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Mad is in business selling microcomputers. Following a major refurbishment of his shop premises he publishes the re-opening of his shop with a large newspaper advertisement on 30 august. Formalities are a general rule contracts do not need to comply with any sort of formalities. Thus, while it is more difficult to prove contracts that are entirely or partly oral, this is a matter of evidence and procedure only and is not relevant to the validity of a contract.
A contract of sale may be made in writing or by word of mouth, or partly in writing and partly by word of mouth, or may be implied room the conduct of the parties: section 5(2), SAGA 1957. An invitation to treat is an action inviting other parties to make an offer to form a contract. These actions may sometimes appear to be offers them, and the difference can sometimes be difficult to determine.
The distinction is important because accepting an offer creates a binding contract while “accepting” an invitation to treat is actually making an offer. Advertisements are usually invitations to treat, which allows sellers to refuse to sell products at prices mistakenly marked. Advertisements can also be considered offers in some specific cases. Auctions are sometimes invitations to treat which allows the seller to accept bids and choose which to accept.
However, if the seller states that there is no reserve price or the reserve price has been met, the auction will be considered an offer accepted by the highest bidder. A proposal is an expression of willingness to do contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the other person to whom it is addressed. Section 2(a) Contracts Act 1950.
A proposal is made when one person signifies to another his willingness to do or abstain from doing, with the view to obtaining the assent of that to the act or abstinence, he is said to make a proposal. Although the word proposal is used in the act, it carry the same meaning as “offer” in the English law. It can be inferred that the proposal has become a promise and then he is called the promissory and the person accepting the promise is called the promise. An Acceptance is final and unqualified expression of assent to he terms of an offer.
A mere acknowledgement of an offer would not be an acceptance, nor is there an acceptance where a person who has received an offer to sell goods merely relies that it is his intention to place an order. The main reason for the rule is that it could cause hardship to an offer or if he is bound without knowing that his offer had been accepted. However, there will be no contract if the communication is made by the third party without the authority of the offered. Business law By evensong