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OFFER AND ACCEPTANCE

Updated: Aug 24, 2023



This post looks at offer and acceptance in contract law. This is one of the first topics the contract law student will encounter. It is the basics of contract law and if you get a got understanding of offer and acceptance in contract law, everything will fall into place. Below is a sample chapter from our Contract Law book.


OFFER AND ACCEPTANCE IN CONTRACT LAW


OFFER AND ACCEPTANCE

What is an Offer?


A commitment or pledge made by the offeror to be contractually bound in the event that an unconditional acceptance is made is what we mean when we talk about an offer. The terms of the offer transform into the terms of the contract that is established as a result of the acceptance of the offer. Because of this, the offer has to be reliable and conclusive. Any statement that does not fulfil this prerequisite is not an offer; in this scenario, a supposedly accepted offer will not result in the formation of a legal binding contract.


What is an Acceptance?


In the case of Hyde v. Wrench (1840), 3 Beav 334, the court ruled that acceptance must be unqualified and must coincide completely with the conditions of the offer. This principle is often referred to as "the mirror image rule." Not every transaction can be broken down into its component parts of "offer" and "acceptance" in a straightforward manner. However, the court will always examine the communication between the parties to determine whether, at any given time, one party may be deemed to have assented to all of the terms, both express and implied, of a firm offer made by the other party. This will be done in order to determine whether or not the court should rule in favour of one party or the other. An assent that is qualified in any manner in any way in any way in any way in any way does not have the same impact as an acceptance.


Implied Terms


Implied terms are crucial elements in contract law that are not expressly stated but are understood to be inherent in a contract. In the case of Carlill v Carbolic Smoke Ball, an instance highlighting the role of implied terms, the Carbolic Smoke Ball Company made an offer through an advertisement, stating that a reward would be given to anyone who used their product and still contracted influenza. Mrs. Carlill accepted the offer by purchasing and using the smoke ball. Though not explicitly mentioned in the advertisement, it was implied that if the conditions were met, there would be a binding agreement. This important landmark case demonstrates how English law recognizes that certain terms can be implied without explicit expression, and that the formation of a contract is based on the parties' intention to be bound, rather than solely on traditional notions such as the original offer and counter offers. It is worth noting that invitations to treat, which are expressions of willingness to negotiate, do not necessarily equate to binding agreements, as they are merely preliminary inquiries. Overall, implied terms play a crucial role in contract law, ensuring that parties are cognizant of their obligations and rights, even when not explicitly stated.

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