Contracts in Business Essay Example | Topics and Well Written Essays - 2500 words

Contracts in Business - Essay Example Consideration Either of the parties involved in a contract has to receive something valuable for the contract to be sealed. Therefore, in a situation where one promises a friend to give him a car and the giver refuses to eventually give the car to the friend, such a friend cannot go to court and sue him/her for not giving him that car. This is due to the fact that, the receiver of the car was not to give something of value to the giver in return to the favour. Thus, the price that is paid to the promise of the other is simply the consideration. Besides these elements, it is of essence to have a look at one of the most confusing elements of a contract that is often overlooked. That is ‘an invitation to treat’. (Smithies, 2007) Invitation to treat An invitation to treat is usually confused with an offer. This expression, â€Å"invitation to treat†, refers to the invitation or call for other persons to make an offer. Thus, some of what are usually perceived as offers is as a matter of fact, invitations to treat. Take, for instance, an advertisement for the sale of a sofa set. That advertisement is just an invitation to treat and it is upon the willing buyer to make an offer to the seller by requesting to buy the sofa. The advertising seller will in turn accept the request and this forms an acceptance of the offer. The payment for the sofa by the buyer marks his fulfillment of his part of consideration and thus, the advertising seller fulfils his consideration by delivering the sofa to the buyer. (Fuller, 2010 p180) The case to illustrate the issue of invitation to treat is as follows: Case: Fisher versus Bell (1960) Facts: This case is about a shop-keeper who had displayed a flick-knife, which had a ticket placed behind it which read â€Å"Ejector-Knife 4 shillings†. The Act of Offensive Weapons of 1959 was used to charge this shop-keeper for having the flick-knife being offered for sale. The Magistrates Court convicted him (the shop-kee per) and he appealed on a law point. He said that there can be no offer to sell, but buy only. Thus, the one who purchases makes an offer. Held: This was an invitation to treat (the display of the flick-knife for sale) and following this the Act was amended to read to say that it is an offence for a person to be found in possession or expresses intent to sell a flick-knife. (Blond and Petrillo, 2007 p208) The case provided involves HE Ltd which posted (on September 10th) an offer to dispose 10 laptop computers to GCS. The offer for sale included a price tag of ?300/Laptop and was open until September 24th. This offer for sale, as per the facts obtained from the aforementioned elements of a contract, is just an invitation to treat. GCS’s manager, Gemma called HE Ltd for an enquiry whether they would accept a 2-month credit and that signifies an offer to buy. On September 20th Bertie, HE’s manager refused to sell the laptops since the terms of sale stated otherwise and t his signifies a refusal to make an acceptance to GCS’s offer. The sale of the same laptops to Argon Electronics on September 22nd shows a complete contract. Therefore, the September 23rd offer to buy by Gemma would not be valid since the contract had already been carried out. Thus, no contract had existed before between HE Ltd and GCS. Question 2 To: