Offer and Acceptance: Contractual Agreement



Offer and acceptance

Offer and acceptance constitute the elements needed in the formation of a contractual agreement which is legally binding. An offer is merely a statement of terms and conditions which the offeror is ready to bind himself into. These terms, technicality speaking, create various responsibilities that both parties to the contract ought to meet in the process of performing the contract. It presents the intention to enter into a legally binding contract on certain terms which must be accepted. For the offer to be legally binding, the offeree must communicate to the offeror that he or she accepts the offer. Here, Harry is the offeror while Hermione is the offeree. This paper is meant to advise Hermione on whether she can take legal actions against the offeror.
For the offer to be legally binding it should clearly show that the offeror has the willingness to create a binding contract. Since harry had advertised in the local Hendon Times that he is will be selling his second hand suitcase at £150 means that the offeror intents to enter into a binding contract. For instance, in the case of Carlill v carbolic smoke ball (1893) 1 QB 256, the defendant published an advert in a newspaper that it will pay a reward to anyone who will be infected with influenza if he uses the ball thrice a day within two weeks. Mrs. Carlil keenly followed the direction and was infected with the flu. The court of appeal held that the plaintiff (Mrs. Carlill) should be paid a reward of 100 pounds . This is because the advert entailed an offer of a unilateral contract that she accepted by adhering to the directions in the offer. Therefore for Harry was to be held liable if Hermione accepted the offer as per the advert placed.
In this case of Harry and Hermione, the original offer was revoked. This is because the offeree responded to the offer by suggesting different terms making the original offer not open for Hermione to accept. For example, Hyde v Wrench (1840)49 ER 132 (a decision by lord Langdale MR ) Chancery Division, wrench offered to sell a piece of a farm for £ 1000 and the claimant (Hyde) offered £ 950 which was rejected by the offeror. The defendant decline to sell the farm made plaintiff unsatisfied and went to court to seek legal action against Wrench for specific performance. It was held that the counter offer destroyed the original offer making it not open for the offeree to accept.
Termination of an offer
There are several approaches of terminating an offer, this includes: reasonable lapse of time and in case of death of either the offeror or the offeree. Termination because of lapse of a reasonable time will depend on the nature of the subject of the offer. For example Ramsgate victoria hotel v Montefoire (1866) LR 1 EX 109, the defendant had an offer to sell its shares at a given price. Later after six months, the plaintiff accepted the offer when the prices were low. The transaction was unsuccessful. It was held that because of the nature of the shares the offer was not binding since a reasonable time had lapsed.
In the case of Harry and Hermione, the offer accepted to buy the bag at £125 without the spare wheels but he did not communicate successfully since she addressed her letter to ‘4.private, drive rather than ‘4.privet, drive. After the time agreed to respond lapsed Harry sold the suitcase to Hagrid this is because the contract with Hermione was terminated.
Revocation of an offer
The offeror has the mandate to withdraw the offer anytime he wishes. There can be a barrier when an offeree provides a consideration that he will be willing to enter into a contract. In the case of, Dickson v Dodds (1876) 2ch 463, the defendant had an offer to sell a building before Friday. Later, on Thursday he agreed to sell it to a third party. He then used a friend to inform the plaintiff that the contract was withdrawn. It was held that there was no contract between the parties and no binding reasons to have the offer open till Friday. Harry had the powers to withdraw the offer before the end of the week since Hermione had provided any consideration like paying a deposit.
Acceptance can either be a pledge or action by an offeree, indicating an intention to agree to the terms and conditions of the offer. Acceptance should be communicated to the offeror by the offeree. The agreement should be certain, it should not be attained under pressure for the contract to be legally binding, acceptance should be reached without fresh conditions and none of the parties should be forced to agree.
Guidelines for acceptance
Acceptance becomes valid only when; it is communicated to the offeree, when the condition of acceptance matches those of the offer and if the agreement is certain.
Communication of the acceptance becomes very essential for the contract to be binding. It is until offeror gets the communication when the agreement becomes effective. However, the offeror can waive the requirement of communicating the intention of accepting (Tylor v Allon, 1966). Also, reasonable communication means between the parties makes the contract binding when there is a sent post. Silence acceptance makes the contract not effective (Felthouse V Bindley, 1862 EWHC CP J35 Court of Common Pleas)
The rule postal rule exists when the acceptance is communicated through a post. One has to use the correct address when communicating. This was to apply in this case of Harry and Hermione. For the contract to be effective Hermione had to communicate successfully using the correct address. Since the address was wrong, the contract to sell the suitcase at £125 was not binding. It would be too unfair to enforce the contract based on a communication that Harry did not receive.
Also, the contract will not be effective if the acceptance terms and conditions of both the offeror and offeree and amounts to a counter offer (Hyde V Wrench, 1840) by lord Langdale MR. If the agreement is uncertain the contract becomes ineffective (Scammells& Nephew V Ouston, 1941).
In conclusion, for an offer to become legally binding its acceptance must be communicated effectively. Therefore Harry did not enter into a contract with Hermione. N this case, he has no obligations to keep the contract binding until the week ends. Hermione did not communicate his willingness to buy the suitcase at 125 pounds since he used the wrong address to post her intentions. This way, she failed to create a binding contract with Harry. Sadly, she has to lose the case.
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