Offer and Acceptance LLB Law

The content, not the cases

Definition of an offer

An expression, by words or conduct, of a willingness to be bound be specified terms upon acceptance by the person to whom the offer is made - Chitty on Contracts (32nd ed. 2015)

Types of invitations to treat

• Advertisements - no legal status as an offer; are incapable of being ‘accepted’

• Displays in a shop - would be commercially unworkable if it were classified as an offer

Types of Responses to an offer

1. Rejection - Kills the offer

2. Counter offer - Kills the original offer

3. Acceptance

Communication of Acceptance

• Offeror might stipulate method of communication they want offeree to use in order to accept, any communication different from what they direct will not count as valid acceptance

• If no method is stipulated, offeree can communicate acceptance by any reasonable method (e.g. not by carrier pigeon)

• Instantaneous communication - acceptance upon reception by offeror (is only valid if offeree reasonably believes the offeror to have received it) (Acceptance still occurs if it’s the offeror’s fault that they have not received the message, e.g. leaving office early without checking emails)

• Non-instantaneous communication - postal rule - acceptance at point of posting letter - offeror can word offer (e.g. ‘acceptance must be by notice in writing’) to exclude this rule

• Cannot accept by silence, only exception is when offeree wishes it

• Acceptance by conduct

Revocation

An offer can be revoked at any time before acceptance so long as it is communicated to the offeree - can be done by a 3rd party.

Revocation cannot occur if the offeree has contributed consideration towards it

Types of Contracts

1. Unilateral - one-way obligation, only 1 party is obligated to do something, the other has a choice

2. Bilateral - 2 way obligation, both parties do something in exchange for what the other is doing

Consensus ad idem

• A meeting of the minds

• both parties must agree to the same thing

• The objective test is used in cases to determine whether the parties, from an outsider’s perspective, appear to have consensus ad idem