Offer and acceptance

Offer

A clear and definite promise to be bound on specific terms once accepted.

Certainty of offer

The offer must be clear and certain; vague statements are not offers.

Intention to be legally bound

The offeror must show an intention to create legal relations.

Unilateral contract

A contract accepted by performing the required act; only the offeror is bound.

Bilateral contract

A contract where both parties exchange promises and assume obligations.

Invitation to treat

A preliminary statement inviting others to make offers; not legally binding.

Advertisement (general rule)

Advertisements are usually invitations to treat, not offers.

Advertisement as unilateral offer

An advertisement offering a reward on performance can be a binding unilateral offer.

Display of goods

Goods displayed in shops or online are invitations to treat, even if price-marked.

Invitation to tender

Normally an invitation to treat, allowing the inviter to accept or reject tenders.

Tender with undertaking

A tender stating the highest or lowest bid will be accepted creates a unilateral contract.

Auction (general rule)

The auctioneer’s request for bids is an invitation to treat; bids are offers.

Acceptance at auction

Acceptance occurs when the hammer falls.

Auction without reserve

The seller promises to sell to the highest bona fide bidder.

Auction without reserve (bilateral contract)

Formed when the hammer falls, determining entitlement to the goods.

Auction without reserve (unilateral contract)

The auctioneer’s promise to sell to the highest bidder; withdrawing goods breaches this contract.

Termination of offer

An offer may end by rejection, lapse, death, or revocation.

Rejection

An offer is terminated once rejection is communicated to the offeror.

Counter-offer

A counter-offer rejects and replaces the original offer.

Request for information

A request for clarification that does not reject the original offer.

Battle of the forms

The party who last sends their terms, accepted by conduct, usually prevails.

Lapse of offer

An offer expires after a stated time or, if none, a reasonable time.

Death of offeror

An offer lapses if the offeree knows of the offeror’s death.

Death of offeree

An offer automatically lapses and cannot be accepted by representatives.

Revocation

Withdrawal of an offer before acceptance, effective only when communicated.

Postal revocation rule

Revocation is effective when received, not when posted.

Indirect revocation

Revocation is valid if communicated by a reliable third party.

Revocation of unilateral offer (general rule)

A unilateral offer can be revoked any time before full performance.

Revocation of unilateral offer (exception)

If performance has begun and the offeree is willing and able to complete, the offeror may not revoke.

Communication of revocation

Revocation must be brought to the attention of those who may have seen the offer.

Acceptance

Final and unqualified agreement to the terms of the offer.

Acceptance by correct party

Only the person to whom the offer is made can accept it.

Acceptance to the world

Can be accepted by anyone with knowledge of the offer.

Unequivocal acceptance

Acceptance must exactly match the terms of the offer.

Prescribed mode of acceptance

A specific mode must be followed only if clearly stated as mandatory.

Communication of acceptance

Acceptance must be communicated; silence is not acceptance.

Third-party communication of acceptance

Acceptance may be communicated by an authorised third party.

Postal rule

Acceptance is effective when properly posted, not when received.

Postal rule requirements

Acceptance must be correctly addressed and posted via an authorised method.

Postal rule exceptions

Does not apply if post is unreasonable, incorrectly addressed, or expressly excluded.

Instantaneous communication rule

Acceptance is effective when received by the offeror.

Email acceptance

Acceptance is effective when received on the offeror’s email server.

Email sent during office hours

Acceptance is effective when received, even if not read.

Email sent outside office hours

Acceptance is effective at the start of the next business day.

Certainty and completeness

A binding contract requires all material terms to be certain and complete.

Vague or incomplete terms

Agreements with vague or incomplete terms are not enforceable.

Objective test of certainty

Courts assess whether essential terms were objectively agreed.

Judicial approach to certainty

Courts aim to enforce agreements where a reasonable meaning can be given, especially with prior dealings.