Answer 1 In order to answer this question, one first needs to understand the basic definition of a contract.

As defined by Treitel, "a contract is a legally binding agreement and in most cases results from the agreement of the parties.1This agreement usually takes the form of a specific offer made by one person (the offeror) to another (the offeree), which that other person accepts2. In their book, Contract Law in Perspective, the authors stated, an offer has traditionally been defined by the courts as an expression of a willingness to enter into a binding contract was manifested by words or conduct. In determining whether something constitutes an offer, the courts place considerable emphasis on certainty and completeness.3This means the offer must be in such terms which are understandable to the agreeing party. Moreover, the offer must addressed in a manner which indicates that it will be legally binding as soon as the offeree accepts it.3 In addition, it is important to note that an offer is different from an invitation to treat. As stated in the book Contract Law in Perspective, an invitation to treat is an oldfashioned expression which describes attempts by one party to encourage the other to enter into negotiations with them or make them an offer.4 The book further explains how each and every one of us come across invitations to treat in our daily lives. An example of this would be signs in shop displays such as "lowest prices in town", "get the best bargain you can", are in fact not offers, but merely an invite to make an offer to buy the product or service.4 There are many instances which help us explain how an offer is different from an invitation to treat. An example of this is the supermarket case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1953)5, where the defendant was charged with selling controlled pharmaceutical products other than under the supervision of a pharmacist. Boots operated on a self-service basis. The Society appealed that some of the goods were required by the Pharmacy and Poisons Act 1933 to be sold only under the supervision of a registered pharmacist. The Society argued that the offer was made as the goods were displayed and accepted when put in the basket.6 JudgeSomervell LJ said: in the case of an ordinary shop, although goods are displayed and it is intended that customers should go and choose what they want, the contract is not completed until, the customer having indicated the articles which he needs, the shopkeeper, or someone on his behalf, accepts that offer. Then the contract is completed.6 This case shows us that the display of goods in stores is not an example of an offer, but just an invitation to treat. It is also important to note that advertisements of goods for sale are merely invitations to treat and not offers. In the case Partridge v Crittenden (1968)7, defendant advertised Bramblefinch cocks, Bramblefinch hens, 25s each in a periodical called "Cage and Aviary Birds". Partridge was charged with, and convicted of, going against the Protection of Birds Act 1954 s.6(1). The judge Lord Parker CJ disagreed and stated that when one is dealing with advertisements and circulars, unless they indeed come from manufacturers, there is business sense in their being construed as invitations to treat and not offers for sale.8

However, there have been cases where advertisements have been ruled as offers as in the case of Carlill v Carbolic Smoke Ball Co (1893)9.In this case, the company placed an advert where they offered to pay 100 to anyone who caught influenza after having their Carbolic Smoke Ball. The company also stated that they kept aside 1000 in a bank should the need arise to pay. Mrs Carlill bought a smoke ball, used it as prescribed, however she still caught influence and claimed her 100. It was concluded that there was a unilateral contract between the parties and that the claimant could recover 100. Judge Bowen LJ stated that the advertisement in question was intended to be understood by the public as an offer to be acted upon and not an invitation to treat. Here the advert is not an invitation to treat, but an offer because the company stated to offer and also showed intent by keeping aside 1000 in the bank.10 There are also instances where a case has been ruled as neither an offer nor an invitation to treat. In Harvey v Facey [1893]11, Harvey sent Facey a telegram: Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid. Facey replied: Lowest price for Bumper Hall Pen 900. Harvey then sent another telegram accepting to purchase the property at 900. Facey refused to sell the property. The claimant filed against allowing someone else to take the property. Harvey sued to prevent someone else from taking the property. The courts disagreed on the basis that telegram was merely an invitation to negotiation and not an offer.12 In addition, the author of the book Contract Law in Perspective explains tenders and auctions where a contractor who chooses to submit a tender/bid in the form of a quotation is making an offer, which might be accepted or not. Therefore, adverts of tenders or auctions are considered as invitation to treat. However, when the tender advert specifies that a particular type of bid will be chosen, then that advert of the tender is an offer left to the acceptance or rejection by the party entering the tender13. In Harvela Investments Ltd v Royal Trust Co of Canada Ltd (1986)14, the defendants invited two parties to make a bid for the land they were selling and stated to accept the highest bid. The sellers accepted the lower bid as it paid additional100,000 Canadian dollars more compared to any other offer. However, the sellers accepted the bid which went against their own terms; it made the contract invalid.13 In conclusion, the cases above demonstrate what an offer is and how it different from an invitation to treat wherein the courts look at the facts and circumstances to distinguish between them. It is important to know the difference between them as the acceptance of an offer results in a contract, whereas, acceptance of an invitation to treat is only an offer.

