LAWS1120 Study Guide - Final Guide: Puffery
Chapter 2 - Introduction and Contractual Formation - Contract Law
Contract - An agreement made between two or more parties that creates legal rights and
obligations that courts will enforce.
Basic Function of Contract -
→ Ensure agreements are HONORED, if not, COMPENSATION for losses caused by the
breach are paid.
→ Provide remedies for breach
→ Provide some certainty & stability in making agreements
Forms of Contract - Deeds, Written Agreements, Verbal Agreements, Writing and Verbal,
Implied from behaviour
6 Essential Elements:
→ Intention to create a contract, Offer & Acceptance, Consideration, Genuine Consent,
Capacity, Legality
Contractual Formation/ Offer & Acceptance → Offer + Acceptance = Agreement
→ Offer was made to a party which was properly accepted
OFFER - A written or verbal proposal by one party to enter into a legally binding contract with
another with the intention that the proposal made would be legally binding when accepted.
→ Offer is created, you ACCEPT or REJECT. If you ACCEPT, it becomes legally binding
NOT AN OFFER
→ Invitations to Treat (Shop displays, catalogues, ads)
a. Willingness to deal or trade.
b. Invitation to treat is an initial approach to others inviting them to make an offer which
may or may not be accepted.
Pharmaceutical Society of GB v Boots Cash Chemist (Southern) Ltd (1952) pg 30
→ Puffery
a. An advertisement may be interpreted as being an “offer” or regarded as containing
nothing but sales talk or puffery.
Leonard v PepsiCo 88 F (1999) pg 31
→
Supplying information/responding to an inquiry
Harvey v Facey (1893) AC 552 pg 30
→ Auction sales
a. Auctioneer’s call for bids is only an invitation to treat, where a bid is made, such
constitutes an offer from the bidder to buy at that price. Auctioneer may then either
accept or reject the bid on behalf of the principal.
Document Summary
Chapter 2 - introduction and contractual formation - contract law. Contract - an agreement made between two or more parties that creates legal rights and obligations that courts will enforce. Ensure agreements are honored, if not, compensation for losses caused by the breach are paid. Provide some certainty & stability in making agreements. Forms of contract - deeds, written agreements, verbal agreements, writing and verbal, Intention to create a contract, offer & acceptance, consideration, genuine consent, Contractual formation/ offer & acceptance offer + acceptance = agreement. Offer was made to a party which was properly accepted. Offer - a written or verbal proposal by one party to enter into a legally binding contract with another with the intention that the proposal made would be legally binding when accepted. O ffer is created, you accept or reject. Invitations to treat (shop displays, catalogues, ads: willingness to deal or trade. b.
