Contracts Case Study

Contracts are based on agreements which arise from offers and acceptances where, in simple terms, one party makes an offer and the other party accepts the offer. The basic purpose of a contract is to establish agreements made by the parties involved while also establishing their rights and duties according to the agreement made knowing that any breach would be dealt with accordingly. For a contract to be legally binding or enforceable, some elements need to be considered, elements such as: offer and acceptance, consideration, capacity, certainty, and intention to create legal relations. Offers are valid when the terms of the contract are clearly stated. Also, an offer will include the intention to do business and as a final feature the offer

No offer was made to David so therefore no contract was formed. David offered to pay 10% more than the initial price that was listed and stated that he wasn 't going to be able to pick up the car until a month later, this shows he had made a counteroffer. He made an offer which was different from that which was originally stated and therefore the original offer had been destroyed meaning that the original offer was no longer open for David to accept. The case of Hyde v Wrench makes it clear that a counter offer amounts to a destruction of the original offer so therefore, no contact is formed. In this case, the defendant offered to sell his farm for a certain price but the claimant offered to buy it for a price lower than what was listed.The court held that where a counter offer is made this destroys the original offer so that it is no longer open to the offeree to accept so there was no contract.To create a contract, there must be common intention of the parties to enter into legal obligations, which would be mutually communicated in an expressed or implied manner. Rose and Frank Co v JR Crompton & Bros Ltd clearly rebutted the presumption which normally exists in commercial agreements that the parties intend to be legally