Contract Law: Offer and Formation

Contract Law Formation: The Offer

• Contract law is characterized by its tight structure and interconnectedness.
• This area of law operates under one overarching principle.
• Contract law can be both simple and complex.
• A fundamental concept is the equal choice or freedom of contract between parties.
• Individuals have the liberty to choose whether to enter a contract, with whom, and on what terms.
• The principle of equal choice dictates that a contract must embody the choices of all parties involved.
• All parties must willingly choose to be bound by the contract.
• Contract regulation relies on the equal choice of the parties involved.
• In contract, one party's choice isn't more important than the other's; their choices are equally significant.
• To establish a sound basis for normative questions, there are two justifications to articulate for equal choice.
• Contracts exist because free and equal individuals interact with each other.
• The rise to logic and private rule leads to collective justice.
• When individual goals align, breaching equality invites legal correction.
• Justification for contract law lies in the principle of equal choice.
• Some argue contract law should only focus on utility, welfare, and happiness.
• Respecting parties' equal choices encourages surplus creation, increasing wealth, happiness, and satisfaction.

Elements of Contract Formation

• A contract requires offer and acceptance.
• An intention to form a legal relationship is necessary.
• Contracts need minimal certainty.
• Contracts must have consideration.
• Without offer and acceptance, there is no contract.
• Lack of intention to be bound hinders contract formation.
• Contract content needs certainty, which means having sufficient content.
• Courts need enough agreement to enforce a contract effectively.
• Absence of something given in return voids the contract.
• Gift promises lack enforceability.
• Offer, acceptance, intention, certainty, and consideration must all be present for a contract to be valid.

Purpose of the Elements

• If all elements exist, the Court of State of NZ can enforce the agreement.
• These elements are essential for a contract and are linked to corrective justice.
• These elements must make sense from collective justice and economic efficiency perspectives.
• Enshrining these elements into law is fair.
• Each element connects parties' choices, affirming equal choice.
• Without offer and acceptance, mutual agreement is absent.
• Offer and acceptance embody choice.
• Choosing to offer and accept but not to be bound does not constitute entering a contract.
• Leaving contractual terms to judges means failing to make decisions over what is owed.
• Contracts require mutual benefit to validate the element of choice.
• Choice validates the significance of these elements in contract formation.
• Consideration is crucial as parties must choose to be bound.
• Tension exists between the constitutive rule of formation and the necessity of consideration.
• Underlying logic of contract: missing consideration indicates a flawed contract.

This Week's Goals

• Understand what constitutes an offer.
• Differentiate an offer from an invitation to treat using case law.

Offers and Tenders

• An offer includes an invitation to do business and make offers.
• Contracts could be bilateral or unilateral.
• In a bilateral contract, both parties exchange promises.
• In a unilateral contract, acceptance occurs through behavior.
• Building blocks are required to determine the presence of an offer in the context of tenders.
• Analysis begins with simple cases.
• Use easy cases to ensure understanding.
• Recent decision from the UK Supreme Court may be persuasive in NZ.
• Cases about the termination of offers will be included soon.
• Offer acceptance is conditional on its validity or being alive.
• Termination of offers can occur in different ways.

