Contract Offer
A contract offer is a proposal made by one party to another, expressing a willingness to enter into a legally binding agreement. It must contain specific terms and be communicated to the offeree with the intention of creating a contract. Once the offer is accepted, a binding contract is formed, provided that all other necessary elements are present.
7 Key excerpts on "Contract Offer"
eBook - ePub- Kenny Chin(Author)
- 2014(Publication Date)
- Routledge-Cavendish(Publisher)
...The court will help the innocent party by either ordering damages suffered to be compensated, compelling the party in breach to perform the contract (specific performance order) or prohibiting the wrongdoer to act in a way which would cause further breaches (injunction order). It is therefore important to know how and when a binding agreement has been created. The following are six main essentials for a contract to be formed, they are: offer and acceptance; consideration; intention to create legal relationship; capacity; legality; consensus ad idem (meeting of minds). For a contract to exist, the first three essentials have to be present. Without any of them, no contract has been formed in the first place. It is quite different when any of the latter three essentials is absent. If a party who lacks legal capacity, for example, a minor, makes a contract, the law recognises the contract, but may also intervene by giving the minor the option to avoid the contract. Therefore, the contract is not void, but is said to be voidable. If a contract is made with an illegal objective, the court will not enforce the contract, in other words, there is a contract, but it is unenforceable. When a person enters into a contract caused by fraud, misrepresentation, a serious mistake, duress or undue influence, there is, in effect, no meeting of minds. In some cases, the contracts are void and in others they may be voidable. Offer Sir Guenter Treitel in his book, The Law of Contract, defines an offer as an expression of willingness to contract on certain terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed. There are further rules, mostly created by common law, relating to ‘offer’. These are: Offer must be communicated to the offeree An offer is an expression of willingness to contract and it must be expressed or communicated to a person, otherwise the person cannot accept something he is unaware of...
eBook - ePub- Chris Turner(Author)
- 2014(Publication Date)
- Routledge(Publisher)
...2 Formation of a contract: Offer and acceptance AIMS AND OBJECTIVES After reading this chapter you should be able to: Understand the essential requirements for valid formation of a contract Understand the basic character of an offer Distinguish between an offer and an invitation to treat Understand the need for communication Understand how offers can be withdrawn and in what circumstances Understand how an offer can be terminated Understand the basic character of acceptance Distinguish between a counter-offer and a mere enquiry Understand the significance of different methods of communication Understand the circumstances in which unilateral contracts are made Critically analyse the area Apply the law to factual situations and reach conclusions 2.1 Formation of contracts and the concept of agreement We know from our introduction to the law of contract that the law concerns ‘bargains’ that are made between parties. The major significance of the word ‘bargain’ is that it involves an agreement that is binding on both parties. In contract law, then, it is insufficient merely that an agreement exists between two parties but rather that it involves that specific type of agreement which is enforceable by both parties in a court of law. A contract is completed when both sides honour an agreement by carrying out their particular side of the bargain. It is a breach of contract when a party fails to do so. However, because of the special nature of contractual agreements, we cannot identify a breach of contract where we may feel that we have not got what we paid for or ‘bargained’ for, without first showing that the agreement was indeed a contract. So the first thing that may need to be determined in any contract case is that there is proof that a contract actually exists, as opposed to some less formal, and thus unenforceable, arrangement between the parties...
eBook - ePub- Max Young(Author)
- 2009(Publication Date)
- Routledge(Publisher)
...Chapter 2 Agreement and offer CONTENTS 2.1 Introduction 7 2.2 Definition of a contract 7 2.3 Agreement 8 2.4 Offer 9 2.5 Offer or invitation to treat? 10 2.6 Summary 17 2.1 Introduction Agreement, offer and acceptance together deal with the formation – the making – of contracts. Although it is obvious that it is important to see that a contract has been formed, it is easy just to examine the mechanics of contract formation – the offer and the acceptance – and then forget the whole basis of contract law, that is, the agreement. This chapter will examine the importance of the concept of agreement. In examining the concept of agreement the intention of the parties will be closely analysed. Finally, as part of the examination of the intention of the parties we will distinguish between an invitation to treat and an offer. 2.2 Definition of a contract A contract is an agreement (usually between two persons) giving rise to obligations on the part of both persons which are enforced or recognised by law. Warning ! Since, for the most part, the law of contract is a common law subject, do not take any definition you are given as the only definition. Treat the definitions as working definitions to help you analyse contract cases, etc. NB The ‘persons’ mentioned above are usually referred to as ‘parties’ to the contract. NB Generally speaking, an agreement is made when one person accepts an offer made by the other. NB We talk about the parties to a contract as the offeror and the offeree; the offeror makes an offer to the offeree. 2.3 Agreement Time and time again you will be brought back to the fact that the fundamental basis of contract law is the agreement of the contracting parties. The thing that distinguishes the law of contract from other branches of law is that it does not lay down a number of rights and duties which the law will enforce...
