Contract Law: Offer and Acceptance

15 flashcards covering key concepts on offer and acceptance, validity requirements, theories of contract formation, and related concepts.

What are the three aspects to a contract being concluded validly in terms of offer and acceptance?

Making an offer; accepting an offer; concluding an offer (the contract).

What are the five requirements for a valid offer?

Complete; Clear; Intention to create a contract; Communicated to the offeree; Current (not lapsed, rejected, or revoked).

What does 'complete' mean in the context of a valid offer?

The contract must contain all terms the offeror wants and explain them fully so acceptance can bring the contract into force.

What does 'clear' mean in the context of a valid offer?

The offer must not be ambiguous; key terms include contract type, aim, money, and time of performance.

What is meant by 'contract intention' in offer validity?

The offeror must intend to be bound by the offer; advertisements, rewards, and auctions require special consideration; generally advertisements are invitations to treat.

Are advertisements always offers?

No. Advertisements are usually invitations to do business; sometimes they may be offers depending on type and surrounding circumstances.

What does the Consumer Protection Act say about displayed prices?

A supplier cannot charge more than the displayed price; the displayed price is the maximum unless it's clearly an error or price changed.

What is an option in contract law?

An option keeps an offer open for a specific period and makes the offer irrevocable for that period; two contracts exist: the main contract and the option contract.

What is a 'right of first refusal'?

A contract where one party must be offered first if they decide to enter into a specific contract; not an offer but a guarantee; amendments must still be offered to the holder.

What are the acceptance requirements related to identity and knowledge of the offer?

Acceptance must be made by the intended offeree who knows about the offer prior to acceptance.

What is the Information Theory in determining when a contract is concluded?

A contract is formed at the time and place the offeror reads the offeree's acceptance (e.g., postal or electronic communications).

What is the Expedition Theory for postal contracts?

The contract comes into existence when and where the acceptance letter is posted, provided conditions are met (permission to use postal mail, correct address, functioning postal service).

How do telephonic and electronic communications affect when a contract is concluded?

Telephonic and data-message contracts use Information Theory: acceptance is when the offeror hears/receives the acceptance.

What happens if an offer is revoked before acceptance?

If acceptance occurs after revocation, no contract; if acceptance occurs before revocation, a binding contract exists.

What is a counter offer and how does it affect the contract process?

A counter offer is a new offer created when the offeree rejects the original offer and proposes new terms; the roles swap and it is a brand-new offer.