Law of Contract, Assignment Case Study Example | Topics and Well Written Essays - 2250 words

Law of Contract, Assignment - Case Study Example This does not mean that there must be an exact subjective matching of the internal thoughts of the two parties. What the law looks for is outward evidence of what the parties agreed or what has been termed the 'external indicia of agreement'.1 This means that even if the parties did not have the same agreement in mind, if their actions, from an objective standpoint could be said to demonstrate an agreement, then a contract has been formed.2 This follows the sensible approach that 'commercial contracts cannot be arranged by what people think in their inmost minds. Commercial contracts are made according to what people say'3 What this means for our problem question is that, while searching for the consensus in idem between Riz and Jatinder, we look at how they acted in the above negotiations. To form a contract, all you need to identify is an offer and an unqualified acceptance of it. The question here is whether the advertisement in the magazine constituted an offer. Offers may be express such as 'I'll give you 50 for that skirt', or they can be implied such as hading over the fare as you get on the bus. In both cases it is open for the offeree to accept the offer. This will conclude the contract. However, despite the ease of making offers or implied offers, some actions will not form offers at all but merely invitations to treat. An invitation to treat may look like an offer but if you look closely, there has not been agreement on the essential factors of the contract, there has just been some words passed that would entice or make it easier for the other party to make a suitable offer. For example, in Harvey v Facey4 one party asked the other what would be the lowest cash price they would be willing to sell a property in Jamaica. The other party replied that it would be 900. The first party then telegraphed them 'We agree to buy BHP for 900 asked by you'. The owners argued that they had never offered to sell the property and the agreed with this. It is also generally accepted that advertisements and announcements to the public at large are not intended to be offers but merely invitations to treat. This is for the simple practical reason that if too many people responded to the advertisement, the advertiser could be placed in a position of breaching limitless contracts. Therefore, unless words specifically forming a contract are used, an advertisement will be deemed to be an invitation to treat and not an offer.5 b. Riz's offer of 5,000 When Riz saw the advertisement he called Jatinder on the phone and offered her 5,000 for the car.