A contract is a legally binding agreement between two or more parties, where each side promises to do something in exchange for a benefit. Once formed, it can be enforced by law. It can be verbal, written or implied by conduct.

An invitation to treat is not an offer, but an invitation for others to make an offer. It shows a willingness to enter negotiations, but cannot be accepted to form a contract. Examples include:

• Goods displayed in a shop window or on a shelf
• Advertisements in newspapers or online
• Restaurant menus or catalogues The seller is not legally bound to sell at the displayed price. A contract is only formed when the customer makes an offer and the seller accepts it.

• Breach of a condition: The injured party may terminate the contract and claim damages.
• Breach of a warranty: The injured party may only claim damages—the contract remains in force.

Case Study: The Coffee Cart Contract

Emma, a recent graduate, had long dreamed of setting up her own mobile coffee business. One evening, while scrolling through an online business forum, she saw a post from a user named Jake:

"Coffee cart for sale – includes espresso machine, grinder, and stock. €6,000. Contact for details."

At this stage, no contract could be formed. The ad was not a legal offer but an invitation to treat—an invitation for others to make offers or begin negotiations. Jake had not committed to selling to anyone at that price; he was simply inviting interest.

Emma messaged Jake to express her interest, and they arranged to meet in person. When they met, Jake said:

"I'm willing to sell you the cart, the coffee machine, the grinder, and one month's supply of cups and beans for €6,000."

This was a clear and definite offer, made directly to Emma. It included specific terms and showed Jake's intention to enter a binding agreement.

Emma replied without hesitation: "Yes, I'll take it at that price." Her reply matched the offer exactly, with no changes or conditions. This was valid acceptance. Later that evening, they drew up and signed a short written contract listing the agreed items and confirming the price and handover date.

The next morning, Emma transferred €6,000 into Jake's bank account. In return, Jake handed over the cart and equipment. Because both parties had provided something of value, there was valid consideration—Emma's money in exchange for Jake's goods.

This was clearly a business arrangement, not a casual or domestic promise. Both parties intended the contract to be legally binding, which the law presumes in commercial dealings.

Emma was 22 years old, sober, and mentally competent. Jake was a self-employed entrepreneur. Both parties had the legal capacity to contract—they were over 18, not under the influence, and fully able to understand the terms.

There was no sign of pressure or dishonesty. Emma had the chance to inspect the cart and ask questions. Jake gave accurate information about the equipment and answered her concerns. This meant both parties gave genuine consent, free from duress, undue influence, or misrepresentation.

Although the law did not require a written contract in this situation, they signed one anyway. This ensured legality of form, particularly helpful for clarity and future reference.

The contract involved the sale of legal goods for a lawful business, so it also satisfied legality of purpose. There was no illegal content or criminal activity involved in the transaction.

Emma began trading the following week. At first, business was steady—but she soon ran into a serious problem. The espresso machine, the most valuable item in the bundle, wouldn't power on. A technician diagnosed a burnt-out circuit board and estimated a €2,000 repair cost.

Emma checked the contract, which stated that all major equipment was "in good working order." She had asked Jake about this at the meeting, and he had assured her that everything worked perfectly. The condition of the espresso machine was central to the agreement—a condition, not a minor term. Because this promise was not fulfilled, Emma was entitled to terminate the contract or seek compensation.

At the same time, she noticed that a large box of branded cups and napkins was missing from the supplies. This was frustrating, but it didn't stop her running the business. These items were mentioned in the contract, but were not essential to performance. They would be considered warranties—non-fundamental terms. Emma couldn't cancel the contract over them but could reasonably request damages or a partial refund.