When is a contract "entered into"? s28 CRA

Okell

Following on from the thread about what is meant by the words when "the contract is concluded" in respect of a distance sale, what does the phrase "the day the contract is entered into" mean in s28 of the CRA in respect of the delivery of goods?

In the case of an online sale where the trader's T&Cs typically state that a contract is only "formed" when the goods are dispatched. Is this the date when when the contract is "entered into" for the purposes of s28, or is the contract entered into when the consumer places an order, or when the trader confirms the order, or at some other point in time?

Under s28 goods should be delivered no later than 30 days after the day the contract was entered into.  What day is that?

(There's a current thread sort of touching on this question here: Bike order from local bike shop — MoneySavingExpert Forum )

DullGreyGuy

A contract is formed/bound/entered into etc by default when, in England & Wales, you have the three constituent parts (offer, acceptance and consideration - the later of which can be a promise to do (or not to do) something). However it's possible for the terms of the agreement to specify some other date, for example many mail order companies will say the contract isn't formed until the goods are dispatched, this then allows them to painlessly reject sales when an items been loaded at the wrong price or if they find they're out of stock. 

Were it not for such a clause then the website is an offer to contract a sale and the buyer clicking the "buy" button and entering their payment details is the acceptance and consideration (the sellers consideration is a promise to send the goods)

ArbitraryRandom

My understanding is that the contract is formed (entered into) when the offer has been accepted (i.e. the parties have agreed the terms). It's then 'concluded' when those terms have been met to the satisfaction of both parties. 

i.e. if I said to you I want your lunch. You say I'll sell it to you for £2.50. I say okay - that's the contract entered into - it's then concluded when I give you £2.50 and you give me your lunch (can you tell I'm hungry... ) 

For online sales, I've seen it argued dispatch is used because until that point there's a good chance no human has seen the order on the seller's side to accept it (contract formation is an active process requiring the participation of both parties). Dispatch is the first tangible and observable act that demonstrates the seller's acceptance. 

user1977

ArbitraryRandom said:

My understanding is that the contract is formed (entered into) when the offer has been accepted (i.e. the parties have agreed the terms). It's then 'concluded' when those terms have been met to the satisfaction of both parties. 

No, I would say "concluded" and "entered into" are the same thing. You conclude a contract to e.g. buy a house when contracts are exchanged. Completion (when money and keys are handed over) is a later and separate thing.

DullGreyGuy

user1977 said:

ArbitraryRandom said:

My understanding is that the contract is formed (entered into) when the offer has been accepted (i.e. the parties have agreed the terms). It's then 'concluded' when those terms have been met to the satisfaction of both parties. 

No, I would say "concluded" and "entered into" are the same thing. You conclude a contract to e.g. buy a house when contracts are exchanged. Completion (when money and keys are handed over) is a later and separate thing.

But thats explicitly because the agreements set the future date for the completion... were they mute on the matter it'd happen at the exchange. 

Houses are a bad example though because there is much more legislation around contracts on land etc. It is however why in Scotland you have to make your offer conditional on satisfactory survey etc whereas technically in England many offers are made unconditionally yet don't bind a contract when it's accepted. 

user1977

DullGreyGuy said:

user1977 said:

ArbitraryRandom said:

My understanding is that the contract is formed (entered into) when the offer has been accepted (i.e. the parties have agreed the terms). It's then 'concluded' when those terms have been met to the satisfaction of both parties. 

No, I would say "concluded" and "entered into" are the same thing. You conclude a contract to e.g. buy a house when contracts are exchanged. Completion (when money and keys are handed over) is a later and separate thing.

in England many offers are made unconditionally yet don't bind a contract when it's accepted. 

I don't see why an offer in England couldn't bind you (if you were careless enough)? There's nothing fundamentally different between English and Scottish contract law on that front.

DullGreyGuy

user1977 said:

DullGreyGuy said:

user1977 said:

ArbitraryRandom said:

My understanding is that the contract is formed (entered into) when the offer has been accepted (i.e. the parties have agreed the terms). It's then 'concluded' when those terms have been met to the satisfaction of both parties. 

