ELEMENTS OF A VALID CONTRACT- OFFER

ELEMENTS OF A  VALID CONTRACT- OFFER

       

OFFER

This is an unequivocal manifestation by one party of its intention to contract with another.  It is a clear intimation of intention to contract.  The party manifesting the intention is the offeror and the one to whom it is made is the offeree.

                   

Nature of an Offer

An offer may take many forms - written, verbal or merely implied from conduct. But whatever be the manner of its manifestation, an offer is either a promise made or something done by a person from which the law will deduce his intention to enter into a contract with another person if that other person does or promises to do, something required.  It must be distinguished from other acts which resemble it, such as:

                  (i)       Invitation to treat

This is a mere invitation by a party to another or others to make offers.  Again the offeror becomes offeree and invitee the offeror.  A positive response to an invitation to treat is an offer.

(a)                       A registered company issues a prospectus inviting the public to apply for its shares.  This is

an invitation to treat (i.e. an attempt to "attract" offers) and not an offer.  

(b)                      The display of goods in a shop or supermarket with price labels attached thereon

(c)                       A government ministry puts an advertisement in the newspapers asking for tenders for the supply of a specified quantity of goods during a specified period of time.  The advert constitutes an invitation to treat and a trader's response thereto is the offer which the ministry may accept or reject. 

(d)                      Advertisement of sale by auction   

                  (ii)     Declaration of Intention

A person may do something which, on the face of it, appears to be an offer.  An example is the case where it was held that an advertisement about an intended auction was a declaration of intention (i.e. a public manifestation of an intended act) but not an offer.  Travelling to the advertised venue does not constitute an acceptance of an offer. 

Rules Relating to an Offer 

The case law relating to an offer has established the following rules:

(i)            The offer may be oral, written or may be implicated from the conditions of the offer.

(ii)          An offer must be specific or definite (so that the offeree may truly understand the intention of the offeror and consider his response thereto.

(iii)        An offer may be conditional or unconditional.

(iv)        An offer can be made to:

(a)           The general public.

(b)          A class of persons, or

(c)           A particular person 

                The offer may prescribe the duration the offer is to remain open for acceptance 

Termination of an Offer 

An offer may come to an end by:

•           Insanity

•           Revocation            Lapsing of time

•           Counter-offer.

•           Death

•           Rejection

•           Failure of a condition subject to which the offer was made.

        (a)     Revocation 

An offer is "revoked" if the offeror changes his mind and withdraws it (expressly or impliedly).  To be valid, the revocation must have been:

(i)            Made before acceptance: 

(ii)          Communicated (i.e. made known) to the offeree - expressly or impliedly. (b) Lapse of time

An offer "lapses" (i.e. comes to an end automatically by operation of law) if:

(i)            It is not accepted within the stipulated time if any.

(ii)          It is not accepted within what appears to the court to be the reasonable time 

(iii)        It is an offer to sell property, and the property is sold to another party before the offeree

accepts the offer: 

        (c)     Counter - offer 

A counter - offer is constituted by the offeree's qualified acceptance which, in itself, becomes the fresh offer and cancels the original offer.

        (d)     Death

The death of either party before acceptance terminates a specific offer.  However, the offer only lapses when notice of death of the one is given to the other.  

        (e)     Insanity

Additionally, the unsoundness of mind of either party before acceptance terminates the offer. 

However, the offer only lapses when notice of the insanity of the one is communicated to the other.

        (f)      Rejection

This is the refusal by the offeree to accept the offer.  The refusal may be express or by implication. 

Silence on the party of the offeree amounts to rejection.   

        (g)    Failure of a condition subject to which the offer was made

An offer made on the basis of a condition or state of affairs existing lapses if the condition or state of affairs fails to materialize.  These are referred to as conditional offers.