Formation of a Legally Binding Business Contract Essay - 3

Formation of a Legally Binding Business Contract - Essay Example It is important to consider what constitutes a valid offer. There are various statements which seem like offers but actually not offer. A distinction must be among offer, invitation to offer, an invitation to treat. Jess advertised a second-hand van for sale on a car trade website for  £2650. This is not an offer but a mere invitation to offer. This means that if anyone shows interest in the van, Jess reserves the right of refusing to sell it. As seen in the given case, Mr. Powell showed interest in the van but Jess told him that she would sell it if any other customer came before him. The interest shown by Mr. Powell was the actual offer but it was not accepted by Jess. Jess agreed to sell the van to him but she qualified her acceptance by saying that she would sell the van to any customer that came before him. A qualified acceptance is not a valid acceptance which is why they did not have any agreement yet. Mr. Powell told Jess that he would pay  £450 in advance if she did not sell the van to any customer for three days. Normally, when general offers are made, the offeror is not bound to keep the offer open for any particular offeree. However, when an offeree agrees to pay a consideration for keeping the offer open for a certain period, the offeror becomes bound to keep it open for the stipulated period as seen in Dickinson v Dodds. Mr. Powell has obtained a promise with the consideration of  £450 from Jess that she would keep the offer to sell the van to Mr. Powell open for three days. Now Jess and Mr. Powell have an agreement that is separate from that of selling of the van. Another important fact is that Jess’ invitation to offer turned into an offer during this negotiation. It is because anyone could have made an offer to Jess before she promised to keep her offer open.