The Offer

Question 1

6 requirement of contract formation

Answer 1

• One party makes an OFFER
• That offer is ACCEPTED
• Both parties provide CONSIDERATION
• Both parties have AN INTENTION TO CREATE LEGAL RELATIONS
• Both parties have CAPACITY to make a contract
• The PURPOSE of the contract is valid

Question 2

What are the legal rules for an offer to be valid?

Answer 2

a) . An offer may be made to one individual, to a group of people or even to the whole world
e. g. Carlill v Carbolic Smoke Ball Co

b) . The offer must be communicated to the offeree.
c) . An offer may be terminated before it is accepted in a number of ways:
d) . An offer must be distinguished from an invitation to treat.

Question 3

b). The offer must be communicated to the offeree.

Answer 3

○ If a person does not know that an offer exists when acting in a particular way he/she cannot later claim that the act constituted acceptance of the offer.

E.g.1. Bloom v American Swiss Watch Co
E.g.2. Inland Revenue Commission v Fry

Question 4

c). An offer may be terminated before it is accepted in a number of ways

Answer 4

i) . It can be revoked by the offeror at any time BEFORE it is accepted.
- Revocation means that the offer to make a contract is withdrawn. BEFORE ACCEPTANCE

E.g. Routledge v Grant 1828

ii) . The offer may be terminated by lapse of time
iii) . The offer may be terminated by the offeror making a revised offer
iv) . The offer may be terminated if the offeree makes a counter-offer

Question 5

Withdraw and offer

Answer 5

the offeror must COMMUNICATE the decision to withdraw an offer to the other party.
Communication of the decision to withdraw can be made by the offeror him/herself or by any RELIABLE THIRD PARTY

e.g. Dickinson v Dodds 1876