Contract Law

  • Lecture 1 – How is a contract formed?
  • Lecture 2 – What type of terms are in a contract? 
  • Lecture 3 – Which factors can invalidate a contract?
  • Lecture 4 – What are the ways a contract may be brought to an end and what remedies are available for breach of contract?

What is a Contract?

A contract is an agreement made between 2 or more parties intended to be legally binding (the law recognises the agreement and will enforce it)


  1. Boarding a train
  2. Parking your car
  3. Buying an iPhone or noodles
  4. Opening a bank account with OCBC

Elements that must go into formation of a contract

 There must be four elements which form a contract

  1. One Party makes an offer
  2. The other party accepts the offer
  3. Both parties provide consideration (eg. Buy something for something in return/ a textbook bought for $10)
  4. There is an intention to create legal relations

 Once an element is missing, the chain is broken and there is no contract.


An offer is an expression made by one party(offeror) to another (offeree) communicating the offeror’s willingness to contract on terms proposed by the offeror.

Example. I will sell you this book for $40.

Offers may be made:

  • In writing
  • Orally or
  • By conduct

 An offer must be communicated (must be directed to some) to the offeree.

  1. Decide whether eg.  Advertisement is an offer/invitation to treat. (Request for info/ Supply of further information)
  2. Acceptance leads to a contract (and unconditional)
  3. communication back (Exceptions of s)

An offer may be made to …

  • A particular/ Single Person
  • A Group of Persons, or
  • The whole world

See case of Carlill vs Carbolic Smoke Ball Co. where the advertisement was considered an offer.

Offer (Definite intention to make a contract) versus Supply of Information (Request to know the information)

 A mere supply of information in response to a question is not usually an offer. The court looks at actual words used to determine if there is an intention to be bound by the offer.


If I write in an email: I want to buy a laptop, what is your price. Reply: The price is $1000.

See Harvey vs Facey.

General Rule:

 All advertisements(In most cases) are invitations to treat. (Subject to terms and conditions)

If someone wants to get a legal binding – it is an offer.

Why must I know what is an offer?

Only an acceptance of an offer leads to the formation of a contract (provided that the other 4 elements are present), acceptance of anything else such as an invitation to treat does not lead to a contract. Therefore, knowing when something IS or IS NOT an Offer is very important.

Offer vs Invitation To Treat (does not lead to a contract) 

 An invitation to treat is:

  1. An Invitation to commence negotiations, or
  2. An invitation to the other party to make an offer

Acceptance of invitation to treat does not lead to a contract

Invitation to Treat – Examples

  • Price List (Menu)
  • Catalogues
  • Display of goods in shop
  • Auctions
  • Tenders
  • Advertisements