Potential Offer in Boulder Consolidated Ltd v Tangaere

• In order, Boulder Consolidated facts and timeline:
  • 1971: Initial agreement for Lot 168
  • 1974: Modification for Lot 203
  • 21 December 1976: Letter from defendant asking to choose another lot or get a refund
  • 8 March 1977: Plaintiff replies
  • March 1977 (after 8 March): Note from defendant with list of sections
  • June 1977: Plaintiff replies with choice of Lot 138 after prompt from defendant
• Lawyers altering stance and proceeding to court indicates belief of potentially winning due to the case's egregious nature.
• The courts of justice must rule in the defendants favor.
• T became angry when they changed lot a second time and he did not respond.
• T replaced the lawyers and initiated legal action against Boulder.
• Issues were offer and acceptance.
• Can a contract be formed for lot 138.
• Is it a new agreement.
• Must be regarding a piece of land.
• Potential offer is a note stating, "section with titles available listed herewith. I suggest T keeps in touch with Doug Quirk phone 861-878".
• Key question is whether the note amounts to an offer and, if so, when it was accepted.
• Focus must be on what the claimed acceptance is.
• If there was an offer and it was property accepted, a valid contract was formed.
• Selling the lot to someone else would be a breach.
• What does T hope to gain out of the litigation? Monetary compensation.
• T will not get the lot.
• Contractual rights are in personam and not in rem.
• T has no claim over a third party.
• T only has a claim against both consolidated businesses.
• In personam rights can be enforced through legal action unlike in rem rights.
• In rem rights: Property rights against other.
• In rem rights relate to things/possessions whereas in personam are rights to specific people.
• An individual's in personam right means obligation is tied to a specific party and not against the property itself.
• Claims or entitlement is against the seller.
• Rights are attached to land, not derived from a person in rem claims.
• The new owner has purchased a home and has rights of ownership.
• T has an in personam right against Boulder for breach of contract and will get damages.

McMillan J on Determining Agreement Existence

• The existence of an agreement can be inferred from an offer and acceptance and if one party made a firm offer and the other accepted it.
• An offer to treat is not the same as a binding offer. It will not form an agreement immediately when communicated.
• Objective test must be applied to determine if there has been an offer and acceptance.
• An apparent meeting of the minds forms consensus.
• No acceptance of an offer can create a contract unless there is first a valid offer available for acceptance.

Law of Offer and Acceptance

• Contracts are made by way of offer and acceptance.
• Problems are solve using offer and acceptance.
• An offer to treat differs because it lacks intention to become binding immediately upon acceptance.
• An invitation to treat doesn't intend any binding nature as it is merely an offer to treat or provide information to communicate interest.
• An invitation to treat doesn't expect the invitee's binding nature as the inviter doesn't see actions as a contract.
• An offer? Is the provision of opportunity to communicate interest in a certain project in return for consideration.
• An acceptance of offer highlights agreement, acceptance.
• An offer is usually provided to interested parties in return for money or certification of their services, e.g. tenders.
• An offer embodies choice to be bound if assented to.
• Utterance of intention results in a contract if accepted.
• Courts must apply an objective test when deciding if there has been an offer, i.e. is there an apparent meeting of minds.
• A contract requires a basic offer that can be accepted.
• T is saying yes: he wants lot 138 but the question is is there an offer

McMillan J on Correspondence Construction

• The correspondence here should be construed as an offer to other section in the list for Mr Tangaere to accept.
• Boulder would agree to do that.
• It did no more than indicate section for a possible sale, clarifying that the final choice requires discussing it with Mr Quirk at the site.

Conclusions

• The note is merely an invitation to treat, not an offer.
• Lack of objective intent means it would not be bound by the offer.
• Must call with the person on the letter to chose the lot.
• The note objectively cannot be interpreted as an offer.
• An offer provides an agreement's end.
• An offer holds a bilateral effect.
• An invitation to treat merely invites communication of interest and lacks a binding effect.
• This kind offer fell short of contractual offers and amounted to no invitation to treat.

Global Approach

• Cook J cuts straight to law in private law.
• The intention is that NZ should apply to English court style for global approach.
• In its entirety this correspondence must amount to an agreement / objective agreement.
• It is unnessecary to look at the elements of contract formation.
• It requires knowing the agreement.

Global Application

• Defendants communications should be considered together.
• There was no clear offer of lot 138 as at 21 June.
• Plaintiff's solicitors letter does not reference March communications.
• The parties never reached an agreement of their correspondence.
• By reaching same conclusion, theres no offer or acceptance.
• This could mean justice is the right approacht.
• On every case there is somebody arguing against the law i.e a losing party.
• View a holistic approach and diffrent approach can be achieved, i.e. Justice Cook.

An Offer?

• Should embody an intention for binding once consented to.
• This requires intention. Binding takes effect once offeree consents.
• Apporaches must possible in traditional and global contexts. Offer and choice must both fall under the rule must embody choice. Principle can be made short, thus simple.
• Fits completely with contract principles

Expressed Choice

• Corrective Justice: Allows people to conduct a private life apart from goals. Contract law defends equality.
• Ensuring efficiency: Trusting voluntary transactions would create surplus. Need to have bound promise.

