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Questions and Answers

What is the legal significance of an auctioneer's request for bids?

  • It is an invitation to treat. (correct)
  • It constitutes a definite offer to sell.
  • It obligates the auctioneer to accept the highest bid immediately.
  • It binds the auctioneer to sell to the highest bidder.

    • In the context of a tender, how is the tender notice classified legally?

  • As a binding offer.
  • As a guarantee of contract.
  • As an acceptance of bids submitted.
  • As an invitation to treat. (correct)

    • What must happen for an offer to constitute a binding contract?

  • It must be documented formally.
  • It must be accepted by a proxy.
  • It must be communicated to the offeree. (correct)
  • It must be made publicly.

    • In the case of advertisements, what was the ruling in Harris v. Nickerson regarding liability for damages when an advertised sale is canceled?

    <p>The plaintiff's claim failed as the advertisement was merely an invitation to treat.</p> Signup and view all the answers

    What does Payne vs Cave (1789) clarify about the nature of bids in an auction setting?

    <p>Bids constitute a valid offer to purchase.</p> Signup and view all the answers

    What must occur for an offer's acceptance to be legally effective?

    <p>Acceptance must be communicated to the offeror.</p> Signup and view all the answers

    How did the court view the advertisement in Harris v. Nickerson regarding its legal implications?

    <p>It invited people to submit offers.</p> Signup and view all the answers

    What aspect of a valid offer is emphasized by the legal requirement for communication?

    <p>The offer must reach the offeree for acceptance.</p> Signup and view all the answers

    What distinguishes a valid offer from an invitation to treat?

    <p>An invitation to treat invites others to make offers while a valid offer invites acceptance.</p> Signup and view all the answers

    In the context of Joseph's advertisement, why is it not considered a valid offer?

    <p>Advertisements generally signify intent to negotiate rather than create a binding obligation.</p> Signup and view all the answers

    What is the effect of Anushka stating she needs time to think about Supuni's offer?

    <p>No contract is formed until Anushka accepts the offer later.</p> Signup and view all the answers

    How does a counteroffer differ from a mere rejection of the original offer?

    <p>A counteroffer introduces new terms and negates the original offer.</p> Signup and view all the answers

    Which of the following is NOT an essential ingredient for a legally enforceable contract?

    <p>Formal written documentation of the contract.</p> Signup and view all the answers

    What happens when Bandara proposes to pay 450,000 Rupees instead of accepting Anura's offer?

    <p>This response constitutes a new offer and a counteroffer is created.</p> Signup and view all the answers

    What is one primary legal requirement for a valid offer?

    <p>It must be communicated to the offeree.</p> Signup and view all the answers

    When is an advertisement considered a binding offer rather than an invitation to treat?

    <p>When it states a specific price for goods or services.</p> Signup and view all the answers

    What distinguishes an invitation to treat from an offer?

    <p>An invitation to treat can lead to a negotiation but does not create legal obligations.</p> Signup and view all the answers

    In the case of Hyde Vs Wrench, what was the outcome due to B's counteroffer?

    <p>There was no contract because B rejected A's original offer.</p> Signup and view all the answers

    What is an example of an invitation to treat?

    <p>A store displaying items with prices marked.</p> Signup and view all the answers

    Which of the following statements best describes advertisements in relation to offers?

    <p>Advertisements are invitations to treat and invite offers from consumers.</p> Signup and view all the answers

    What role do auctions play in the context of offers and invitations to treat?

    <p>The auctioneer's request for bids is an invitation to treat.</p> Signup and view all the answers

    What situation exemplifies a valid offer?

    <p>A farmer agrees to sell beans for $100 if the customer confirms immediately.</p> Signup and view all the answers

    Which statement about the tender process is true?

    <p>Tender invitations are generally considered invitations to treat.</p> Signup and view all the answers

    In the case of Lallyet VS Negris & Co., what was determined about the advertisement of ham?

    <p>The advertisement did not create legal obligations.</p> Signup and view all the answers

    Study Notes

    Offer and Invitation to Treat

    • A shopkeeper's display of goods is not a definitive offer but rather an invitation to treat.
    • A customer cannot insist on purchasing a product by claiming acceptance of an offer.

    Auction Sale

    • In Payne vs Cave (1789), an auctioneer's request for bids is classified as an invitation to treat.
    • The bid itself constitutes an offer which the auctioneer can accept or reject.

    Tender

    • A tender notice is also an invitation to treat, not an obligation to accept the highest offer or to purchase from the lowest.
    • For a valid offer, it must be communicated to the offeree who then has the chance to accept or reject it.
    • In Harris V Nikerson (1873), advertisement for sale was deemed an invitation to treat, resulting in no binding contract when the sale was canceled.
    • Damages were not awarded since there was no valid contract from the advertisement.
    • An offer must show intent to create legal relations and is different from invitations to treat, negotiations, and puffery.
    • Joseph's advertisement of a car for sale is an invitation to treat, as it does not bind him to sell if someone expresses interest.

    Counteroffer vs Acceptance

    • Supuni's offer to Anushka becomes a counteroffer when Anushka asks for time to think.
    • Acceptance must align with the original offer; any variation (like proposing a lower price) constitutes a counteroffer.

    Elements of a Legally Enforceable Contract

    • Essential ingredients include offer, acceptance, consideration, intention to create legal relations, and legal capacity.
    • Each ingredient must work cohesively for a binding agreement to form.

    Valid Contract Analysis

    • Anura's offer of his laptop valued at 500,000 Rupees is met with Bandara proposing 450,000 Rupees, making it a counteroffer.
    • Acceptance must mirror the terms of the original offer to create a valid contract.

    Invitation to Treat Explained

    • Invitations to treat signal a willingness to negotiate but do not equate to an offer that can be accepted.
    • Examples include price-marked goods, auctioneer requests, and calls for tenders.
    • Hyde vs Wrench (1840) illustrates that a counteroffer rejects the original offer and cannot later lead to a contract based on the initial terms.
    • In Lallyet VS Negris & Co. (1911), advertised products were ruled as invitations to do business and not binding offers, confirming regulatory standards in trade practices.

    Understanding Customer Interactions

    • Displaying goods with price tags in a shop is an invitation to treat, and customers make offers to purchase those goods.
    • The nature of advertisements and displays reinforces the need for clarity about whether an offer exists or if merely negotiations are underway.

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    Related Documents

    Session 09: Main Requirements of a Valid Contract PDF

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