Answer 2 The definition of acceptance in contract law is: "an express act or implication by conduct that manifests assent to the terms of an offer in a manner invited or required by the offer so that a binding contract is formed."15 Two principles need to be held for a contract to be formed by acceptance. First, the offeree agrees to the exact terms of the offeror. Second, the offeree communicates the acceptance either verbally, written or by performance.16 While understanding the fundamentals of acceptance, it is important to note that determining the exact point at which acceptance has occurred and a contract is formed is difficult. In his book, Collins refers to this marrying of offer and acceptance as the moment of responsibility.17 The objective of this essay is to identify rules and methods of acceptance and determining at what point a contract becomes legal according to case law. The case of Percy Trentham Ltd v Archital Luxfer Ltd [1993]18 helps us to understand the rules of acceptance. In this case, Trentham appointed Archital to carry out some work on their industrial unit. Archital carried out the work and were paid fully. Trentham sued Archital for some errors, the latter disagreed on the existence of a binding contract. Judge Steyn LJ agreed that a contract existed on the basis of four characteristics. First, case facts are objectively looked at while determining whether a contract exists. He stated, "the governing criterion was the reasonable expectations of honest men". Second, not always a offer and acceptance needs to written or orally expressed for a contract to exist, but it can be formed as a "result of performance" (as in the case of Trentham v Archital). Third, due to the performance of Archital, the offer was executed and when Trentham paid Archital, the transaction was carried out by both the parties involved and hence a contract existed. Fourth, Steyn LJ stated, "if a contract only comes into existence during and as a result of performance of the transaction it will frequently be possible to hold that the contract impliedly and retrospectively covers pre-contractual performance".19 We can use this case of explain the concept "battle of the forms". It is a situation where the offeree accepts an offer, however, the conditions differ to or may conflict with the original terms of the offeror. Here, a contract exists if the offeror performs and carriers of the terms of the offeree. A contract will cease to exist if there is no performance and the offerees terms will only be a counter-offer.20 As mentioned earlier, for a contract to be formed, the acceptance should be communicated to the offeror. This is seen in the case of Powell v Lee (1908)21 where Lee appointed Powell as a headmaster of a school without communicating the terms of appointment to the defendant. Here, no contract existed due to the lack of communication to the defendant.22 It is also very important that a contract is formed only once the acceptance is received by the other party. In the case of Entores v Miles Far East Corp [1955]23 Lord Denning explained a situation where "A shouts an offer to B across a river and A does not hear the reply because of the noise of an aircarft flying over". In that case, where the offorer didn't hear the reply, no contract was formed. Lord Denning also explained "that an offeror cannot deny receipt of the acceptance if 'it is his own fault that he did not get it'"22. Additionally, in the case where acceptance is received after working hours, then the contract is formed only at the "beginning of the next working day" as in the case of Brikibon v Stahag Stahl (1983)24. Conversely to the rule of communication, silence of a party is not considered as acceptance, even if the offer states so

clearly. In the case of Felthouse v Bindley (1862)25, the plaintiff replied to the defendant: "If I hear no more about him, I consider the horse mine at $30 15s". The defendant did not reply. However, as per English Law no contract existed as a result of silence.22

It is important to note that there are exceptions to the rule of communication, such as the postal rule. The rule is as follows: "where the person accepting the offer sends their acceptance by post, the offer is regarded as accepted as soon as the letter of acceptance is put in a postbox rather than when it is received"26.This is seen in the case of Adams v Lindsell (1818)27 where the defendants offered to sell wool on certain terms and "requested a reply in course of post". The defendants sold the wool to another party, however, the plaintiff's reply was posted one day before the defendants sold the wool. The courts ruled that a contract had been formed at the time when the letter was posted and not received.26 From this case we see that a contract is formed when the letter is posted, even if it hasn't been received by the offeror. The courts also note instances where the postal rule is invalid. In the case where the letter has not been posted properly, or where a postman failed to post the letter in the mail box of deliver it properly a contract will not be formed as seen in case of Re London and Northern Bank [1900]28. Another exception to the postal rule is seen in the case of Holwell Securities v Hughes(1964)29 where the offer was exercisable only via "notice in writing".26 Here it was concluded that the contract was formed not when the letter was posted but only when it was received and the judge stated that: that the postal rule probably does not operate if its application would produce manifest inconvenience and absurdit y26. In conclusion, from the cases mentioned we understand the rules courts follow in determining whether the form of acceptance was valid enough to form a contract. It also clear that the courts look at each situation separately while ruling judgments and there also have been exception to the rules such as in the case of silence as a form of communication is invalid and the postal rule.

