Unit 1 - Offer, Acceptance & Legal Intentions Flashcards
What is an offer?
An expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepte
What forms can an offer take?
Letter, newspaper advert, email, text message, conduct
What is an invitation to treat?
Not a formal offer and a mere invitation to negotiation.
Can goods in a shop be constituted an offer?
No - the goods are on display as an invitation to treat to select which goods you want and then you offer to the cashier (who in turn accepts by selling to you).
Can advertisements be constituted as an offer?
They are generally invitations to treat, however they can sometimes be seen as unilateral contracts (i.e. where one party is making the contract but no one is bound to do a specific act).
Examples include offers of rewards.
Can auctions be constituted as offers?
The bids are seen as offers and the auctioneer’s gavel is the acceptance of the last bid.
However, sometimes a unilateral contract is created when an auctioneer may make certain statements (e.g. ‘to the highest bidder’ or ‘this will sell today’)
Are tenders constituted an offer?
They are likely an invitation to treat and the tender will be an offer to do the work. However if the company promised to consider all conforming tenders, there is a unilateral contract. If they do not offer to the lowest tender offer this may be a breach of contract.
What constitutes an acceptance of an offer?
An unqualified expression of assent (i.e. must be communicated and cannot contain any additional conditions)
How can acceptance be communicated?
It must be clearly communicated to the offeror or their agent. Examples include letter, conduct and even silence in some circumstances (if coupled with conduct).
What is the postal rule?
When a letter of acceptance will be effective when posted even if the letter is lost. There are specific criteria to be satisfied for this to apply.
What are the criteria for the postal rule to apply?
It must be reasonable to use the post in the circumstances (consider time frames, postage paid)
The letter was properly stamped and addressed
The postal rule had not been excluded by the offeror
If the offeror had stipulated it needed to be notified or ‘told’ of any acceptance
When can an offer be terminated?
Revocation by the offeror
Rejection by the offeree (also in the case of a counter-offer)
Lapse of time
What is an exception to terminating via revocation?
Where the offeree gave something to keep the promise of the offer open. For unilateral contracts, termination but be communicated to the offeree in order to be effective.
What is certainty in a contract?
Whether or not parties have reached complete agreement in relation to the material terms of the deal.
What is judged to determine whether parties have understood and reach complete agreement?
Whether the parties are in the same trade
Trade usage
Whether the agreement has been acted on for any length of time
Whether there is an objective mechanism for resolving any uncertainty such as an arbitration clause
