Law Essays – Contract Law Legal

Contract Law Legal

Legal Aspects of project management – Problem questions based on contract law

1. Introduction to the contract law

Law of contract: The law of contract is the study of legal principles which underlie all contracts; it is not concerned with particular types of contracts and their specialized rules (Koffman and Macdonald 2001).

What contract laws do?

This can be briefly explained as follows: Agreement is formed between two parties, when some disputes between the parties arise over the agreement, then one or both parties’ initiates the judicial process. Then the judicial applies the rules of the contract law like first they check with the formation and vitiation of the project and adds on the identification and interpretation of the express terms in the contract and check for the terms included in the contract, from that all they subtract the invalid expressions and terms and finally they look for the remedies of breach and gives the result. Though the contract law basically stands on the basics of the agreement of the parties, the result is completely based on the process of judicial application of the contract law.

Purpose of contract law: Butterworths states that contract law has many “purposes”, but the central one is to support and to control the million of agreements that collectively make up the “market economy”. (Turner C 2006)

Based on the knowledge of law of contract, Legal advice will be given to the two cases in the assignment. Firstly, Nancy and Andy case, Andy is advised whether Andy is eligible to clam the reward £3000 announced by Nancy for safe return of her dog, which Nancy has refused to give to Andy even after safe return of her dog saying she have never made that offer to him as a individual. Then in Finewines Ltd case, where the company could not fulfill all the customers, supplying there orders, as they don’t hold sufficient stock and Adam is advised whether the disappointed customers might have a valid claim against their company.

2. Nancy v Andy Case

2.1. Brief introduction of the case.

Nancy owns a pet dog called Rombo one day she find it missing, then she placed an advertisement in the journal stating “MISSING DOG, OFFER OF REWARD” and she also stated that “ I am offering £3000 for its safe return”. Looking at the advertisement one person named Andy remembered that he saw the similar dog roaming in the nearby park and the next day he caught the dog and returned the dog to Nancy and remembered her about the offer she mentioned in the advertisement, in reply to that she said “stop being so silly, Andy! I have never made the offer to you as an individual” and said him to leave the house. Andy has to be advised whether he is entitled to £3000 reward.

2.2. Legal issues arising in the case

The main legal issue in the case is, whether Nancy is subjected to contract with Andy to pay him £3000.

In order to solve the above legal issue we have to checkout the main elements of the contract in the case. Let the elements we are mainly going consider be offer, acceptance and intention to be legally bound.

2.3. Legal research related to the case.

Contract: “A contract is an agreement between two parties by which both are bounded in law and which can therefore be enforced in a court or other equivalent forum” ( Turner C 2006), The person who places the offer is known as offeror and the person who accept the offer is an offeree. We have two different trems to be known, they are offer and acceptance(accept). This are the two main elements in a contract.

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One way of classifying contracts is according to whether they are ‘bilateral’ or ‘unilateral’.

Bilateral contract: In bilateral contract a promise by one party is exchanged for the promise of the other party (Duxbury R 1997). Where the both parties are bind to the contract.

Unilateral contract: In unilateral contract one party promise to do something in return for the act of the other party, the act is defined by the party makes the promise (Duxbury R 1997).

From the above definition we know that the case we are dealing (Nancy & Andy) may comes under unilateral contract. Nancy is the party who sets the contract, by makes the promise of offering £3000 for the safe return of the dog. Here safe return of the dog is the act set by Nancy.

Offer: An offer is a legal commitment, a proposal which invites, indeed presupposes, eventual acceptance. (David Oughton & Martin Davis 1997). The person who sets the offer is known as offeror and the person who accepts to the offer is known as offeree. Offer may be addressed to one particular person, a group of people or the world at large, as in an offer of a reward (Duxbury R1997).

In this case the advertisement made by Nancy can be considered as an offer and Nancy as an offeror and Nady is the offeree, the offer is an offer of reward which is addressed to the world at large.

Acceptance: Acceptance may be defined as an unconditional assent, communicated by the offeree to the offeror, to all terms of the offer, made with the intention of accepting (Duxbury R 1997).

Acceptance in unilateral contract: Acceptance of a unilateral offer need not be communicated, because performance is the same as acceptance (Carlill v Carbolic Smoke Ball Co.(1893) 1 Q.B 256 Turner C 2006).

Intention to be legally bounded: The court have recognized that some agreements, by there nature, are not intended to be legally binding (Duxbury R 1997). The agreement does not become a binding contract unless the parties have shown, expressly or by implication, that they intended to create legal relations: Rose and Frank v. Crompton Bros Ltd.[1923]. (W T Major 1993).

Lindley LJ relating to the case Carlill v. Carbolic Smoke Ball Co.[1893] 1 Q.B 256 says that we have to first consider whether the advertisement was intended to be a promise at all, or whether it was a mere puff which meant nothing. His answer for the question “was it a mere puff?” was No, he has made his answer upon the passage in the advertisement “£1000 is deposited with the Alliance Bank, shewing our sincerity in the matter” where this statement clearly their promise (Burrows A 2007).

The same question arises that whether really Nancy has given that advertisement to create a legal relation. The statement in the advertisement does not really promise that Nancy will be surely paying the reward to the person who brings her dog safe to her. In advertisements the court will look for the intention of the offeror in making the advertisement. As in the case of Carlill v. Carbolic Smoke Ball Co.[1893] 1 Q.B 256. Therefore in this case, the reward Nancy has mentioned in her advertisement is “mere puff” and is not intended to form the basis of a binging contract (Duxburg R 1997).

