Scots Law of Contract

All of the case studies are concerned with the Law of Contract, specifically the formation of a contract and the differences between an invitation to treat and a contract. We will investigate each consumers’s specific contract or lack thereof individually and advise Bruce on his legal position. A contract is an agreement between two or more parties which in Scotland does not need to take a specific form, as a spoken agreement is still equally as enforceable as a written contract in certain circumstances such as in most social and domestic arrangements.

A contract creates a legally binding bond between the parties involved. Contracts are made everyday sometimes without even realising it from buying a coffee to buying a house. A contract is formed bilaterally when an offer has been unconditionally accepted by all parties involved leading to consensus in idem and is not to be confused with a promise which is a unilateral agreement requiring only one party to make the promise. In Bruce’s case some of the customer’s mentioned have not actually entered into a contract but rather have either received an offer or an invitation to treat.

An offer unlike a contract is not legally enforceable but rather an invitation to enter into a contract and an invitation to treat is not an offer but rather an invitation to make an offer. In the case of Carlill v Carbolic Smoke Ball Company (1893) The Carbolic Smoke Ball Company released an advertisement stating that a ? 100 reward would be paid to any person who contracted influenza, colds or any disease caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied with each ball.

Despite the claims one of the companies customers Mrs Carlill caught the flu and sued the Carbolic Smoke Ball Company for the ? 100 they refused to pay her stating that their advert was in fact a legally binding contract which she had accepted by purchasing the product. The above case could be applied to Bruce as his failure to properly state the conditions in his advertisement will result in him having to honor his original promise of selling the “Slow Patrol” CD to as many customers as ave a flyer at the price stated on the advert. Although most modern adverts are treated as an invitation to treat this particular advert would be considered a unilateral promise as Bruce has promised to sell the CD to anyone who produces the flyer at the price of ? 1. 99. Unlike an offer a promise is the product of one persons intention and no acceptance is needed to create a binding contract where as an offer can be revoked until agreed upon.

If Bruce had not put such specific terms in the advert simply offering the product at the wrong price he could have claimed it was an invitation to treat but as it stands Bruce is legally obligated to follow through with his unilateral promise. To quote the court in regards to Hunter v General Accident Fire and Life Assurance Corporation (1909) “… when a general offer addressed to the public is appropriated to himself by a distinct acceptance by one person, then it is to be read in exactly the same was as if it had been addressed to the individual originally. In the case of Wolf and Wolf v Forfar Potato Co Ltd (1984) Forfar sent a telefax to Wolf & Wolf offering to sell potatoes at a specific price but the offer was only valid until 5pm the next day Wolf & Wolf replied accepting the offer but with extra conditions to which Forfar did not accept and when Wolf & Wolf later tried to accept the original offer there was no reply by Forfar and the potatoes were not sent. Wolf & Wolf sued arguing that Forfar were in breach of contract.

The court held that Wolf & Wolf’s first “acceptance” was a counter offer and due to the law in Scotland this had rejected Forfar’s offer and put in place a new offer which Forfar had rejected as Forfar’s offer had lapsed upon rejection Wolf & Wolf’s second attempt at accepting the original offer could not result in a contract being made as it was a new offer which Forfar had chosen not to accept therefore no contract existed between the parties.

The area of Law concerned in this case is The Law of Contract specifically relating to the revocation of an offer and counter offers. The case Wolf and Wolf vs Forfar Potato Co Ltd (1984) directly links to the case between Bruce and Ken. As Bruce is once again dealing with the Law of Contract specifically the non-acceptance of an offer, he is under no legal obligation to sell Ken the rare vinyl at the original price of ? 40. When Ken rejected he original offer he created a counter offer which in Scots law is a completely new offer and caused Bruce’s original offer to lapse and was up to Bruce to decide wether or not to accept the new terms, after Bruce rejected the counter offer all offers between Bruce and Ken had lapsed. When Ken came back insisting that there was a contract between them and he was entitled to the album Bruce was in fact under no legal requirement to give Ken the vinyl as all offers had lapsed and no contract existed between then.

In the case of Fisher v Bell (1961) a shopkeeper had displayed a flick-knife in his window with a price tag next to it but under the restriction of Offensive Weapons Accontents Restriction of Offensive Act (1959) it was illegal to sell hire or offer to sell or hire any knife which had a blade that opened automatically, on December 12 1959 the shopkeeper was brought to trial alleging that the defendant had broken the law by offering to sell the knife in his shop.

The shopkeeper was acquitted on the basis that by displaying the knife it was an invitation to treat and not an offer to sell. In regard to Stella we are once again dealing with the Law of Contract specifically relating to an invitation to treat rather than an offer. When Stella was trying to purchase the CD for the advertised price of ? 1. 39 instead of ? 13. 99 she in fact had no legal authority to do so as the price offered was an invitation to treat and not a contract but rather an invitation to enter into one.

The contract is not created until a price is agreed and the item has been paid for. Stella is basically making Bruce and offer to pay ? 1. 39 for the CD as that is what it has been advertised as and by Bruce not accepting the offer due to a mislabeling issue a contract has not been formed. As in the case of Fisher v Bell (1961) just because there is a price tag next to an item or on an item the establishment is under no obligation to sell at said price.

In conclusion in regard to the first legal question Bruce is legally bound to sell the Album at the price stated in the advert as it was a unilateral promise which is legally binding contract and not able to be revoked like a offer. In regards to Ken after he counter offered Bruce’s original offer to buy the rare vinyl Bruce was no longer under any legal obligation to sell the rare album to Ken as the offer had lapsed meaning no contract was in place.

Finally Stella is unable to take legal action against Bruce and Bruce does not have to sell the CD to Stella at the advertised price and it was an invitation to treat and not an offer and although the two are similar when dealing with an invitation to treat rather than an offer there is no liability to accept. CITATIONS Carlill v Carbolic Smoke Ball Company (1893) Wolf and Wolf v Forfar Potato Co Ltd (1984) Hunter v General Accident Fire and Life Assurance Corporation (1909) Fisher v Bell (1961) BIBLIOGRAPHY Black, G (Editor) – Business Law in Scotland 2nd edition Crossan & Wylie – Introductory Scots Law 2nd edition