Carbolic Smoke Ball

• This is an example case of common world contract. Rule is known by the principle.

Carlill v Carbolic Smoke Ball

• Advertisement: using the ball three times a day for two weeks means you will get money if you get influenza.
• Company has put money in the bank for the purpose of said claims.
• What is l? It means pound.
• You will get payed 100 pounds if you get influenza.
• Advertisement is the offer.
• Smoke ball is a prescribed form and contracting the flu id acceptance.

Courts and Advertisements

• Courts view advertisements as an invitation to treat.
• Restrictions on selling birds is relevant.
• Advertisements are merely to treat, cannot be stepped into for acceptance.
• The Carbolic Smoke ball requires the Lawyers to see if they mean"mere puff."
• Comany contracted to the world a pay the influenza.
• Terms must be assesnted to. Never gave anything back.
• Smoke ball won the list wuld decides in favour of carbolic smoke.
• Court will distinguish contratcts in a way to become apparent.

Bowen LJ on Promises

• What money do I get deposited into mean apart from a promise serious is what I get out means from custmers.
• Extravagant promises should get payed by what I get from custmers.

Bowen LJ on Offers to the World

• A offer can be amde to the whole world for them to get payed on by me through what I offer everyone to be reward later on.
• I do know? It means it should be reward.
• Offer will allow me to be bound and reyl on it.

Bowen LJ on Agreements

• I ofeer to give yoi stocks for the people to have conditions.
• The company does this for me which would impluie a contrcat fro whomever.

Boulder

• An offer is a set terms to be address with whom it is adressed.
• Corrective choice and justie are key. Carlill shows different primia contracts.

Ratio

Advertisments are dfferent dependibngon bi latereal and uninlateral contracts. The objective intetion allows the contact to be chosen. The consiquence causes the company ahs to pay them. All is requred is performing a certain element.

Pharmaceutical Society Of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401

• Poisons and drugs act is in Part 1. Require supervision to be under a pharmaist.
• If sale where made witthotu the requirement then it will be a criminal offense.

Case

• Under regualtuon the durgs need to be monitored to give right to contract law. Counter acceptance and offer are. Plaitiff is saying the offer and acceptance where at the the basket.
• Defnddant saying the acceptance happen at the payment by the chasier. Thus the right to monitor what drug there is. There will be no breach on the right of th defendant if the chaisier is monitor.
• Aoffer and acceptwace means brining it and the cahsier gives and is acceoted.
• Why make.it a breach of contract as it is not for hte intended to buy.

The call of The Palmerston North Council

• You will be rewarded for what you put in. Gallen said to be allowed what will be rewarded. Should not be re writing.

Other Tenders

• Is used in Nz where commision to be used, This is for travel angencies. 1 Advertisments means a tender that allows people the for work requirement. I mean they need to conform them and is still there. A lowest price for 3 negotiotion. Which means they.can not conform
• Call a tender or building needs? It allow call of treat which isnanivatuon to take. But sombody submjt ,it cnat be seen this was
• The offer must to accept and is allowed and must to to get with what'd allowed allowed by tenders
• (h) Tender be what it allowed by to follow with. Track record is with.

Tenders

• Offer must what can be been conformed and is what is done. Higgns what he knows as and is wanted to be shown tenders more as is with the paper and design to to use tender better.

An offer more?

• With the way you chose means is what. It want is not to happen. . With design where the tenders will be set upon they will follow with and is done.

Bigham

• Did will to to follow with and is for what the other will provide to me? Did all to will and get better by you? If it where had not done is alwasys know and will not not but what is given.

Gallen J

• To to where and how the tenders did all provide and all will will by there will for for their own that is there own.
• Contract for is or has or must be provide as? Hhbbvbbbb bbbb?

Back to Tender offer

• Objective where they be from. If is to that all do they?

Acknowledge with those who submit the Tender

• Be equal for all to decide and and can choose to not allow all which is fine.

Bowen

• Will mean will the and will what to and will make with the to follow. The wmay allows all