Offer and Acceptance
What is Contract Law?
Core function of Contract Law is to enforce mutual Agreements.
Agreements can only come into existence when there is a clear and
unequivocal OFFER and ACCEPTANCE Having an agreement does not mean
that you have a legally binding contract. To enforce an agreement
you have to prove the existence of an INTENTION to create legal
relations and CONSIDERATION, only then will you have a valid
CONTRACT.
CONTRACT- 4 elements1. OFFER2. ACCEPTANCE3. INTENTION4.
CONSIDERATION
How was Contract Law formed? (History)
The Doctrine of Freedom of Contract (DOC) is what drove the
development of Contract Law. The DOC encourages parties to
voluntarily enter into and agreement. The law of Contract ONLY
intervenes when there is a breach of contract. Courts have been
seen to intervene to protect weaker parties during the age of
rising commercial and economic activity, due to the fact that when
there are two contracting parties who have unequal strength, the
stronger may impose terms on the weaker. (Norweb Plc v Dixon &
W v Essex CC) The Unfair Contract Terms Act 1977 defies the DOC and
emphasizes on protection of weaker parties.
Privity of Contract?
Only parties to a contract or privy to a contract may have any
remedy or compensation. This must now be considered in the light of
the Contract (Rights and Third Parties) Act 1999.
Vitiating Factors?
A valid contract may be declared Voidable in light of vitiating
factors. This is where intention of the parties is questioned due
to existence of fraud, misrepresentation or mistake.
Intention?
To verify the existence of an offer and acceptance the courts
make use of an objective test in order to infer the intention of
the parties to reach an agreement based on facts.
In order to answer a question on Formation of Contract:-
1. Identify Offer and Acceptance2. Asses Intention to Contract
When a case does not fall into the general frame work of the rules
of offer and acceptance, courts will focus on intention of the
parties. (Clarke v Dunraven)
Objective Test?
This test examines what parties said and did externally, not
what they actually intended to say or do.
