offer and acceptance Flashcards
what is a contract?
an agreement between two or more parties which is legally binding on them (Jones, 2011)
what does legally binding mean?
if the contract s breached its against the law
whenever you buy something is it a contract?
yes every purchase is a contract
what are the three fundamentals of contracts?
offer from a party and an acceptance from another and consideration
what is an offer?
a statement or expression of willingness to contract on certain terms made, this is done with the intention that once accepted a binding agreement will exist
how many people can an offer be made to?
as many as you want eg lost dog posters
how do you make an offer?
orally
in writing
implied by action
what is an invitation to treat (I2T)?
a term used in contract law to describe a situation where one party invites others to make an offer to enter into the contract, it cant be accepted and it is only an indication the party is open to negotiation
give examples of an I2T
in a shop when buying an item the price is only what the shop is willing to start negotiating at and the customer is making an offer making it an I2T
goods on display at a store
a website
advertisements
why is an advert an I2T?
because theres only limited stock of the item therefore they cant guarantee you the product meaning millions of contracts would the be broken
what is a unilateral contract?
a type of contract where one party promises to do something on completion of a specific act or condition by another party. eg missing dog posters
what is a bilateral contract?
a normal contract exchanging mutual promises
can advertisements ever be treated as offers?
yes when very specific
what is a tender?
used when a person is seeking to have work done for them and its a statement issued asking parties to submit there terms which they are prepared to carry out this work eg asking contractors to see how much something will cost
what is an example of a referential tender?
ill pay £5 more than the highest bidder and is not allowed
is a tender an offer or an I2T?
an I2T the tendee doesn’t have to accept any offers even if its a low price unless they say they will accept the lowest price then its an offer
what is request for information?
its not an offer eg if i put my pencil up for sale will you buy it? or do you take credit card?
what is communication of an offer?
an offer must be communicated to another party before there can be acceptance eg if you find a lost dog give it back to the owner and dont realise theres a reward you cant claim it once you see the poster
what must an offer have to be binding?
a fixed good/service/action, a fixed price, must be the start of the negotiation, must be communicated to the offeree
how can you terminate an offer?
acceptance: once accepted the offer is gone
death of the offeror or offeree
lapse of time
destruction of the subject matter before acceptance
rejection/counter offer
revocation
what is meant by a lapse in time?
if theres a time limit thats gone over then the offer is terminated if no time limit it will lapse at a reasonable time eg a long time and old age, shares switching etc
what happens if you destroy the subject matter after acceptance?
the contract is frustrated - the contract stands and you breach for not supplying the item
what is meant by a rejection or counter offer?
once the offer is rejected it cant be accepted after as this is seen as a new offer and can be rejected, a counter offer is essentially rejecting the old offer. A request for info is not a counter offer though
what is revocation?
an offer being withdrawn, this can be done at any time as long as its before acceptance and it must be communicated before acceptance
when CANT a unilateral contract be revoked?
not when performance has begun, a reasonable time must be given for performance to be completed eg if a dad said to his son he can have the house if payments are all completed on rime and all the payments have been on time if the dad dies the action can still be completed with reasonable time to complete it
when can a unilateral contract be revoked?
has to revoke the offer using the same channel in which the offer was first communicated with the same notoriety (size and enphasis)
what is meant by acceptance?
a final, unqualified, expression of assent to all term of an offer (Treitel, 1991)
what happens if acceptance introduces new terms?
its a counter offer
how do you communicate acceptance?
oral
in writing
by conduct (Brogden v metropolitan railway company 1877)
what happens if no method of acceptance is stated?
then any reasonable method can be used but if they name a specific method that must be used then this becomes mandatory
what is the postal rule?
when you put an acceptance letter etc in the post box or hand it over the desk this is when the offer has been accepted
when is it reasonable to use post as a form of acceptance?
offeror states by post
previous dealings by post
postal rule can be displaced by contrary intention (Howrd 1974) which only applies to acceptance and not revocation
whats the general rule of acceptance electronicaly?
a telex must arrive on time
must be during business hours
must be based on the businesses expectations of the company receiving this acceptance
