Word Count: 1415 The legal issue over if there was a formation of a contract between Mary and Steve is whether Mary's inquiry into how the payment could be made can be regarded as a counter offer which would revoke's Steve's original proposition and if Steve's subsequent ending of the call negated the formation of a contract. An agreement to purchase an item forms a bilateral contract which amounts to an exchange of promises between the two parties. 1 For a bilateral contract to be valid then there must be an offer and an acceptance of that offer; a party can invite an offer through methods such as advertisements, this results in an invitation to treat and negates the party from being legally bound to the other.2 The case of Partridge v Crittenden established that advertisements are just an invitation to treat and thus provide no obligation for the seller to sell the goods, therefore in this scenario Steve's advertisement to sell the toy cars and his price of £20 was an invitation to treat rather than an offer that he could be legally bound to.3 There must also be acceptance to form a legally enforceable contract, this acceptance must be communicated clearly by the party as per the case of Powell v Lee; if the party attempts to counter offer rather than accept the original terms then the case of Hyde v Wrench established that this supersedes and rejects the initial offer.4 Despite a counter offer rejecting the initial offer, an inquiry into the terms of the offer does not amount to a rejection as per the case of Stevenson Jaques & Co, V McLean which suggested that there was a valid inquiry as long as there was not specific wording to indicate a rejection or counter offer.5 1 United Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd [1968] 1 All ER 104, [1968] 1 WLR 74. 2 [1968] 1 WLR 1204. 3 Ibid. 4 [1840] 49 ER 132; [1908] 99 LT 284. 5 [1880] 5 QBD 346.
In this scenario Mary accepted Steve's price for the toys yet made an inquiry into whether the payment could be made with cash at arrival at the store, this was not a counter offer as the Mary phrased the inquiry as a question and did not attempt to change the specific terms of the offer such as the price, thus the original offer was still accepted. The Uniform Laws on International Sales Act 1967 stated that acceptance which contains conditions or modifications would be equivalent to a rejection except when these terms do not materially alter the terms of the contract and since Mary's acceptance did not explicitly alter the terms but rather delayed payment until she picked up the item then it did not equate to a rejection.6 Despite this inquiry not amounting to a counter offer Steve did not state his acceptance to the change in payment method, the case of Felthouse v Bindley established that silence does