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Offer, (2) An Acceptance, (3) Consideration and (4) An Intention To Be Bound

The document discusses the key elements of offer and acceptance in contract law: (1) An offer is a statement of willingness to enter a contract on stated terms, while an invitation to treat is merely an invitation to negotiate. (2) The display of goods in a shop window is generally considered an invitation to treat, not an offer, with the customer making the offer at the cash register. (3) Advertisements, auctions, and tenders are also typically considered invitations to treat rather than offers. (4) For a contract to be formed, an offer must be accepted unconditionally; adding new terms results in a counteroffer.

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69 views

Offer, (2) An Acceptance, (3) Consideration and (4) An Intention To Be Bound

The document discusses the key elements of offer and acceptance in contract law: (1) An offer is a statement of willingness to enter a contract on stated terms, while an invitation to treat is merely an invitation to negotiate. (2) The display of goods in a shop window is generally considered an invitation to treat, not an offer, with the customer making the offer at the cash register. (3) Advertisements, auctions, and tenders are also typically considered invitations to treat rather than offers. (4) For a contract to be formed, an offer must be accepted unconditionally; adding new terms results in a counteroffer.

Uploaded by

jowaheer jaswanath
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Offer and Acceptance

- A contract is formed where there is an (1) offer, (2) an


acceptance, (3) consideration and (4) an intention to be
bound.

- An offer is a statement by one party of a willingness to


enter into a contract on stated terms, provided that these
terms are, in turn, accepted by the party or parties to whom
the offer is addressed.

- Oral, written, conduct

- Offer (contract) v/s invitation to treat (negotiation)

- An invitation to treat (invitation to bargain) is merely an


invitation for customers to submit an offer.

- Invitation to bid  negotiation  offer  acceptance 


contract

- Type of offers

- (a) Display of goods for sale

- An invitation to treat rather than an offer, opportunity to


bargain.

To determine whether the display of goods in a shop


constitutes an offer or merely an invitation to treat, that
is to say ,who makes the offer, the shopkeeper or the
customer? Then when is the contract concluded? At the time
when the customer removes goods from the shelves and put
them in the basket or when the customer presents the goods
at the cash desk?
The display of goods in a shop does not constitute an offer
but an invitation to treat. It is the customer who makes the
offer at the cash desk where may be accepted by the
shopkeeper.
If we consider that an article has been placed in the
receptacle the customer would have no right, without paying
for the first article, to substitute an article which he saw
later of a similar kind and which he perhaps preferred if we
regard the display of goods as an offer, and the customer is
bound at the time removing goods from the shelves. This
limit the customer’s freedom to change his mind and the
shopkeeper’s freedom to bargain will be taken away.
It also takes away the freedom of the shopkeeper to decide
whether or not to deal with a particular customer.
To treat a display of goods as an offer might make the
shopkeeper bound to a couple of contracts which he would be
unable to fulfill, if sometimes the supplies have run out or
some goods have not arrived at the shop yet, and the
shopkeeper cannot fulfill the order to the customer, it may
result in a breach of contract which is an undesirable
situation to the shopkeeper.
In Fisher v Bell [ [1961] 1 QB 394], the general rule that
goods displayed in shop windows amounts to an offer is
illustrated ,where a flick-knife was displayed in the shop
window with a ticket sating “Ejector knife-4s”.The seller
was prosecuted under the Restriction of Offensive Weapons
Act 1959,which claimed it an offence to offer to sell such
things, and finally was acquitted .According to Lord
Parker,”it is clear according to the ordinary law of
contract that the display of an article with a price on it
in a shop window is merely an invitation to treat.It is in
no sense an offer for sale,the acceptance of which
constitutes a contract.”[ Fisher(n 8)] To be short,goods
displayed in a shop window with a price ticket attached was
not an offer but merely an invitation to treat.
As I’ve discussed above, as a general approach, a conclusion
may be drawn that the display of goods only amounts to an
invitation to treat but not an offer, then it is the
customer who makes the offer to the shopkeeper, and the
offer occurs when the customer presents the goods at the
cash desk, where it may be accepted by the shopkeeper.

- (b) Advertisements

- an invitation to treat

- (c) Auction Sales

- an invitation to treat

- (d) Tenders

- an invitation to treat

- (e) Time-tables and vending machines


Acceptance

- Person A made an offer to Person B with terms and


conditions, X and Y. By agreeing to X and Y, a contract is
thereby made between Person A and Person B.

- Person A made an offer to Person B with terms and


conditions, X and Y. However, Person B avers that he will
accept X and Y, but add condition Z. Person B therefore
makes a counter-offer to Person A and consequently nullify
the first offer.

- Person B communicates its acceptance to X and Y, clearly to


Person A.

- A bilateral contract is an agreement between two parties in


which each side agrees to fulfill his or her side of the
bargain. A unilateral contract is a contract created by an
offer that can only be accepted by performance.

- Person A offers to give Rs. 10 to the one who brings an


apple. Without knowing that the reward is Rs. 10m, Person B
brings to Person A an apple. Theoretically, there is no
contract between Person A and Person B as Person B is
unaware of the offer and its terms and conditions.

- There can be no acceptance if no offer is made.

- To form the contract, the offeror makes a promise in


exchange for the act of performance by the other party.
The offeree should be aware of the promise. Then his
agreeing to the terms and conditions of the promise would
be an acceptance.

- If an acceptance is to be communicated in a format (the


format is a condition), it should be mandatory. By not
making it mandatory, it implies an alternative equally
effective method is acceptable and the acceptance would be
effective.

- Person A makes an offer to Person B. In the offer, it is


mentioned that if no reply is received by 7 days, (there
cannot be an obligation to accept an offer) the terms and
conditions are deemed to have been accepted. This rule is
null.

- Postal rule only applies when we are able to use the post.

- Termination  withdrawal (before acceptance), rejection,


lapsed (validity of offer), change in circumstances, death
(offeror, offeree)

- Withdrawal notice must be brought to the attention of the


offeree. Postal rule does not apply.

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