A contract represents a written or spoken legally mandatory agreement between two or more parties which can be enforceable by law and usually is a form to show the promise to do something in exchange for a valued benefit. To form a contract we need to have an offer, an acceptance, deliberation and something really important for business law is the intention to create legal relations. The first essential characteristic of a contract is the offer. An offer is the intention to do business with another party and includes clearly stated terms which is making the offer to be valid. If the terms are not clear then the offer may be too vague, not being capable to be enforced, as for example in the situation of Guthing v Lynn (1831) the person that bought a horse made a promise to pay the seller another five quid, as he said, "if the horse is lucky for me". In this case you can't really understand what the promise meant. .
An invitation to treat is a tool to get debates going and show the terms which one party may be prepared to accept, as opposed to an offer in which one party is prepared to be legally bound by upon receiving. The second, important part of a contract is the acceptance. In this position the offeree, the person that is accepting the offer, agrees to take all the responsibility generated by the terms of the offer and not to introduce any other new terms after the acceptance is made. The acceptance it has to a "mirror image" of the offer, has to be fixed and must be explained really well to the offeror. The communication of the offer is effective only if it was made by a person that has the authority to do it. For example, the case Powell v Lee (1908) where the claimant has received a notice from a fellow of an appointment board, which confirm that he has been chosen for the job that he applied for but after that the member decided to provide the contract to somebody else.
