Contract Law Matters For Joshua

Introduction

This essay contains advice to Joshua related to three different situations which pertain to law of contract. These areas relate to invitation to treat, intention to create binding legal relations, and unilateral contracts. These issues arose in Joshua’s interaction with other parties and the advice to Joshua is based on relevant authorities in law of contract.

The shoes displayed in the Topshoes store were an invitation to treat and not an offer.

There is a significant difference between an offer and an invitation to treat. An offer is the significance of the offeror’s willingness to be bound by terms of the offer and is not open to negotiation (Poole, 2012, p. 54). On the other hand, an invitation to treat is signification of a willingness to make an offer or to commence negotiations (Poole, 2012). This is as per the authority laid down in Pharmaceutical Society of Great Britain, wherein the court held that advertisement of goods for sale are not offers but mere invitation to treat by the shopkeeper (Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1952] 2 QB 795, 1952). The same principle was also laid down in cases decided later by the courts (Fisher v Bell [1961] 1 QB 394, 1961; Partridge v Crittenden [1968] 1 WLR 1204., 1968). Consequently, it is a well-established principle of law of contract an advertisement of products in shop windows or in other ways, is not an offer but an invitation to offer.

Applying this principle to the current scenario, Joshua saw the shoes in the display at with a price tag attached saying £90. This was not an offer by Topshoes but an invitation to treat. Joshua going to the payment counter with the shoes would be an offer by Joshua to Topshoes.

Topshoes: Acceptance by Joshua for Lucci’s shoes for £90

In this case, acceptance did not take place and Joshua cannot purchase the shoes for £90.

In Fisher, Lord Parker specifically observed that a display of an article with a price on it in a shop window is not an offer by the shopkeeper and for that reason, there cannot be an acceptance to it for the purpose of constituting a contract (Fisher v Bell [1961] 1 QB 394, 1961, p. 399). An invitation to treat does not contain an intention to be bound by an acceptance of a second party as seen in the case of Gibson, where the Council’s formal invitation to be willing to sell the house was considered to be an intent to invite offer and was not an offer in itself (Gibson v Manchester City Council [1979] UKHL 6, 1979).

Applying the above mentioned principles in the present situation, the shoes were displayed in the shop for £90. When Joshua went to the cashier, the latter informed him that the shoes were for £350. Joshua’s asking to buy the shoes for £90 is not an acceptance.

Joshua’s mother: Promise to pay

An intention to create a legally binding relationship is a prequisite for constituting a contract between two parties (RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Co. [2010] UKSC 14, 2010). One of the indications for an intention to create a legal relationship between two parties is consideration. Consideration refers to the promise made by two parties to do something for the benefit of each other, and is thus is a quid pro quo or a promise in exchange for a reciprocating promise (Edmonds v Lawson [2000] QB 504., 2000). When there is a consideration component in the promises made by parties, such consideration can establish the intention to create legally binding relations (Edmonds v Lawson [2000] QB 504., 2000).

Applying this promise to the present situation, Joshua was promised by his mother that she will pay £25,000, if he agreed to attend University of West London. Therefore, the consideration for Joshua performing the act of attending University of London is that his mother will pay him the specified amount. In return of that promise, Joshua has applied for a place on the Graduate Diploma in law and was accepted. He began his studies there last September.

Joshua’s mother: Obligation to pay

This obligation to pay arises under the law of promissory estoppel. For the application of promissory estoppel, there are three conditions to be fulfilled: unequivocal promise by the promisor; change in position of the promisee as a result of the promise; and inequitable for the promisor to go back on the promise ( Central London Property Trust Ltd v High Trees House Ltd. [1947] KB 130 , 1947).

The mother made a promise to pay him the specified amount. Joshua has performed the condition of studying in the college of her choice and taken admission in that college and this means that there is a change in his position. Therefore, it is unequitable for the mother to not pay. She is now bound to perform her part of the contract, which is, to give him £25,000.

A unilateral contract involves only the promisor, in a way that the promisor makes a promise which is open to the whole world and invites anyone to perform the required action (Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1., 1892). The unilateral contract does not require the offeree to make an acceptance, because it is in the performance of the act itself that the acceptance is made by the offeree. In unilateral contracts, it is essential that the offeror had the intention of making a legally binding offer (Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1., 1892). Authorities on unilateral contract show that the offer stands open till the offeree does not start performing the terms of the contract, which means that the offeror cannot revoke the offer (Daulia Ltd v Four Millbank Nominees Ltd [1977] EWCA Civ 5 , 1977; Errington v Errington Woods [1952] 1 KB 290 , 1952). Where the promise is accompanied with consideration the offeror who promises to keep the offer open, is legally required to keep it open (The Brimnes [1975] QB 929., 1975).

Applying the principles to the present scenario, Gym 24/7 offered free membership for 3 months to the first 10 people who would complete 20 press ups in 60 seconds on 1st January. This was a unilateral contract because the gym offered to be bound by a specific condition if the offeree would perform the terms of the contract. Joshua’s completion of the challenge signifies the acceptance to the unilateral contract.

Joshua’s entitlement to three months free membership

Joshua is entitled to the three months free membership at Gym 24/7 because he has performed the terms of the unilateral contract made by Gym 24/7.

When Gym 24/7 advertised that they would give this free membership to the first ten people to complete 20 press ups in 60 seconds on 1st January, this was an offer made by them (Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1., 1892). When Joshua performed this condition, this was an acceptance of the offer and binds the gym to give him the free membership. This obliges the gym to provide the free membership to Joshua as per the principles related to unilateral contract (Great Northern Railway Co v Witham [1873] LR 9 CP 16, 1873; Bowerman v Association of British Travel Agents Ltd CA Nov 1995., 1975).

Conclusion

Based on the authorities discussed in this essay, there are three conclusions that are made out. First, Topshoes made an invitation to offer when they displayed the shoes. Second, Joshua’s mother made a legally binding promise to Joshua when she offered to pay him £25,000 in return for his taking admission in College of West London. Third, Gym 24/7 made a unilateral contract with their advertisement, and by performing the terms of the contract, Joshua gave his acceptance and made a legally binding contract.

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References:

• Bowerman v Association of British Travel Agents Ltd CA Nov 1995. (1975).
• Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1. (1892).
• Central London Property Trust Ltd v High Trees House Ltd. [1947] KB 130 (1947).
• Daulia Ltd v Four Millbank Nominees Ltd [1977] EWCA Civ 5 (1977).
• Edmonds v Lawson [2000] QB 504. (2000).
• Errington v Errington Woods [1952] 1 KB 290 (1952). Fisher v Bell [1961] 1 QB 394 (1961). Gibson v Manchester City Council [1979] UKHL 6 (1979). Great Northern Railway Co v Witham [1873] LR 9 CP 16 (1873). Partridge v Crittenden [1968] 1 WLR 1204. (1968). Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1952] 2 QB 795 (1952)
• Poole, J. (2012). Textbook on Contract Law . Oxford: Oxford University Press . RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Co. [2010] UKSC 14 (2010). The Brimnes [1975] QB 929 (1975).