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Not all agreements are enforceable contracts
Introduction
What is a contract? ... Domestic Agreements ( BALFOUR V BALFOUR ), Commercial Agreement , Marriage Agreement, there are all contracts. ...
Every contract is an agreement but not every agreement is a contract. ... Some businesses view contracts as only those highly detailed written agreements used in business and which have been drawn up by a lawyer. ... It was not an offer but an ITT not capable of creating a contractual relationship. ... Display of Good
The general rule is that a display of price marked goods in a shop window is not an offer to sell goods but is an invitation to a customer to make an offer to buy ( TIMOTHY V SIMPSON ). ... Tenders
A statement that goods are to be sold by tender is not an offer, but only an invitation to treat. ...
¢É Advertisements
All forms of advertisements are normally invitation to treat, not amounting to an offer ( GIBBONS V PROCTOR ). ... Termination of an Offer
An offer once made does not remain open for acceptance indefinitely, it can be terminated for a number of reasons and once terminated it is no longer capable of being accepted. ... On this test, a mere acknowledgment of an offer would not be an acceptance; nor is there an acceptance where a person who has received an offer to sell goods merely replies that it is his ¡°intention to place an order¡±( O. ... Acceptance must be Communicated
Acceptance can be made : orally or in writing or implied from the offeree¡¯s conduct, nd acceptance is not effective until it is communicated to and received by the offeror. In POWL V LEE the court HELD: P failed in his action for breach of contract since acceptance had not been properly communicated. ... Acceptance cannot amount by silence
Mere silence from the offeree does not amount to acceptance. ...
In FELTHOUSE V BINDLEY , the court HELD: there was no contract between uncle and nephew since nephew had not signified his acceptance. Auctioneer not liable for the sale of horse at auction. ... For this purpose a letter is posted when it is in the control of the Post Office, or of one of its employees authorized to receive letters: handing a letter to a postman authorized to deliver letters is not posting. ... Acceptance by Telephone/ Fax / Telex / Internet
The postal rule does not apply to the above instantaneous modes of communication. ... offer is accepted when offeree is embarking on act
Consideration
In English law, a promise is not, as a general rule, binding as a contract unless it is either made in a deed or supported by some ¡°consideration. ... Consideration need not be Adequate
Consideration must be sufficient, that is, it must have some value. As long as some value is given, the court will not enquire into ¡°how much¡± or is it of ¡°equal value¡±, the law only requires an element of bargain it need not be a good bargain. Consideration must be just sufficient and therefore need not be adequate. ...
Although consideration need not be adequate, it must be real, it must be capable of being quantified and having its value estimated by the law. Thus there are examples of consideration is not real and therefore not good:
i. ... If A makes a present of a car to B a year later B promises to pay A ¡ê500 there is no consideration for B¡¯s promise as A did not give B the car in return for it. Therefore anything which has already been done before a promise is made in return is past consideration and in law that promise is not binding.
The question whether consideration is past is one of fact: the wording of the agreement is not decisive. ... the promise need not, however, provide the whole consideration for the promise: thus he can enforce a promise, the consideration for which was provided partly by himself and partly by his agent or partner or by some other co-promisee. ... The promisor may also get a factual benefit, as damages might not fully compensate him for the loss which he would suffer if he duty were broken. ... Performance of a Public Duty
In general if a person has a legal obligation to do a certain thing, then doing of that very thing can neither be a detriment to him not a benefit to the promisor. ... Discharge or variation of Existing Duties
If one party had led the other to believe that he will not enforce his strict rights and the other party has incurred expense or loss in reliance on that promise, then it would be inequitable to permit the first to go back on his promise. In HUGHES V METROPOLITAN RAILWAY ,the court HELD that the landlord could not do this as the tenant had relied on the negotiations and so neglected to safeguard his legal position by executing the repairs. ... Part payment of a Debt
The general rule of common law is that a creditor is not bound by an undertaking to accept part payment in full settlement of a debt. ... He is therefore not bound by the promise and can sue for balance ¨C PINNEL¡¯S CASE
The rule in PINNEL¡¯S CASE was approved by the House of Lords in FOAKES V BEER (1884). ... The rule in PINNEL¡¯S CASE ensured that the payment of the lesser sum was not a discharge on the whole.
Intention To Create Legal Relations
An agreement, though supported by consideration, is not biding as a contract if it is was made without any intention of creating legal relations. ... Even a statement that is perfectly precise may nevertheless not be binding if the court considers that it was not seriously meant. ... ¡± The court held that ¡°It is not reasonable that the defendant should be bound by such general words spoken to excite suitors. ... ¡± These statements did not give rise to contract between the manufacturer and a dealer( who had bought the product form an intermediary) as they were ¡° not intended to be, nor were they, acted on as being express warranties. ... It turned out not to be a rubber company and the claimant alleged that the defendants had warranted that it was a rubber company. ... ¡° Not only the terms of such contracts, but the existence of an animus cotranendi on the part of all the parties to them must be clearly shewn. ... LTD an agency agreement provided: ¡°This arrangement is not entered into, nor is this memorandum written, as a formal or legal agreement, and shall nit be subject to legal jurisdiction in the Law Courts¡but is only a definite expression and record of the purpose and intention of the¡¡± these words were concerned, to which they each honourably pledge themselves¡.¡± These words were held to negative contractual intention, so that the agreement did not amount to a legally binding contract. On the other hand, contractual intention was not negatived where an arbitration clause in a reinsurance contract provided that ¡° this treaty shall be interpreted as an honourable engagement rather than as a legal obligation¡¡± The contract as a whole was clearly intended to be legally binding and the purpose of the words quoted was merely to free the arbitrator ¡°to some extent from strict legal rules¡± in interpreting the agreement.
Approximate Word count = 5867
Approximate Pages = 23.5
(250 words per page double spaced)
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