eBook - ePub- Jennifer Corrin-Care(Author)
- 2015(Publication Date)
- Routledge-Cavendish(Publisher)
...For example, if a person signs a written document containing contractual terms, that person will be taken to have agreed to those terms. 5 In the Pacific, the objective test should be applied against the background of local circumstances, rather than using standards applicable in England, where the test originated through the common law. There is some indication in regional case law on contract that courts may look at what is reasonable through the eyes of a South Pacific Islander. 6 However, case law in other fields of law has indicated that the courts do not always take this approach. 7 Given that, in most countries of the region, the common law is only part of the law if it is applicable to local circumstances, the proper approach to the objective test is to consider reasonableness from the standpoint of a local person. Unless a statute requires a contract to be in a particular form, either as a condition of existence or enforceability, the agreement need not be in writing. 8 If it is in writing, it need not be in a single document. For example, it may be contained in an exchange of letters 9 or faxes. This is discussed further in Chapter 9. THE OFFER Definition There are numerous definitions of an offer. In Cheshire, Fifoot and Furmston’s Law of Contract, it is referred to as: ‘... a definite promise to be bound provided that certain specified terms are accepted.’ 10 Anson’s Law of Contract gives a more detailed definition of an offer as: … an intimation, by words or conduct, of a willingness to enter into a legally binding contract,... which in its terms expressly or impliedly indicates that it is to become binding on the offeror as soon as it has been accepted by an act, forbearance, or return promise on the part of the person to whom it is addressed. 11 As stated in Anson, an offer may be implied rather than express. An express offer may be written, oral or partly written and partly oral...
eBook - ePub- Routledge-Cavendish(Author)
- 2009(Publication Date)
- Routledge-Cavendish(Publisher)
...4 Contract The formation of contracts The essential elements of a binding contractual agreement are as follows: • offer; • acceptance; • consideration; • capacity; • intention to create legal relations; • no vitiating factors. The first five of these elements must all be present and there must be an absence of any initiating factors. Offer An offer is a promise, which is capable of acceptance, to be bound on particular terms. An offer must be distinguished from the following: • a mere statement of intention (Kleinwort Benson v Malaysian Mining Corp (1989)); • a mere supply of information (Harvey v Facey (1893)); • an invitation to treat. This is an invitation to others to make offers. An invitation to treat cannot be accepted in such a way as to form a contract, nor can the person extending the invitation be bound to accept any offers made to them. Examples of invitations to treat are: – the display of goods in a shop window (Fisher v Bell (1961)); – the display of goods on the shelf of a self-service shop (Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953)); – a public advertisement (Partridge v Crittenden (1968)); – a share prospectus: contrary to common understanding, such a document is merely an invitation to treat, inviting people to make offers to subscribe for shares in a company; – auctions operate on the basis of the auctioneer inviting and accepting offers from the bidders. Offers to particular people An offer may be made to a particular person, to a group of people, or to the world at large...
eBook - ePubComparative Contract Law
An Introduction
- Ermanno Calzolaio(Author)
- 2022(Publication Date)
- Routledge(Publisher)
...4 The formation of contracts DOI: 10.4324/9781003251606-4 The general rule is that the formation of contract takes place through an offer accepted by the other party. The meeting of the two constitutes the agreement. Put in this way, the rule seems very simple. However, significant differences in the mechanism of formation of contract derive from the different conceptions of contract highlighted in the previous chapter. Very briefly, in the civil law tradition the scheme of offer and acceptance is seen as the way through which the parties express their will. Consequently, acceptance is the manifestation of the intention to agree to the offer, giving rise to the conclusion of contract. From the common law perspective, the idea that reliance of the other party is relevant in order to create a binding obligation leads to shaping a clear distinction between an invitation to treat and an offer. Moreover, as acceptance essentially coincides with the consideration for the enforceability of the promise, an ‘objective’ approach is adopted in order to ascertain an offer and an acceptance. 4.1 Offer and invitation to treat: a controversial distinction The offer/acceptance scheme is criticized for many reasons. The most relevant one is that it is purported to be generally applicable, whereas contracts are made in different ways: in writing, orally, after long negotiations or instantaneously, by conduct of the parties, etc. It is almost impossible to frame rules that can be applied across such a broad spectrum. We will consider a critical situation which is useful to show a relevant difference between the civil law and the common law approaches. Does the display of goods amount to an offer? The answer followed in most civil law countries is affirmative if the necessary elements to form a contract (essentially the price) are clear...
eBook - ePub- Gilbert Kodilinye, Maria Kodilinye(Authors)
- 2013(Publication Date)
- Routledge(Publisher)
...Chapter 2 Offer and Acceptance DOI: 10.4324/9780203488645-2 The first requirement of a binding contract is that the parties should have reached agreement (a ‘ consensus ad idem ’). Normally, an agreement is made when one party (the ‘offeror’) makes an offer to another (the ‘offeree’) which the offeree accepts. For example, if R says to E in the presence of witnesses: ‘Will you buy my Suzuki car reg no XF 2244 for $10,000?’, and E replies, ‘Yes, I will’, a contract comes into being. In such a simple example, there is no difficulty in identifying the offer and the acceptance, but where the alleged agreement is preceded by protracted negotiations conducted in lengthy correspondence, it may be difficult to discover a precise offer and acceptance. In such a case, it would be necessary for the court to scrutinise the correspondence carefully in order to decide whether or not there was a concluded agreement. 1 1 Perry v Suffields Ltd [1916] 2 Ch 187; A Mahabir and Sons Ltd v Caroni (1975) Ltd (2002) High Court, Trinidad and Tobago, No S781 of 1997, unreported, per Tam J [Carilaw TT 2002 HC 35]. Speedy Service Liquors Ltd v Airports Authority of Trinidad and Tobago (2002) High Court, Trinidad and Tobago, Nos 586 and 936 of 1984, unreported [Carilaw TT 2002 HC 105] is an example of offer and acceptance arising from an exchange of letters between the parties. The Offer An offer has been described as ‘an expression of willingness to contract on certain terms made with the intention (actual or apparent) that it shall become binding as soon as it is accepted by the person to whom it is addressed’. 2 2 Treitel, Law of Contract, 12th edn (London: Sweet and Maxwell, 2007), para 2-002. An offer may be made to a particular individual or corporation, or to the world at large...
