Smith And Robersons Business Law

19-07-17 cheapnisha 0 comment

Smith And Robersons Business Law

Task 1 (a)

Upon successful completion of your induction and your first appraisal, he was confident that you can undertake your first set of tasks, independently. 

Now, Mr Alpha Locksmith has asked you to prepare a factsheet for a new client where you need to explain the importance of the essential elements required for the formation of a valid contract.

Your answer must include:
– a definition and your explanation of essential elements in the formation of a valid

Contract must include:

  1. Offer and acceptance
  2. Intention to create legal relations
  3. Consideration
  4. Capacity and
  5. Privacy of contract

A contract may be defined as an agreement between two or more parties, but it is not just an agreement, it is composed of 5 more elements.

In order for the contract exist, it must have an offer, acceptance, consideration, intention to create legal relation, certainty and capacity.

The first requisite of a contract is an agreement; it consists of an offer and acceptance. The offeral makes the offer and the offeree is free to accept or reject it.


Smith And Robersons Business LawAn offer is something that invites you to make an offer. It is capable of acceptance but an invitation to treat is not.

An offer can be made to one individual or to a group of people or even the whole world. It can be expressed as oral, written or implied. It can be terminated, as the offeral can take back his/hers offer. The offer can be revoked any time before an acceptance happen, even if the offeral says that he will keep it open for a period of time. (Routledge v Grant)

The Revocation must be communicated to the offeree (RuClake Case). It was only effective when the revocation was notice to ready about it. (Byrne v Van Tienhoven).The Revocation can be communicated by the offeral or a reliable third party. 

Invitation to treat

An invitation to treat is declaration of the intention into the negotiation. It is not an offer, so it cannot be accepted or rejected. An agreement is not created if there is an acceptance of the invitation to treat.

Examples of invitation to treat can be advertisements, price lists and catalogues.

Smith And Robersons Business Law

In Fisher v Bell (1960), the defendant was accused of selling limitation of offensive weapons – flick knife. The plaintiff claimed that the knife is placed a price tag of the window. The court held, in a similar way to Partridge v Crittenden (1968), that this was an invitation to treat, rather than an offer, and hence the defendant was not guilty.


Only what is offered can be accepted. So the offer must be accepted exactly as it is offered, without any negotiation. If the offeree try to negotiate the offer, than the offer is considered as a counter offer which can be accepted or rejected by the offeral.

There may have many offers and counter offers before an agreement happen. The acceptance of the offer is very important as it brings the negotiation to an end. When the negotiation ended then we can set up the terms and condition of the contract. An acceptance can be written, oral or inferred by action.