Law of Contract: Legal Issues

Contracts are part of our everyday undertakings. When two or more people enter into an agreement, they simply enter into a contract and are enforceable by laws of a country. In the given scenario, law of the contract is applicable. Rules of communication and acceptance opine that there must be an offer followed by an acceptance then formation of a contract (Zhang, 2006). The given case puts across that Kitty is the owner of a respectable antique shop on Cat Street. She offers to sell a “rare antique Chinese vase,” by advertising it in the Oriental Times, which is a local newspaper (Fisher & Greenwood, 2007). As the scenario unveils, two interested buyers accept to purchase the item at a considerable amount of money. However, due to issues associated with communication, both buyers end up meeting on the same day with a similar aim of buying the same item. This paper will seek to discuss the scenario and provide the appropriate advice with reference to the law of contract.

Elements of law of contract

A contract can only be legally enforceable if it is real. Additionally, for the law of contract to apply, there are certain elements that a contract must bear. A contract must have an offer showing that there is an expression of willingness of contracting to specific conditions set in place by whoever is offering (Stone, 2011). There is also the element of acceptance, which maintains that there is an absolute acceptance of all conditions provided in the offer (Hogg, 2011). Critical analysis of contract law highlights that distinguishing an invitation to treat from an offer is of great importance. This is mainly because; an invitation to treat is simply inviting others to submit their offers (Zhang, 2006). When Kitty places the advertisement in Oriental Times, she simply calls viewers to treat. Partridge v Crittenden (bi-lateral contract) is the best case to quote with reference to this scenario because it asserts that newspaper advertisements are invitational treats hence established legal precedent in a Chinese court.

Fact-findings depict that there are other law statutes whose law of contract contains void agreement as contract law elements (Stone, 2011). Obviously, an agreement made must not be void. Conversely, a number of statutory instruments provide presence of void agreements (Furmston, Cheshire, & Fifoot, 2006). They comprise of the following factors; agreement restraining trade, agreement to restrain marriage, agreement with uncertain meanings, and wagering agreements among others. The scenario surrounding Kitty, Annie, and Bertie is legal as the agreement is not void since it involves trade (Brunner, 2004). The contractual obligations of Kitty assert that she cannot seek to fulfil both agreements since she had already dealt with the first one lawfully (Collins, 2003). Kitty left a telephone message on Annie’s mobile phone on Thursday morning informing her that she could no longer sell the vase to her since it was no longer available. With regard to Entores Ltd versus Miles Far East Corporation (1955), a telephone conversation is legally binding.

Consideration is yet another element of contract law. In consideration, a promissory promises to give the promised person something of a certain value in exchange for the promised item (Brunner, 2004). Under this spectrum, the obtained item assumes the name consideration whereby a consideration becomes enforceable by law only if the parties involved have something to give and another to receive. In the case presented by Kitty, Annie, and Bertie, the contract is legally binding (Collins, 2003). However, asserting that a contract is legally binding when communication of acceptance takes place and expression of willingness to bind exists. In this case, over hearing people talk cannot be considerable as a form of instantaneous communication such as telephone and telex.

Concepts of offer, counter offer, and acceptance

Based on this scenario, Kitty’s contractual obligations opine that she has the freedom to contract with whomever she feels or sees substantial and sufficient to contract. Besides, according to the newspaper advert, Kitty offers to sell her product at HK $250,000. On the other side, Annie accepts to buy it but only at HK $200,000. Concepts of an offer, a counter offer, and an acceptance maintain that, a contract comes into being when and only there is the willingness to agree on terms communicated on the contract without further negotiations (Hogg, 2011). With support from these concepts, Kitty has a contractual obligation not to enter into a contract with Annie because Annie counter offers Kitty’s original price by negotiating (Fisher & Greenwood, 2007). In relation to the scenario revolving around Kitty and her clients, she has an obligation to choose whom to enter into a contract, either Bertie or Annie.

A contract of law is legally binding if it involves the elements of formalities such as a written document (Brunner, 2004). It is yet vital to be aware of the fact that, unspoken or unwritten promise can also be legally enforceable. This shows that oral contracts are also legally enforceable in case there is any incidence of misunderstanding (Collins, 2003). The law of contract defines an offer and acceptance as a determinant showing whether there is an agreement existing between two or more parties. The case structured by Carlill versus Carbolic Smoke ball Company shows that a counter offer occurs when offeree declines the offer of the offeror. Analyses declare that, when whoever is offering rejects an offer, he or she destroys it. As such, the law of contract assures that it cannot be acceptable even at a future time (Stone, 2011). With this vein, Kitty’s contractual obligations allow her to sell the vase only to Bertie.

Status of the statement

Kitty advertises her rare antique Chinese vase in the Oriental Times. Status of this statement shows that this is an offer. This is because; an offer is a statement, which only becomes binding when the person(s) addressed to accept the terms and conditions expressed in the statement (Collins, 2003). With reference to Kitty, Annie, and Bertie, there is an offer, acceptance, and a counter offer. Kitty offers to sell the rare antique Chinese to Bertie when she meets him at the Chinese auction (Fisher & Greenwood, 2007). However, it is imperative to note that Annie sets in a counter. Since an offer is the statement showing the terms of a contract, it binds whoever accepts it. Therefore, the status of this statement provided in the advert describes an offer with both Annie and Bertie expressing willingness to be bound by the terms stated (Brunner, 2004).

