Principles of Business Law

1st Assignment Lecturer: Ms Jamila Simms Email:jsimms_n@yahoo.com Questions: 1. Identify and Explain using case examples, what is meant by: (a) An offer (6mk) (b) Invitation to treat.

2. Identify and Explain 3 key elements required to form a legally binding contract? (9mk)

Answers: Before identifying and explaining a case of what is an offer lets first give it a meaning. According to Treitel an offer is willingness to contract on certain terms, made with the intention to be binding between the offeror and offeree. Note also that an offer can be made to a particular person, group of people or even to the world. In the case of Carlill v. Carbolic Smoke Ball Co. (1893) the offeror being Carbolic made an offer to the world. In company made an offer to the world that anyone who went out and purchase their smoke ball and contracted influenza (which they claim their product was prevented) will be rewarded with 100. Mrs. Carlill the offeree accepted the offer by going out and purchasing the smoke ball and later contracted influenza. She then sued Carbolic for the sum 100 promised to her. The promise to pay was a valid offer (even if the company state they was jus joking) which Mrs. Carlill accepted. She later won the case. Invitation to treat is not offer but showing a persons willingness to consider a contract. The words maybe prepared to sell or might be interested in selling are commonly use in invitation to treat. In the case of Harvey v. Facey : Mr Facey offered to sell a property to the Kingston City but Mr. Harvey who wanted the property sold to him sent a request asking if he will sell the Bumper Hall Pen and requested the lowest . Mr Facey then replied the same day and stating the cost but at no time did he agreed to sold the property to Mr. Harvey. Mr Harveys telegram stated only to two question, first willingness to sell and what was the lowest cost and Mr Facey only answered the second question, hence it cannot be treated as a contract but a invitation to treat. 2. There are essential seven (7) elements of a legally binding contract, but three (3) will be listed here. a. Agreement / ad idem: (offer /acceptance): There must first be an offer or offeror and that offeree must be willing to agree or accept the rules of the contract and if it accepted the two person will be legally bound in a contract. b. Form: A contract can be in any form, thus most contracts are valid irrespective of whether they were made orally, written or even implied by conduct.

c. Consideration: In simple is something of value given in return or exchange of a promise of something in return.

Submitted by: Natesha Thorpe