In common law, a contract can be defined as a legally binding agreement between two parties. There are few very important conditions that should be fulfilled before a contract becomes valid. According to Friedman (2011), Parties to a contract have to make a contract that is legally binding in nature. The key parts of a contract are offer, acceptance and consideration.
Prior to creation of a contract, a consumer has to make an offer and if the trader accepts it for a certain price, than the parties have a contract.
The contract between parties to a contract can only be materialized if an offer is accepted.
Consideration means that both parties must do something or promise to do something which they intend to be legally binding
Application to the scenario
Ross and Francis
The case of Ross and Francis is an invitation to treat because there was no consideration and acceptance from Francis. Francis is not supposed to sell the goods just because there is an advertisement on display. It does mean that Ross was invited to make an offer but there is no legally binding agreement between Ross and Francis.
Harriet and Francis
In the case of Harriet and Francis, there is a legally binding agreement. It is because Harriet has signed the letter and promised to pay the $300,000 for Townhouse. Though payment may not have to be made when the offer was accepted but Harriet is bound to pay later on. The contract between Harriet and Francis was signed on 7 September 2014.