(A).Introduction In the legal scholarship, a contract is defined as a legally binding agreement.

Treitel in the Law of Contracts defines contract as: an agreement giving rise to obligations which are enforced or recognised by law and continues writing that: The first requisite of a contract is that the parties should have reached agreement1. (B). Legal Issues The main question at hand is whether a contract between ar !upermar"et# and !heila has been concluded, in the circumstances of the scenario $. In order to reach to a conclusion, one should consider the sub%issues e&amined below, namely invitation to treat, counter%offer, acceptance by silence, death of the offeror and the postal rule. (B.1) Offer Distinction from invitation to treat 'n offer is an e&pression of willingness to contract on certain terms, made with the intention that it shall become binding upon acceptance by the person to whom it is addressed(. 'n effective offer must consist of a definite promise to be bound, declaring the offerors readiness to underta"e an obligation upon specific conditions are met). ' statement that lac"s such intent is a preliminary communication referred as an invitation to treat6 i.e. a request to others to ma"e offers or to engage in negotiations with a sale in mind*, an +offer to receive offers+. ,y far the most recognised instance of the occurrence of invitation to treat is in the case of goods displayed in shop windows. In Fisher v Bell it was ruled that the display of a flic"%"nife in a shop window did not amount to an offer to sell this item.

1 #

Treitel, 1---, p ..

/ereinafter: the seller 0otably, for a contract to be formed, apart from 1meeting of the minds2, intention to create legal relations and consideration are also required. ( ontract 3aw, (th 4dition, 5ary harman, 6illan 7ublishing, p. #8 ) 3aw of ontract, 1)th 4dition, heshire, 9ifoot : 9urmstoms, ;<7 #==*, p.(= 8 ;r even more archaically as an invitation to chaffer * > 6 arter, 4 7eden : ? > Tolhurst, Contract Law in Australia, )th 4d, 3e&is0e&is ,utterworths, !ydney, #==*, p (#
$

It has been argued. that this rule is inconvenient nowadays since in most types of shops no negotiation ta"es place between the shop"eeper and the customer and the goods are to be sold at the prices shown. The distinction between offer and invitation to treat is clarified by the case of Gibson v Manchester City Council -. In the aforesaid case the /ouse of 3ords was faced with a case whose facts were essentially identical to those in the issue in question as far as !heilas letter of 1st !eptember is concerned. In that case the wording of the owners letter to the prospective buyer stated that the owner may be prepared to sell the property to the prospective purchaser. The /ouse of 3ords ruled that the letter was not an offer, but rather, an invitation to treat. A lication of t!e La"

Therefore, in the specific e&amined case, the sign for sale is in no sense an offer at law and should be regarded as an invitation to treat. 'dditionally, the sellers letter of 1st !eptember stating that he is willing to sell at the indicated price, constitutes, on the basis of the language used, namely @ may be prepared %, merely a negotiating statement, an invitation to treat, rather than an offer since the letter was not deemed to be sufficiently definite to amount to an offer. !ince an invitation to treat can only be followed by an offer, !heilas letter to buy the motorhome for A1),=== is an offer. !eptember. (B.#) $ounter % offer Buring the course of negotiations the response to an offer may be for the offeree
to suggest different terms. !uch a response will not, of course, be an acceptance, since it does not match the offer, but will be a counter%offer 1=. This means that the last offer submitted is open to acceptance and the initial offer has been reCected. The Pickfords v Celestica case points a variation of a typical counter%offer situation. In the abovementioned
case, 7ic"fords had sent elestica two offersD one suggesting to carry out wor" using lorries

onsequently, at this stage no contract was concluded between

!heila and the seller, as reasonably was argued by the latter in his letter posted in 1= th

.
1=

The 3aw of ontract &'( )*+,)-+ Laurence .offman/0li1a2et! 3acdonald g 14 5odern law of contractH.pg $-

E1-*-F 1 'll 4G -*#.

and the price to be A.-= per lorry used and another suggesting a total price of A-.,*8= for the whole wor", regardless of the number of lorries. Thus, the question for the ourt was whether both offers made were open to acceptance or the later had superseded and revo"ed the first

offer. The

ourt of 'ppeal held that the second offer had replaced the first in a similar

way to a counter%offer.

lication of t!e La"

<nder the particular case under survey, !heilas letter stating that she will pay A1-,=== for the motorhome should be treated as a new offer, the only one available to acceptance, having the actual effect of a counter%offer as her second quotation neatly indicates her intention to withdraw her first offer. (B.5) Acce tance 26 silence 'n acceptance is an unconditional assent to the terms proposed in the offer 11. 's a general rule an acceptance in order to be effective should be communicated by any means to the offeror1#. 6hen acceptance has been manifested with a positive act, there is e&ternal evidence that a contract has been completed. /owever, where only the passive conduct of the offeree lies, the question to be considered is if silence can be construed as acceptanceI It is a recogniJed rule of law that silence alone does not constitute acceptance of the offer. This principle was established at Felthouse v. Brindley case13 where the ourt held that there was no binding contract between the parties since there was no communication of acceptance1(. In relation to unilateral contracts, when the offeree e&pressly or impliedly authoriJes silence as acceptance, e&pressing his intention to waive the requirement of communication of acceptance, a binding contract should be formed1). 9urthermore, it has been argued that silence by the offeree will constitute acceptance if there is a duty to spea", as distinguished from the mere right, especially
11 1#

