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Contract Law - Agreement (Foundations of Contract) Summary
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Comprehensive summary/exam notes on the foundations of contracts in Contract Law. This document covers offer and acceptance (including the distinction between an offer and an invitation to treat), certainty of contract, and intention to create legal relations.

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  • October 6, 2024
  • 13
  • 2022/2023
  • Summary

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Agreement
Includes:
1. Offer and Acceptance
a. Invitation to Treat
2. Certainty
3. Intention to Create Legal Relations

1. Offer and Invitation to Treat:
Offer = a statement by one party of a willingness to enter into a contract on stated terms.
Invitation to treat = expression of willingness to enter into negotiations which, it is
hoped, will lead to the conclusion of contract.
Gibson v Manchester City Council – man seeking to buy his council house.
The words “may be prepared to sell” as well as the invitation to “make
formal application to buy” were fatal to any attempt to construe an offer.
They were “but a step in the negotiations.”
A mere statement of price or information is not an offer.
Harvey v Facey –
Claimants sent a telegraph asking if the defendant was willing to sell
them a piece of property and how much they would sell it for. The
defendants responded by telegraph with a price.
Neither the request for information nor the response with information
was considered an offer.
a. Display of Goods for Sale
General rule = the display of goods in a shop window is an invitation to treat
rather than an offer.
An offer is made by customer, which is then accepted by the
shopkeeper.
Fisher v Bell – defendant displayed a flick knife with a price
tag on it in his shop window. Was charged with an ‘offer for
sale’ of an offensive weapon.
Lord Parker CJ – “In ordinary language it is there
inviting people to buy it, and it is for sale…”
PSGB v Boots –
Boots allowed shoppers to pick drugs off the shelves and pay for
them at the till. Before then, all medicines were stored behind the
counter and picked out by an employee. Pharmaceutical Society
argued that a display of goods is an “offer” and that placing a drug
into one’s shopping basket amounted to “acceptance”, thus placing
Boots in breach of a statute which required that a pharmacist
supervise the point of sale for certain drugs.
Somervell LJ – the display of goods is an invitation to treat.
If C is right, once an article has been placed into the
basket, the customer is bound and would have no
right to change the item without first paying to
substitute the article for another.
Case exemplifies the fact that practical and policy
considerations drive the courts to find offer and acceptance at
certain points of a transaction.
b. Advertisements
General rule = a newspaper advertisement is an invitation to treat rather than
an offer.
Partridge v Crittenden – D advertised Bramblefinch cocks and hens
for sale.

, Lord Parker CJ – there was “business sense” in treating them
as invitations to treat – if treated as an offer, the advertiser
might find him contractually obliged to sell more goods than
he in fact owned.
Exception = unilateral contract:
Carlill v Carbolic Smoke Ball –
D sold the ‘carbolic smoke ball’ and advertised it in the
newspaper, stating that £100 will be paid to any person that
contracts influenza, colds or associated diseases after using
the ball 3 times daily for 2 weeks and that £1000 is deposited
in the Bank showing their sincerity.
C did as directed but caught influenza and sued for
£100.
Held that this was a binding unilateral contract – the
advertisement amounted to an offer made to the public and is
accepted by anyone who performs the condition specified
therein.
The bank deposit showed the sincerity of the
company and was therefore not a mere puff.
CA had in mind the policy consideration of consumer
protection against spurious advertisements.
Exception = notice at entrance to car park may be an offer:
Thornton v Shoe Lane Parking –
C drove his car into D’s multi-storey car park, inserted
money into an automatic machine and was issued with a
ticket stated to be ‘subject to the conditions of issue as
displayed on the premises’. Notices in the carpark excluded
liability for damage and for personal injury.
Lord Denning MR:
The offer is made when the owner of the machines
holds the machine out as being ready to receive
money and acceptance takes place when the
customer put his money into the slot.
The ticket came after the contract was formed (was a
mere receipt, following Chapelton v Barry UDC)
and so the exemption of liability was not
incorporated into the contract.
Exception = display of a deck chair for hire held to be an offer:
Chapelton v Barry Urban DC –
C hired a deck chair on the breach from D. C paid the
attendant and received a ticket for the hire of a deck chair
(containing exclusion of liability for personal injury).
The deck chair gave way and C was injured.
Slesser LJ:
The “pile of chairs there standing ready for use” and
the notice put up by the pile of chairs stating the
price constituted the “whole of the offer”.
The ticket was no more than a receipt.
This is inconsistent with case such as PSGB v Boots – can be
seen that the courts are willing to twist the rules and be
flexible in finding when an offer arises in a particular case so
as to fix the point where the contract had formed in a way
that results in a fair outcome.
c. Auction Sales

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