indicates there is an intention to create legal relations with a person with a lower bid, therefore that is Raffia. It shows that both parties are serious in intending to create a contract. Consideration is visible as Bradfield intentions were to give the person with the lowest bidder the job, so therefore they can exchange money for the work that was to take place.
I would like to advice Raffia it is most likely that she has a case against Bradfield Institute as there was meant to be a contract made, even though Bradfield did not award her the job. With all the supporting evidence used It is more likely that this advertisement will be classed as an offer and not an invitation to treat. Bradfield are in the Breach of contract so therefore Raffia can take Bradfield to court and claim compensation. This will be done by a remedy which is Damages. Yet again as we can see Bradfield may go against this and fight to state this is an invitation to treat. Raffia has a stronger case with all the supported evidence provided. She had all the elements that are required to have a binding contract.
The next issue she has is a problem with a friend. Raffia lent her friend £1000 a year ago and last month she wanted it back. Her friend Angelo told her he can only give £700, at the time she agreed and now she would like all of it back. To see if there is a contract between the parties, the first question to ask is whether there is agreement between the parties. The agreement has been formed by both as they both have agreed.
Now we should look at intention to create legal relations. As we can see Raffia has lent the money to a friend, this friend of hers is going to be included in a social/family/domestic, situation where the agreement is not usually legally binding. This can be rebutted depending on the situation. Supporting this is the case of Parker v Clarke (1960), the presumption in this case was rebutted if a party suffers an obvious detriment and also see the case Simpkins v Pays (1955). You can only rebut if parties are serious so as we can see Raffia and Angelo were serious about this agreement.
When Raffia had agreed to lend Angelo £1000 and Angelo promised to pay her back this became consideration. This means give something of value to others and getting it back to become legally binding/ exchanging. . In the case of Currie v Misa (1875) consideration was defined as; “A valuable consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to one y or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other”. What this is basically stating is consideration should be a advantage for the person receiving it and a detriment to the person actually giving it.
There was no consideration between the two parties because Raffia had fulfilled her promise but Angelo did not. As there has been an agreement we can definitely indicate that there has been an intention to create legal relations as mentioned above.
As there was no consideration we can look at the rule on a part – payment of a debt to help Raffia with her contractual issue. The rule for part -payment of a debt was showed in Pinnels case (1602). It stated “part payment of a debt can never relieve liability to pay the whole debt”. In this scenario Raffia gave Angelo £1000 and if Angelo gave £1000 back that would be consideration but he gave her £700 and that is not binding. To this part -payment of a debt, there are some ways to work around the rule, these are if goods are given instead of cash or early payments (for example a month early, this would be classed a s a good consideration. None of this was achieved by Angelo. Also the exceptions are if there was a part- payment of a debt by a third party, this is also a good consideration. This was looked up in Hirachand v Temple (1911). Now we can see that Raffia is going back on her word, the only reason she took the £700 pounds instead of £1000 was because she was having financial difficulties. To support this is the case of Wiilliams .If Raffia does take Angelo to court she will want to sue him but then Angelo can use a defence for Raffia going back on her promise which is promissory estoppels. This defence is an equitable remedy. The four main key areas for promissory estoppels are; existing contractual relationship, the claimant must have deciced to give up some right under the contract, the defendant may have retired on the promise and also it would be inequitable to revert from the promise you have. It is said those who come to equity must come with ‘clean hands’.
Raffia will more likely win the case because Angelo’s result using estoppel will be that the promise made will be binding.
Martin, J (2005). Contract Law. 2nd ed. London: Turner, C. p4 – 35.
Stone, R (2009). The Modern Law of Contract. 8th ed. Oxon: Routledge – Cavendish. p43 – 140.
Mckendrick, E (2008). CONTRACT LAW Text, Cases and Materials. 3rd ed. Oxford: Oxford University. P 52-75.
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