What can a chocolate bar teach us about contract law?
Did you know that whenever you buy a chocolate bar you are entering into a contract? You probably haven’t given it much thought, but this everyday scenario can teach us quite a lot about contract law in England and Wales. These principles apply whether you are buying a mid-morning snack or are entering into a multi-million pound commercial agreement.
A contract does not need to be in writing (or signed)
Each time you buy some of your favourite confectionary you do not enter into a written agreement, but this does not make the contract you enter into any less binding.
Terms can be expressed or implied
Take a second to think about the words that will be exchanged each time you buy something. It may be impolite, but it would be possible to buy the chocolate without any words being exchanged.
Also, it is likely that the chocolate you are buying is covered in protective wrapping and the contents are not visible prior to purchase. This means that when making the purchase you are assuming that the contents will be as described, be fit for consumption and that the contents will be delicious.
When is a contract formed?
For a contract to be formed an offer must be made, which upon acceptance forms a binding agreement. In these circumstances it is worth thinking about when you are legally bound to buy the chocolate bar.
Is the shop making you an offer by placing the bar on the shelf? This is what most people would think, but if this was the case then you would be obliged to buy the chocolate when you pick it up. The correct interpretation is that you are making an offer to the shopkeeper to buy the goods when you take them to the till. The shopkeeper may then decide whether to accept your offer or refuse your custom.
Does the shop have to sell the chocolate to you?
Until a contract is formed there is no obligation for the shop to sell the chocolate to you. It is a common misconception that a shop has to sell you the goods at the advertised price. If an error has been made when the chocolate was priced then the shop can correct this error at the time of purchase. You then have to decide whether to buy the goods at the correct price, or refuse the transaction.
What if I get a receipt?
A receipt is a proof of purchase. As this is received after the transaction has completed (when the shopkeeper agrees to take your money) it cannot impose terms into the contract. Similarly, an invoice is a demand for payment for an agreed transaction. Attaching terms of business to the back of an invoice is not sufficient to show that they have been incorporated into the contract.