GSP165 Contract Law Essay


At the end of these units, you are expected to:
· Understand the basic elements of the Law of Contract, together with matters that interfere with the making of a valid contract, matters that constitute breach of contract and the remedies for breach of contract.
· Understand the principles of Family Law, list the matters that would render a marriage void or voidable, describe how a valid marriage might end, list the continuing obligations after a marriage is dissolved and explain family violence and the remedies available to victims of family violence.
· Identify the various aspects of Administration of Personal Estate: (1) upon death, whether or not the deceased died leaving a Will; (2) in the event that one loses mental capacity to do so


Consideration is a element which is required for the formation of a valid contract and without a consideration a contract cannot be formed. However it has to be noted that the consideration does not have to be the market value of the other consideration which is being provided. The law states that the consideration has to be present for the formation of a valid contract but it does not have to be sufficient. Thus a consideration which is adequate and present will make a contract it does not require to be sufficient and match the market value. These provisions had been discussed by the case of

Chappell v Nestle [1960] AC 87. In addition an existing contractual duty or a duty at law is not a balid consideration.

The consideration always moves from the promisee to the promisor. In a contract both the parties need to provide consideration to each other for the formation of a contract. The essence is that one party needs to gain something and loose something simultaneously

There are a few consideration which are needed to be avoided. These include a past consideration which is considered not to be a good consideration as provided by the case of

Re McArdle (1951) Ch 669. Thus a person who has done something in the past cannot use it as a consideration to form a contract. Along with past consideration part consideration also needs to be avoided as they are not valid as per the case of Pinnel's case 1602 5 Rep, 117. In addition any illegal consideration also needs to be avoided.

The advertisement which has been done by Eunice with respect to the sale of his music system is not to be considered as an offer. This is because it had been clarified by the court in the case of Partridge v Crittenden [1968] 1 WLR 1204 that when a person makes an advertisement it is not considered to be an offer. In case the advertisements are considered as an offer then it would be unreasonable for the person making it as they would be bound by any person who tries to accept the advertisement as an offer. Thus Eunice’s advertisement is invitation to treat.

(1) In the given situation there has been no acceptance or revocation of the offer done by Sean. This is because as per the case of Hyde v Wrench (1840) 49 ER 132 it was not a counter offers having no additional terms. In addition the offer had not been accepted as there was no confirmation.

(2) The offer would have been revoked in case there was a communication done to Sean by --- that she is not willing to carry out the offer on the terms provided. This statement had to reach Sean before an acceptance is made by him.

In the given situation she would not obliged to hold the system till the next day as here was no official offer which had been made by Sean for the purchase of the system. In addition the advertisement was an invitation to offer which does not have any form of legal significance. Where there was no offer at all and a mere inquiry had been made by Sean there is no legal obligation which arises on the part of Eunice to keep the system. However in situation where a legal offer would been provided by Eunice for the purpose of selling the system to Sean valid till the next day she would had the obligation to hold the system. In addition if an advance would have been provided which would be a consideration to hold the system for the next day Eunice would have had the obligation of keeping the system.

No in the given situation no contract had been breached by Eunice by letting Samuel view the system next day as she entitled to do so. This is because there had been no offer which had been made by Eunice to Samuel and there was no contract formed. In the case of Smith v Hughes (1871) LR 6 QB 597 it had been stated by the court that for the purpose of forming a valid contract there has to be offer and acceptance. As there was no offer and acceptance in this situation no contract had been formed and thus no contract had been breached by Eunice.

No there was no valid contract which had been made between Eunice and Sean. For the formation of a valid contract there are five elements which are required. These elements include offer, acceptance and consideration. Here as it has already been discussed above an invitation to treat had been made by Eunice for the purpose of selling the system. There had been no offer which had been made in relation to the purchase of the system by Sean as his words were mere inquiry. A reasonable person would not consider such words to be an offer as per the case of Smith v Hughes (1871) LR 6 QB 597 and thus the objective test has not been satisfied in the scenario. There was no acceptance and there was also no consideration provided. Thus as no element of the formation of contract is present there is no contract.


Hyde v Wrench (1840) 49 ER 132

Partridge v Crittenden [1968] 1 WLR 1204

Smith v Hughes (1871) LR 6 QB 597

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