No, I would say "concluded" and "entered into" are the same thing. You conclude a contract to e.g. buy a house when contracts are exchanged. Completion (when money and keys are handed over) is a later and separate thing.

in England many offers are made unconditionally yet don't bind a contract when it's accepted. 

I don't see why an offer in England couldn't bind you (if you were careless enough)? There's nothing fundamentally different between English and Scottish contract law on that front.

But it doesn't bind you does it until exchange occurs hence we have gazumping and gazundering which more or less cannot occur in Scotland because things are binding. 

See https://www.gov.uk/buy-sell-your-home/offers. which also calls out that its different in Scotland.

ArbitraryRandom

user1977 said:

ArbitraryRandom said:

My understanding is that the contract is formed (entered into) when the offer has been accepted (i.e. the parties have agreed the terms). It's then 'concluded' when those terms have been met to the satisfaction of both parties. 

No, I would say "concluded" and "entered into" are the same thing. You conclude a contract to e.g. buy a house when contracts are exchanged. Completion (when money and keys are handed over) is a later and separate thing.

Using common language, 'enter into' is to begin something and 'conclude' is to bring it to an end... but I'm quite happy to be corrected. I tend to use the word 'complete' to avoid any ambiguity. 

the_lunatic_is_in_my_head

Okell said:

Following on from the thread about what is meant by the words when "the contract is concluded" in respect of a distance sale, what does the phrase "the day the contract is entered into" mean in s28 of the CRA in respect of the delivery of goods?

Guidance notes use the phrase "the contract is made", helpful... 

I would assume both instances mean the exact point at which when you have a legally binding contract, before that point both can withdraw their offer as there's no contract anyway, after that, what other point is there in a contract when the words concluded, entered into or made could mean something else?

user1977

DullGreyGuy said:

user1977 said:

DullGreyGuy said:

user1977 said:

ArbitraryRandom said:

My understanding is that the contract is formed (entered into) when the offer has been accepted (i.e. the parties have agreed the terms). It's then 'concluded' when those terms have been met to the satisfaction of both parties. 

No, I would say "concluded" and "entered into" are the same thing. You conclude a contract to e.g. buy a house when contracts are exchanged. Completion (when money and keys are handed over) is a later and separate thing.

in England many offers are made unconditionally yet don't bind a contract when it's accepted. 

I don't see why an offer in England couldn't bind you (if you were careless enough)? There's nothing fundamentally different between English and Scottish contract law on that front.

But it doesn't bind you does it until exchange occurs hence we have gazumping and gazundering which more or less cannot occur in Scotland because things are binding. 

See https://www.gov.uk/buy-sell-your-home/offers. which also calls out that its different in Scotland.

Offer and acceptance will form a contract, it's only "exchange" in normal practice because the solicitors are swapping counterparts of the contract - but there's no legal reason why it has to be done that way.

I appreciate that people use "offer" to mean non-contractual vague verbal conditional things (which happens in Scottish parlance too - people have their offer "accepted" long before it's actually binding in any way), but if I put a written offer to you to buy your English property, and you accept it in writing, why wouldn't it be binding?

It's mostly solicitors' professional practice rules which deter gazundering/gazumping (and perhaps generally the fact that transactions move more quickly than in England), nothing special about contract law.

MacPingu1986

user1977 said:

DullGreyGuy said:

user1977 said:

ArbitraryRandom said:

My understanding is that the contract is formed (entered into) when the offer has been accepted (i.e. the parties have agreed the terms). It's then 'concluded' when those terms have been met to the satisfaction of both parties. 

No, I would say "concluded" and "entered into" are the same thing. You conclude a contract to e.g. buy a house when contracts are exchanged. Completion (when money and keys are handed over) is a later and separate thing.

in England many offers are made unconditionally yet don't bind a contract when it's accepted. 

I don't see why an offer in England couldn't bind you (if you were careless enough)? There's nothing fundamentally different between English and Scottish contract law on that front.

Not generally - it's the real property specific requirements in E&W that mean contracts for the sale of land have to be in writing (+ other requirements) that create the formal "exchange" that creates the acceptance - prior to which offers can be withdrawn