Formation of contract: offer and acceptance, the rules on invitations to treat and the postal rule, consideration, and the intention to create legal relations.

What this dot point is asking

AQA wants you to explain the four requirements for a valid contract, distinguish offers from invitations to treat, apply the rules of acceptance including the postal rule, and explain consideration and intention to create legal relations. It is a core problem-question topic.

Offer and invitations to treat

Invitations to treat include goods on display in a shop window (Fisher v Bell) or on shelves (Pharmaceutical Society of GB v Boots), most advertisements (Partridge v Crittenden), and the request for tenders. A unilateral offer to the world can be a genuine offer, as in Carlill v Carbolic Smoke Ball Co where the deposited 1,000 pounds showed an intention to be bound.

Acceptance and the postal rule

Consideration and intention

Consideration is "some right, interest, profit or benefit to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other" (Currie v Misa). It must be sufficient but need not be adequate (Chappell v Nestle, the chocolate wrappers), must not be past (Re McArdle), and must move from the promisee. Performing an existing duty is generally not good consideration unless it confers a practical benefit (Williams v Roffey Bros).

An offer can be terminated before acceptance, which often decides a problem question. It ends by revocation (which must be communicated before acceptance, Routledge v Grant, and may be communicated by a reliable third party, Dickinson v Dodds), by rejection or a counter-offer (Hyde v Wrench), by lapse of time or a stated condition, or by death. A unilateral offer cannot be revoked once the offeree has begun performance (Errington v Errington and Woods).

Intention to create legal relations is presumed present in commercial agreements (Edwards v Skyways) and presumed absent in social and domestic agreements (Balfour v Balfour), though either presumption can be rebutted. A separated couple making a clear arrangement intends legal relations (Merritt v Merritt), and a family syndicate sharing competition winnings did too (Simpkins v Pays); conversely, an "honour clause" can rebut the commercial presumption (Rose and Frank Co v Crompton). The two presumptions and the existing-duty rule on consideration (the practical-benefit principle in Williams v Roffey Bros, and its limit where part payment of a debt is not good consideration, Foakes v Beer) are the points examiners most often test in application questions.

How formation is examined

Formation questions reward a methodical four-element check applied to the named parties, with the timing of offer, revocation and acceptance pinned down precisely. The postal rule and the existing-duty rule on consideration are the most heavily tested points, so a top answer states the rule, applies it to the facts, and reaches a clear conclusion on whether agreement was reached.