“Collateral offers”

According to Dickinson versus Dodds (1876) 2 ChD463, an open offer becomes null and void the moment the offeree learns about an offeror’s acceptance of a third party’s offer. Holding and rule found there was no meeting of minds during the time of acceptance hence the court established no bind since there was no contract formed between Dickinson and Dodds (Hogg, 2011). With the scenario presented, it is very open that there is no contract formed between Annie and Kitty (Zhang, 2006). Thus, Kitty has a contractual obligation to sell the rare antique Chinese to Bertie following the fact that Annie decided to accept Kitty’s original offer when she found out that Kitty offered to sell it to Bertie. Nonetheless, it is worth noting that, Annie learnt about Kitty’s plan to sell the vase to Bertie by over hearing Kitty and Bertie talking (Stone, 2011). Thus, questioning the validity of Annie’s mode of knowledge about the sale is also important.

Contract of law also has another factor commonly referred to as the capacity of parties. In this case, the parties wishing to enter into an agreement must agree to or be capable of agreeing to enter into lawful terms (Stone, 2011). Bear in mind that, even though parties involved are capable of making an agreement, the promise or agreement is enforceable by law if only the parties agree to make it legal binding by making a covenant or a written agreement. Under this spectrum, capacity is of paramount importance because of such factor like idiocy, drunkenness, and lunacy as well as minority among others (Hogg, 2011). Probably, if any of the agreed parties happens to suffer from any of these disabilities, the contract is not enforceable by law unlike in some other instances strictly stated in some statutes (Zhang, 2006).

With regard to the given scenario, it will be appropriate for Kitty to sell the vase to Bertie since he agreed to be bound by rules of contracting. Based on the vantage point of view, Kitty stands trial if she fails to grant Bertie his consideration. Additionally, based on their capacity to partner, neither of the parties suffered any of the factors that lead to nullification of a law contract (Fisher & Greenwood, 2007). As such, everything surrounding the scenario is sound minded carried out. Bertie stands viable to take maters to a court of law if Kitty defaults to honour her initial capability of entering into an agreement (Brunner, 2004). Hence, this paper finds it appropriate for Bertie to sue Kitty if she happens to sell the Chinese vase to Annie. This is because, Bertie and Kitty expressed their capability to enter into an agreement, and Bertie went an extra mile to offer more money than her original offer (Collins, 2003).

Arguing with reference to Chwee Kin Keong versus [2004] (2) ALR 594, the rule of contract law grants Annie ability to sue Kitty if Kitty fails to give her the Chinese vase. Kindly, Annie posted a formal acceptance letter to Kitty on Wednesday 11pm stating that she agrees to pay the HK $ 250, 000 that Kitty had asked her (Stone, 2011). When Annie saw the antique Chinese vase advertised by Kitty, she negotiated and offered to buy it at HK $200,000. Nevertheless, Kitty declined the offer by explaining to Annie that the vase was exceptional and could not accept anything below the original price (Hogg, 2011). On that note, Kitty went ahead to put across that, nobody else would buy the vase before Friday, and Annie responded by telling Kitty that she would give her response later within the week. Contractually, the rules of acceptance bind Kitty to leave the offer open until Friday just as promised.

When Kitty offers to sell the vase to Bertie, she revokes her initial offer to Annie. The rules of revocation authorize Annie to sue Kitty when the contract turns out to be legal (Brunner, 2004). According to the element of consideration and capacity to parties, the law of contract states that, an agreement is enforceable by law if one party defaults to give the considered or offered item without a “valid consideration” (Hogg, 2011). On the other end, it is advisable for Annie to ensure whether the vase discussed by Bertie and Kitty is the same discussed between her and Kitty. Thus, it would be appropriate for Annie to sue Kitty if she indeed has a contract with her and if Kitty revokes it by accepting offers from other people.


In conclusion, the law of contract maintains that, the object set in place for sale must be legal. This means that it should not be immortal or opposed by the laws of the country. Fisher and Greenwood (2007) agrees that, sale of antique Chinese vase is legal in China (Fisher & Greenwood, 2007). In addition, a contract must have the element of performance possibility. The facts derived from the cases applied in this scenario portray presence of a fully-fledged contract between Kitty and Birtie. The scenario highlights the complexity of a contract and the regard accorded to cases by both English and Chinese courts (Stone, 2011). Further, possession, acquisition, and sale of antique Chinese vase in China are legal (Collins, 2003). All these elements opine that the case is enforceable by law in case of any misunderstandings. The most appropriate thing to do in this scenario is either to create a dialogue between and among the three parties involved and come up with a solution that does not compromise the will power of contract law (Klass, 2010).


Brunner, P. (2004). Briefcase on Contract Law. London: Routledge.

Collins, H. (2003). The Law of Contract. Cambridge: Cambridge University Press.

Fisher, M. & Greenwood, D. (2007). Contract Law in Hong Kong. Hong Kong: Hong Kong University Press.

Furmston, M., Cheshire, G. & Fifoot, C. (2006). Cheshire, Fifoot And Furmston’s Law of Contract. Oxford: Oxford University Press.

Hogg, M. (2011). Promises and Contract Law: Comparative Perspectives. Cambridge: Cambridge University Press.

Klass, G. (2010). Contract Law in the USA. Vatican: Kluwer Law International.

Stone, R. (2011). The Modern Law of Contract. New York: Taylor & Francis.

Zhang, M. (2006). Chinese Contract Law: Theory and Practice. Leiden: BRILL.

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