!ourceboo" on ontract 3aw pg $. Entores v. Miles Far East Corporation (1955) 1$ Felthouse v. Brindley (1863) 142 ER 1037, 1( This principle has been ta"en up in the <nsolicited ?oods and !ervices 'ct 1-*1. This 'ct supports the concept of freedom to contract, stating that a recipient of unsolicited goods can treat them as an unconditional gift if the goods are "ept unused for #. days and the seller informed that they are not wanted, or the goods are "ept as new for si& months unused. !ee 6illan 7ublishing pg #) 15 !ilence as 'cceptance in the 9ormation of ontracts: /arvard 3aw Geview, Kol. $$, 0o. ( L9eb., 1-#=M, pp. )-)%)-. @ http:NNheinonline.orgN/;3N3anding7ageIhandleOhein.CournalsNsoulr-:divO-:idO:pageO

in view of what might be called an Pumbrella contractP between the parties18. /owever, application of this rule might arise conceptual difficulties of assent in the absence of ongoing contractual relationships. Thus, the traditional view that silence alone will not suffice continues to be adopted in Cudicial decisions at least in cases of bilateral contracts1*. A lication of t!e La"

Ta"ing all the above into consideration, in the case at hand, !heilas statement of unless she hears to the contrary within 1( days she will assume that she has an agreement has no effect since mere silence, particularly when initiated by the offeror, cannot constitute acceptance. (B.7) $ounter offer 's mentioned above, an original offer may be terminated by a counter @ offer1.. It follows from the receipt principle for communications that the counter%offer must be actually communicated to the offeree1-. A lication of t!e La"

In the conte&t of the particular case, the sellers letter of 1) th !eptember is a counter%offer operating as a reCection of !heilas offer to buy for A1-,===, which ta"es effect upon receipt but since the letter in question is not received by !heila, the sellers counter%offer is ineffective and !heila remains the offeror. (B.8) Deat! of t!e offeror 's concerns the effect of death of an offer, it should be stated that the revocation by death rule#=, where a live offer once e&isted has ceased to e&ist by the time of the offerees attempted acceptance, does not always apply. The principles in relation to the death of the offeror can be found obiter dicta in Bradbury v Morgan

Cole-McIntyre-Norfleet Co v Holloway 4g, the decision in The Leonidas L1-.)M case where ?off 3> commented that it was a&iomatic that acceptance of an offer cannot be inferred from silence, save in the most e&ceptional circumstances.
18

1*

1. 1#=

Hyde v Wrench (1840)

! v Clarke L1-#*M (= 3G ##* Intervening Death of Insanity in the Offeror the death of offers

L1.8#M#1. This case suggests that, in general, the death of an offeror may not cause an offer to lapse, particularly if the offeree accepts in ignorance of the death. If it is an offer where the continued e&istence of the offeror is essential to the formation of an enforceable contract, namely an offer of a personal contract, then it is sensible the death of the offeror to automatically terminate the offer. A lication of t!e La"

The question is whether !heilas death before sellers acceptance of 1) th !eptember nullifies her offer. ?iven the sellers ignorance of the offerors death and the nature of the contract which involves no personal element, !heilas offer is still open to acceptance. (B.6) 9ostal :ule The postal rule, which was set out at the case of Ada" v Lindsell##, provides that under certain conditions, acceptance ta"es effect upon posting rather than delivering. 9or the postal rule to apply: %acceptance by post must should be a normal, reasonable or anticipated means of acceptance #$
% the postal rule must not have been e&pressly e&cluded in the offer #( and

% the letter of acceptance must be properly stamped and addressed#) A lication of t!e La"

<nder the circumstances of the e&amined case, the sellers acceptance will ta"e effect on posting, i.e. on #( th !eptember, as the postal rule is enforceable since acceptance by post is the reasonable means of acceptance @ notably the whole
#1

http:NNboo"s.google.grNboo"sI idO#)056.h/IKo :pgO7'(-:lpgO7'(-:dqOdeathQofQtheQofferor:sourceObl :otsO$p.d5<R9Jm:sigO<rK#)K&;=maSaT)g-J09J*vno9g:hlOel:saOU:eiO4 vTS<r3K ei!*Va;o(/o,V:vedO= /'V8'4w TgSWvOonepage:qOdeath X#=ofX#=theX#=offeror:fOfalse pg (##
#$ #(

'dam v 3indsell #enthorn v.Fraser L1.-# #olwell $ecurities v. #ughes L1-*(M

#)

Ge 3ondon : 0orthern ,an", e& parte >ones (1990) )

communication between the parties was made by post % and there is nothing to suggest that the letter was improperly addressed or posted. ($). $onclusion onclusively, a contract on the basis of the terms set out in !heilas letter has been concluded binding !heilas e&ecutors.