Law for Accounting assignment Essay Example | Topics and Well Written Essays - 4000 words

Law for Accounting assignment - Essay ExampleFormation of Contract is based on firstly, an offer, which moldiness be followed by an acceptance. Secondly, there must be consideration, intention to create legal relations and sufficient demonstration. The main starting point for the conclusion of a contract can be found in Smith v Hughes1, where both a subjective as well as objective sort was laid down in order to determine the existence of a contract. The subjective test determines the actual intention of the contracting parties, whereas the objective test ascertains what had been express by the parties, what they did and not and what their actual intention of saying or doing was. As per Professor Atiyah, the issue of offer and acceptance has been determined by courts in twain ways, that is reason forwards and reason backwards, the former is where existence of offer and acceptance are determined first and then the conclusion on the contend is made the latter is where the courts ca n reason from the appropriate solution back to the legal concepts of offer and acceptance. An offer has been defined as an expression of willingness by one(a) ships company known as the offeror, to contract or be bound on stated terms, provided that such terms are accepted by the party to whom the offer is made that is the offeree. The courts have drawn a distinction amongst an offer and an invitation to treat, as the latter is merely an expression of willingness by one party to enter into negotiations and is not unconditional and there is a lack of intention to create legal relations. The most important and land mark cases which distinguished in the midst of an offer and invitation to treat are of Gibson v Manchester City Council2 and Storer v Manchester City Council3. In Gibson, where treasurer had sent a letter to Mr. Gibson, stating that council may be alert to sell the house, was held to be an invitation to treat, which was further confirmed by the fact that Mr. Gibson wa s asked to make a formal application to purchase the house. The courts therefore took into account the correspondence between the parties. However, in Storer the courts found that a contract had come into existence as negotiations had moved beyond what had happened in Gibson but an exchange of contracts had not taken place. These cases clear point out that fact that judges can interpret and differ in the results and so the decision would be said to be based on its own facts. An offer should be differentiated from a mere statement of price that is an enquiry as to the price. (Harvey v. Facey)4 Invitation to treat has been defined as an expression of willingness of a party to enter into negotiations with another with the hope that a contract would be reached at the end of such negotiations. (Fisher v Bell)5. As for advertisements, it has been strictly said to be an invitation to treat (Partridge v Crittenden)6, however, the courts have interpreted advertisements in a manner which all ows for certain exceptions to be created and the main reasons for that has been cited to be intention to be bound and certainty (Carlill v Carbolic Smoke Ball Co.)7. Further, the advertisement of an auction sale is generally only an invitation to treat (Harris v Nickerson)8. The opinions as to when an offer is made have differed. In respect of the advertisement that had been placed by Serena in the Sunday Times Style, the first and foremost question is whether such advertisement was an invitation to