Contract: Offer and Acceptance

What is the difference between an agreement and a Contract

An agreement is an offer and acceptance and it forms part of a contract but is not legally binding on its own. A contract is formed through agreement, intention to create legal relations, certainty, privity and consideration.

PRINCIPLE ONE:

For there to be a valid contract one must identify the existence of an agreement and there must be consensus ad idum (meeting of the minds)

The courts look objectively at the parties intention to determine whether the reasonable man would say the parties were in agreement (element of certainty)

PRINCIPLE TWO: Whether there is a unilateral offer

One of the parties in the contract bears the major contractual obligation and the discharge of which is not dependant on the action of the other party.

PRINCIPLE 3: Can a unilateral offer be revoked

A unilateral offer cannot be revoked after performance is done even if the offeror is not aware performance has commenced. but this only applies to substantial performance the offeree can’t claim anything if they only began the performance and did not complete it.

PRINCIPLE FOUR: How should the revocation of the unilateral offer be communicated?

The revocation must be done in the same/similar or more efficient method

PRINCIPLE FIVE: Is there requirement to communicate acceptance and what serves as consideration to discharge the agreement

No requirement to communicate ones intention to accept as the performance of the act constitutes acceptance (agreement is determined by full performance of the act) - acceptance and consideration are the same as consideration dependant on full performance of the act.

What is a Bilateral offer

Both Parties agree to discharge an obligation and failure to do so is a breach of contract.

Direct Offer: PRINCIPLE SIX:

Where the terms are certain the court will treat one statement from one party as a clear offer which can be accepted.