Case and sample answer:

Al operates a small business manufacturing specialist engine filters. In January he placed an advertisement in a car trade magazine stating that he would supply filters at £60 per filter, but would consider a reduction in the price for substantial orders. He received a letter from Bash Cars plc requesting his terms of supply for 1,000 filters. Al replied, offering to supply the filters at a cost of £50 each. Bash Cars plc responded to Al’s letter stating that they accepted his offer but that they would only pay £45 per filter. Al wrote back to Bash Cars plc stating that he would supply the filters but only at the original price of £50. When Al’s letter arrived, the purchasing director of Bash Cars plc did not notice the alteration of the price and ordered the 1,000 filters from Al, which he supplied.

Required:
Analyse the situation from the perspective of contract law and in particular advise Al what price he is entitled to claim from Bash Cars plc.

Sample Answer:
Legal issues: invitation to treat, offers, counter offers and breach of contract (must be identidied)

An offer is a promise to be bound on particular terms, and it must be capable of acceptance. The person who makes the offer is the offeror; the person who receives the offer is the offeree. The offer sets out the terms upon which the offeror is willing to enter into contractual relations with the offeree. An offer may, through acceptance by the offeree, result in a legally enforceable contract. However, it is important to distinguish what the law will treat as an offer from other statements which will not form the basis of an enforceable contract. The original advertisement in the magazine was not an offer; it was merely an invitation to treat. As such it is not an offer to sell but merely an invitation to others to make offers. The point of this is that the person