Contract Law

A contract may be defined as an agreement between two or more parties that is intended to be legally binding. The essential elements of a contract are: offer, acceptance, consideration (not required for contracts under seal), intention to be bound, mutuality, capacity and legality. Graw (2002 p. 34)

Some of the issues present in this case will have to be addressed and some questions will have to be answered in order to determine if Wen's and Jo's conducts constituted to a contract. In my opinion, the elements of offer, acceptance and intent to be bound present the main issues to this case. Therefore, the discussion, essentially, will be on these three elements.

An agreement consists of an offer and acceptance. At least two parties are required; one of them, the offeror, makes an offer which the other, the offeree, accepts. Moreover, there should be a strong promise or intent that will become binding on the offeror as soon as it is accepted by the offeree. Graw (2002 p. 25)

Wen's promise to sell laptops to Jo

In my opinion, there was a promise on Wen's part. Wen mailed a letter to Jo clearly stating and outlining the terms and conditions of his promise.

To distinguish an offer from an invitation to treat see: Pharmaceutical Society (GB) v Boots Cash Chemists (Southern) Ltd [1952] 2 QB 795. In this case, the court held that the display of goods is not an offer but an invitation to treat.

The decision was endorsed in Fisher v Bell [1961] 1 QB 394. Lord Parker (at 399):

"It is perfectly clear that according to the ordinary law of contract the display of an article with a price on it in a shop window is merely an invitation to treat. It is in no sense an offer for sale, the acceptance of which constitutes a contract."

Wen's intention to honour his promise

It can be argued that Wen's promise offering to sell the laptops to Jo was not necessarily legally binding at the time when Wen mailed his letter. However, because of the previous course of dealings between Jo and Wen, and because Wen facsimiled a letter to Jo the following day to revoke his offer, and telephoned Jo on the 19th of March to confirm the cancellation of his offer, there was a presumption that the contract would be carried out as agreed.

Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 High Court (at 457):

"what is alleged to be an offer should have been intended to give rise, on the doing of the act, to an obligation Ð'... in the absence of such an intention, actual or imputed, the alleged Ð''offer' cannot lead to a contract: there, indeed, in such a case no true Ð''offer'."

Communication of Wen's offer

An offer must be communicated to the offeree before it can be accepted. Graw (2002, p. 48).

Wen mailed his letter to Jo responding to her enquiry. Jo had received and replied to Wen's letter. There's no doubt about Wen's offer was properly communicated in this case.

An acceptance is a final and unqualified acceptance of the terms of an offer. To make a binding contract the acceptance must exactly match the offer. The offeree must accept all the terms of the offer. Graw (2002, p. 67)

On March 19th Jo received Wen's letter and immediately posted a response agreeing to Wen's offer

Brogden v Metropolitan Railway Co. (1877) 2 App Cas 666

Hyde v Wrench (1840) 3 Beav 334

An acceptance must be communicated to the offeror. And until and unless the acceptance is communicated to the