Theory of contract law Essay Example | Topics and Well Written Essays - 2250 words

Theory of contract law - Essay Example The primary object of courts while construction of a contract is to determine and give effect to the intention of the parties. This fact is elucidated by the eminent judges such as Chief Justice Brian in 1478 held 'that the intention of a man cannot be tried, for the Devil himself knows not the intent of a man'1. And nineteenth century judges such as Lord Eldon who in kennedy v Lee said that it was not the task of his 'to see that both parties really meant the same thing, but only that both gave their assent to that proposition which, be it what it may, defacto arises out the terms of their corresondence.2 And Austin said that 'when we speak of the intention of contracting parties, we mean the intention of the promissor or the intention of the promisee' and he also added that 'the sense in which it is to be inferred from the words used or from the transaction or from both that the one party gave and the other received it'3.Before essaying the subject it is significant to discuss conc isely on other prime factors of a valid contract to which intention of the parties is related to, such as Offer and acceptance and consideration.Offer: Consensus ad idem is the maxim on the offer and acceptance, which means meeting of minds. A contract is made out of an agreement and an agreement is made out of offer and acceptance that means in an agreement one party makes an offer and the other party accepts it. An offer may be an advertisement or a definite offer either to a particular person or to public at large. The law is settled in this respect in Carlill v Carbolic Smoke Ball Co4 in which the company made an offer through an advertisement offering 100 to any person who is affected with influenza after using smoke balls. The plaintiff Carlill has claimed for 100 from the company since she was effected influenza. The company defended that (i) the transaction was only a bet with in the meaning of gaming acts (ii) the advertisement was not intended to create a binding obligatio n (iii) there was no offer to any particular person (iv) no acceptance is notified by the plaintiff. The court of appeal has rejected the grounds taken by the defendant and allowed in favour of the plaintiff. The court while allowing held that there was an offer to the world at large, an offer can be made to the world at large and it also held that by making an offer to the world a contract is made with a limited parties who perform the conditions. Here we can observe that the intention of the advertisement was with an intention to create a legal obligation that is the reason the court has come to a conclusion of existence contract. Offer and an invitation to treat - Intention: The law of contract makes a distinction between offer and an invitation to treat. An invitation to treat does not make a binding contract. When a person responds to an invitation to treat makes an offer. The courts have made distinction between offer and an invitation to treat in auction sale and advertisements. In offer the intention of the parties to create legal obligation where as the in invitation to treat this intention to create legal obligation is premature. Harris v Nickerson5 In this case it was held that an advertisement specifying that goods will be sold by auction do not constitute a promise or offer. It is settled law that an advertisement without further qualification is not an offer to sell the goods but it is only an invitation to treat. The court observed the fact that the intention of the party making an advertisement is to receive the offers from the willing parties and he would select the best offer and intends to withdraw his invitation if he is not receiving the offer he is anticipating or he could accept, therefore there is no legal relationship exists at that particular point of time. The distinction between the offer and invitation to treat was clearly illustrated in Gibson v Manchester City of Council6. Acceptance: When one person makes an offer and such offer is accepted then becomes an agreement. Acceptance is an