Offer and Acceptance

Offer

A proposal to enter into a contract, made by the offeror to the offeree, explaining the deal and terms.

Requirements for a Valid Offer

A firm intention, completeness, clarity and certainty, and use of plain language.

Firm Intention

The serious intention to be bound by the offer, also known as animus contrahendi.

Mirror Image Rule

The requirement that acceptance must match the offer exactly, with no additional or fewer terms.

Inter Praesentes

Acceptance is effective immediately when the parties are present.

Inter Absentes

Acceptance occurs based on the distance between parties and the applicable theory (Information, Expedition, Declaration, Reception).

Expedition Theory

Under the Postal Rule, the contract is concluded when the acceptance letter is posted.

Pactum de Contrahendo

A contract about contracting; an agreement to enter into another contract in the future.

Option Contract

An agreement where the offeror must keep the offer open for a certain period.

Preference Contract

An agreement that provides the grantee the right of first refusal to enter a specific contract.

Termination of an Offer

Occurs through rejection, counter-offer, death, effluxion of time, revocation, loss of capacity, or acceptance.

Conscious Response

Acceptance must be made by a person aware of the offer; lack of awareness invalidates acceptance.

Authorized Person

The acceptance must be made by the person to whom the offer was specifically addressed.

Rewards

Can constitute a valid offer to the public if the advertiser intends to be bound by performance.

Tender

An invitation to elicit offers from others, not an offer itself.

Auction - Simple

The bidder makes the offer and the auctioneer accepts or rejects it.

Auction - Without Reserve

The auctioneer offers to sell to the highest bidder.

Remedies for Breach

For option contracts, damages measured by positive interest; for preference contracts, the right to step into the buyer's shoes.

Bloom v American Swiss Watch Co

A case illustrating that one cannot accept an offer they are unaware of.

Case: Mouton v Hanekom

Illustrates that an offer must be clear enough to allow a simple 'yes' to create a contract.

Case: Crawley v Rex

Demonstrates that advertisements are generally considered invitations to do business.

Case: Associated SA Bakeries (Pty) Ltd v Oryx & Vereinigte Bäckereien (Pty) Ltd

Illustrates the enforcement of preference contracts and the Oryx mechanism.

Case: Mokone v Tassos Properties CC

Held that pre-emptive rights for land sales do not require the same formalities as the sale itself.