Answer 3 Consideration is one of the key components at which courts look at to determine whether a contract exists. As defined in the book Contract Law in Perspective, consideration is the doctrine which expects every contract to involve an exchange which comes about as a result of striking a bargain.30 In simple terms, for a contract to be legally binding, one party needs to give something to other party in exchange to receive something from the second party. Moreover, for a contract to hold consideration should hold value which is recognized by the law. Treitel states the general rule is that a promise is only regarded as a consideration if its performance would also have been so regarded.31 Under the English Law, courts have observed 5 main rules while evaluating consideration. These rules will now be explained using case law. Firstly, any consideration doesnt hold if it is in the past. As seen in the case Re McArdle [1951] 32 the claimant carried out repairs in the house she was living and which she did not own. The owners agreed to pay the claimant for the repairs done, despite them not asking for the repairs to be carried out. Under the law, the owners were not obliged to pay as the work was done in the past.33 However, there are exceptions to this rule if two conditions hold as stated in the book Essentials of Business Law: First, the other party must have requested that the act be performed. Second, both parties must all the time have contemplated that payment would be made.33 This can be seen in the case of Lampleigh v Braithwaite [1615] 34 where the claimant got the defendant a pardon from the King for killing another man. The claimant did this at his own expense and the defendant agreed to pay 100, however, later on he refused to pay. The courts held that there was a breach of contract and the defendant was to pay 100.33 The second rule is that consideration must move from the Promisee but need not move to the Promisor31. This is seen in the case of Tweddle v Atkinson [1831] 35 which helps to explain the rule of Privity of Contract, where a contract is private between the parties who made it. Anyone who did not make the contract cannot sue on the contract or be sued on it. In this case, the claimant could not sue as he did not make the contract. However the exception to this rule must be highlighted. As stated in the book Essentials of Business Law, The Contracts (Rights of Third Parties) Act 1999 has created an exception to the privity rule, where A third party can sue on the contract if the contract expressly provided that he should be able to sue.36 Therefore, according to this rule, the claimant in Tweddle v Atkinson [1831] 37 would be legally allowed to sue if it was stated in the initial contract that a third party could enforce the contract.36 The third rule holds that consideration must be sufficient but does not need to be adequate.33 This means that consideration should hold some recognizable value as in the eyes of law, however, it need not be adequate in the sense that it should be of the same value in comparison to the opposite partys consideration. This is illustrated in the case Chappell v Nestle [1959] 38 where the company Nestle offered the record for the day in exchange for three wrappers. The courts held that this was an agreeable form of consideration even if the wrappers held little value in comparison.31

The fourth and fifth rule of consideration relate to the performance of an existing duty. The case of Collins v Godefroy (1831)39 illustrates the forth rule, where consideration is not obliged when the general law of land already imposes one to carry out a particular duty. In this case, the claimant did not get any money for attending the trail as he was required by the law to do so.33 The fifth rule holds that performing as per the existing terms of a contract is not consideration for a promise done later. This is seen in the case of Stilk v Myrick(1809)40 where the Captain promised additional wages to the remaining crew for the voyage to be completed after two of the crew members left the ship. Here, the crew couldnt sue the Captain for not paying the additional wages as they had not performed any additional consideration for the new promise and hence a second contract did not exist.33 It is important to explain part payment of debt while understanding the rules of consideration. In the case Pinnel v Cole(1602)41 the judge stated that payment of a lesser sum on the day that it is due cannot be any satisfaction for the whole because it appears to the judges that by no possibility a lesser sum can be satisfaction to the plaintiff for a greater sum.42 However, there are exceptions to this rule as illustrated in the case of Foakes v Beer(1884)43 where a lesser payment is accepted if i) partial amount is paid at an earlier date, ii)partial amount is paid at another place, iii)if the creditor accepts a gift instead of the full amount, iv)if the creditor accepts the partial amount by a third party or v) or another exception is of promissory estoppel.42 The doctrine of promissory estoppel is explained in the case of Central London Property Trust v High Trees House Ltd [1947] 44. Where Lord Denning stated, that if a person made a promise, and the person to whom it was made was intended to rely on the promise and did rely on it, then the promise would be binding. This would be the case even if no consideration was given in return for the promise. 42 In this case, the defendants where only ruled to pay the lesser rent during the time of war and the claimants were to receive full rent from the days flats could be sublet and in the future. This was ruled on the following four conditions to be met for promissory estoppel to be held: i)a legal contract must exist between the parties ii)the promisor must make it clear that existing rights wont be enforceable iii)the promise relies on that promise iv)the promise also acted on the new promise. These four rules were true in the case of High Trees House Ltd and the claimants were entitled to receive full rent only after the sublet period took effect. 42 In conclusion, this essay has explained the rules of consideration and the importance of its presence for a binding contract to exist. Moreover, an exception to consideration, that is, the doctrine of promissory estoppel and its rules are also explained.