Agreement in English law

The three main elements of contractual formation are whether there is (1) offer and acceptance (agreement) (2) consideration (3) an intention to be legally bound.

One of the most famous cases on forming a contract is Carlill v Carbolic Smoke Ball Company,[1] decided in nineteenth-century England.

A medical firm advertised that its new wonder drug, a smoke ball, would cure people's flu, and if it did not, buyers would receive £100.

[2] An objective perspective means that it is only necessary that somebody gives the impression of offering or accepting contractual terms in the eyes of a reasonable person, not that they actually did want to contract.

In Carlill v Carbolic Smoke Ball Co, the major difference was that a reward was included in the advertisement which is a general exception to the rule and is then treated as an offer.

Whether something is classified as an offer or an invitation to treat depends on the type of agreement being made, the nature of the sale, and the language used by the parties.

In Gibson v Manchester City Council, a letter from a local authority that said they "may be prepared to sell" a house to a tenant was not considered an offer of sale.

Retail agreements can also be considered invitations to treat if there is simply not enough information in the initial statement for it to constitute an offer.

[8] In Partridge v Crittenden[4][9] the defendant had placed an advertisement indicating that he had certain birds for sale, giving a price but no information about quantities.