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2.4 Summary of the legal research.

All the basic elements of the contract have not fulfilled to bind a contract. The offer made is not bind to the intention to be legally bounded and its mere puff. So a binding contract is not formed.

2.5 Legal advice to Andy

The advertisement given by Nancy in the newspaper is an offer of reward which is opened to the world which is a unilateral offer and the sentences of the offer are so vague as they do not mention about for how long is the offer is and there is no promise made regarding the reward.

In the case of unilateral offer the acceptance is considered when the person starts the work as mentioned in the offer and there is no need to be any communication between the offeror and the offeree (in this case Nancy and Andy respectively).

Thus acceptance has occurred when Andy started to search the missing dog of Nancy. Then when it comes to the reward in the advertisement Nancy had not made any promise that she will be giving the reward amount of £3000in the advertisement.

So Nancy really does not intend to be legally bonded. Though Andy performed according to the offer it has got no value. Thus a full binding contract is not formed between Nancy and Andy so Andy does not have any valid clam against Nancy to clam for the reward.

3. Finewines Ltd Case

3.1. Brief introduction of the case

Finewines Ltd is an importer and distributor of fine wines, based in Sunderland, as a part of there sales strategy had distributed their monthly catalogue containing a list of wines and there prices to there customers. One among the list was White Australian wine for £75 per case.

Looking at their catalogue ten of their customers had ordered for 100 cases of White Australian wine each, then Finewines Ltd realised that they do not hold that amount of stock to fulfil all the customers, all they have is only 500 cases of that White Australian wine as they did not excepted that sort of response that month and it had never occurred earlier and the general manager Adam want to know whether the disappointed customers hold any valid clam against them.

3.2. Legal issues rising in the case

The main issue is the whether the customers of Finewines Ltd have a valid claim against them.

To solve the above issue we have to find whether the catalogues sent to the customers by Finewines Ltd is on offer or invitation to treaty.

3.3 legal research related to the case.

Distinguish between offer and Invitation to treaty: An offer is an statement or expression of willingness to contract for certain terms, where it requires only an acceptance to form a binding agreement and it must be distinguished from all other statements which are made in the course of negotiation in forming a contract: only a offer has a capability to transfer in to an contract.

The most common statements that have to be distinguished from offer are an invitation to treaty. The technical definition for invitation to treaty is the statements indicating the maker’s willingness to receive offer (T A Dwones 1997).

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In this case the Finewines Ltd. company have sent their customers a catalogue which contains a list of wines and there price. The is no statement which is as define in the above sentence for an offer, so there is no statement of offer which could imeditally convert in to an contract, therefore it can be merely an invitation to treaty.

Finewines Ltd sent the catalogue as their sales strategy to customers to receive offer from the customers. This is supported by Grainger & Sons v Gough [1896] AC 325. In the context of the distributed prise list which is similar to the distribution of the catalogues by Finewines Ltd, Lord Herschell said that the point was made that the supplier will not want to become bound to sale more of a particular item he can supply, which could occur in the prise list (or advertisement) was considered as an offer (Rowland D & Macdonald E 2005).

Second, relating to the order placed by the customers of Finewines Ltd, in a similar case of invitation to treaty which is the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401, where the goods displayed is considered as invitation to treaty and Lord Goddard CJ’s decision states that the display was not an offer, where it was the customer who was making an offer to buy (Burrows A 2007). Similarly in this case the catalogue is not an offer and the order from the customer is the offer now it’s to the Finewines Ltd to accept the offer from the customers.

3.4 Summary of the legal research

The catalogue containing the price list of the wines does not form an offer, it’s an invitation to treaty and the orders from the customers based on that catalogue are the offers.

3.5 Legal advice to Adam

Finewines Ltd, an importers and distributor of fine wines has distributed their monthly catalogue containing the list of wines and their prices to their customers as their sales strategy, which is an invitation to treaty from the Finewines Ltd and the orders from the customers are the offers and it’s the Finewines Ltd to accept the offer that they can do as per the company norms if they have such as first come first serve, last come first serve etc., thus an contract is not formed in between the customers and the company till now so the disappointed customers do not hold any valid clam against Finewines Ltd.


  • Koffman and Macdonald (2001). The Law Of Contract. 4th ed. Surrey: Tolley.
  • Mindy Chen-Wishart (2005). Contract Law. Oxford: Oxford.
  • Chris Turner (2006). Unlocking Contract Law 2nd ed. London: Hodder Educations.
  • Robert Duxbury (1997). Contract In Nutshells 4th ed. London: Sweet and Maxwell.
  • David Oughton and Martin Davis (2000). Source Book on Contract Law 2nd ed. London: Cavendish Publishing Ltd.
  • T A Dwones (1997). Text book on contract. 5th ed. London: Black Stone Press Ltd.
  • Chris Turner (2006). Contract Law 2nd. London: Hodder Educations.
  • Andrew Burrows (2007). A case book on contract. Oxford: Hart Publications.
  • Diane Rowland, Elizabeth Macdonald (2005). Information Technology Law. ( id=-VtTiR8niBEC&pg=RA10-PA273&lpg=RA10-A273&dq=grainger +%26+ sons+v+gough+1896+ac+325&source=web&ots=6zk75i6NHk&sig=JfG3JbLF9eWRFibj-iDWS8fgE4Y&hl=en)

Table of cases

  • Carlill v. Carbolic Smoke Ball Co.[1893] 1 Q.B 256
  • Rose and Frank v. Crompton Bros.[1923]
  • Grainger & Sons v Gough [1896] AC 325 7
  • Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401, 7
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