Word count: 1469 To enforce a legally binding contract, four elements must be proved: there is an offer, acceptance, consideration, and intention to create legal relations. Without these four components, a valid contract will not exist, therefore each must be satisfied. This essay will be advising Paul as to whether he has a legally enforceable contract with Vera, Kate, and Jack. A bilateral contract is an "agreement between two parties whereby each side agrees to fulfil their side of the bargain."1 They will involve equal obligation from the offeror and the offeree. Any sales agreement are common examples of a bilateral contract, meaning that, by Paul advertising to sell his car in the newspaper, this would form a bilateral contract. The first element of a contract that must be fulfilled is that there was an offer. An offer must be certain, communicated, and objectively ascertained. The advertisement in the newspaper was merely an invitation to treat, with the case of Partridge v Crittenden 2 establishing this. An invitation to treat differs from an offer because this is only an indication that a party is prepared to receive offers, whereas an offer is a definite promise to be bound. If the "reasonable person would have thought that the offeror was promising to be bound, then he is promising to be bound". 3 This objective test does not examine what each party may have thought they were agreeing to, but on the perception of that intent. Applying this, it is clear that Paul was inviting a party to make an offer, considering no price or contract conditions were stated in the advertisement. To constitute an offer, Paul must have shown a desire to contract on certain terms and to be legally bound by those terms. As a result of this, Vera, Kate, nor Jack, can claim there is a contract until they provide an offer and Paul provides acceptance. The limited stock argument, proposed by Lord Parker, discusses how if 1 Adam Hayes, 'Bilateral Contract' (Investopedia, February 27 2021) <https:// www.investopedia.com/terms/b/bilateral-contract.asp> accessed 28 February 2021. 2 [1968] 2 All ER 421 3 Paul S.Davies, JC Smith's The Law of Contract (2nd ed, OUP 2018) 23.
Word count: 1469 an advertisement was an offer, it means that everyone who accepts that offer is entitled to the goods offered, and if there is not an unlimited supply of the goods, then that cannot be the intention of the advertiser. Relating this principle to Paul, his advertisement could not have been an offer because he simply has one car to offer and could not possibly provide each individual with a car. This is important to note because without an offer there cannot be a valid contract, therefore until one of the individuals makes an offer, they cannot claim that an enforceable contract exists. A counter-offer is an "offer made in response to a previous offer by the other party during negotiations for a final contract."4 The case of Hyde v Wrench 5 clarified the law