Verbal Contract
A verbal contract is contract made through between two parties agreeing through speaking. This kind of contract is often done between friends or low risk purchases such as products in a shop, like if a person buys a drink that is a verbal agreement.
Some media forms of verbal contracts are over the phone, face to face, video chat.
Written Contract
Written contracts are more common in the business world. These are contract that are written down. Some examples of these type of contracts are for the sale of land, regulated hire and credit agreements and employment contracts must be written and signed by all parties.
Some media forms of a written contract is through email, fax, pen to paper, printed.
Invitation to Treat
Invitation to treat is where a company or individual advertises or displays a good or service for sale to entice people to buy.
When a company or individual advertise goods or land or services for sale and are not treated by the courts as indicating the intention make an offer.
These advertisements invite possible customers to make an offer which then can be accepted or not. If there’s no acceptance there’s no contract as acceptance is one the key features of a contract.
Offer and Counter Offer
After a person sees a product and gives in to invitation to treat they make an offer to the person or business selling the product. This is them showing willingness to make a contract with that person once accepted. They can offer the amount that was displayed or try a different deal. The person selling the product can decline the offer so it is then as if the offer never existed however they can make an offer back if they really want to sell the item. This is then called a counter offer.
For an offer to be valid three essential things have to be present. These are:
Clearly stated terms
intention to do business
Communication of that intention
Offeror and Offeree
An offeror makes the offer to the individual advertising a good or service. The offeree is the person who accepts or declines that offer made by the offeror
Acceptance
When the offeree accepts the offerors offer they are then agreeing to follow all the terms of the offer. For the acceptance to be legal there are three rules that need to be followed which are:
It must be a ‘mirror image’ of the offer
It must be firm
It must be communicated to the offeror.
The acceptance of the offer must be communicated to the offeror in the in the way the offeror asked. Like if the offeror asked for acceptance by verbal, and then the acceptance would be complete when the offeree said they accept either by phone, or face to face or video call. If they asked for written acceptance then by email, fax, pen to paper, printed, posted.
Offer and Acceptance
Essentially there is three possible ways in which offer and acceptance may proceed.
First being that and offer is made and there is an unconditional statement of acceptance, then the offeree accepts and then a contract is made.
Second is that an offer is made and there is an unconditional statement of acceptance, the offeree then rejects the offer and proposes a new one which becomes a counter offer.
Third is that an offer is made and the offeree rejects, the offer is gone and there is no contract.
Scenario
Shop has a sale sign up for 50% off
I take a nosey and see a piece of clothing I like in the sale
I go to the cash register to pay
The cashier scans the product and tells me how much it is
I then hand over the correct amount and the cashier gives me a receipt
In the scenario the shops sign for 50% off items of clothing is an invitation to treat. When I go in and see an item of clothing marked at a certain price this still invitation to treat. When I go to the cash register to pay I am then making an offer and I am then the offeror. When the cashier scans the product and tells me how much it is and I hand over the money that person then is offeree and can reject my offer or accept. Once the cashier accepts my money and gives me back the receipt that is them accepting and a contract is made and done.
by
viper17 (student)
