Formation of a Contract

In looking to consider whether a valid contract has been formed it is generally considered to be a good idea to look at the negotiations that have taken place between the parties. But this can be quite problematic where there there is a lengthy course of negotiations between the parties because it may be difficult to effectively determine when they have actually reached an agreement, supported by Kennedy v. Lee (1817) 3 Mer 441. Nevertheless, inspite of a prolonged period of continuing negotiations, the courts may be willing to find a concluded bargain; and, if so, a continuance of the negotiations thereafter will not necessarily terminate that agreement, illustrated by Davies v. Sweet [1962] 2 QB 300.

However, in making their decision in relation to any series of negotiations put before them, the courts will also look to consider the three fundamental aspects that are recognised as part of any contract – (a) offer; (b) consideration; and (c) acceptance – in order to make their decision about whether an agreement has been fromed leading to a binding contract.


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