ESSENTIAL REQUIREMENTS OF A
CONTRACT
, ESSENTIAL REQUIREMENTS OF A CONTRACT: OFFER
Contract: An agreement containing a promise or a set of promises that the law
will enforce
Offer: A proposal/promise showing a willingness to contract on firm and definite
terms
Invitation to Treat: An indication that a person is willing to negotiate a contract,
but is not yet willing to be legally bound.
Good Faith (Bona Fide): The underlying principle of any contract- the assumption
that each party intends to fulfil their promises honestly
Freedom of Contract: The principle that individuals are free to enter contracts on
whatever terms they choose, even if the agreement is disadvantageous to them
AN OFFER
➔ An offer must be communicated by the offeror to the offeree
➔ The offeree may then choose whether to accept or reject the offer
Thornton v Shoe Lane Parking: Anyone can make an offer, including an
individual, an agent or even a machine.
Gibson v Manchester City Council: Offers must have clear and definite terms -
not vague
➔ Words like ‘might’ or ‘may be able to’ indicate uncertainty - not definite
terms
,INVITATION TO TREAT
➔ An ITT is not an offer - it’s an indication that a person is willing to
negotiate but is not yet ready to make a legally binding offer
➔ It is simply a public invitation for others to make offers
➔ Responses to an ITT become offers
Advertisements…
Partridge v Crittenden: Advertisements are generally ITT
➔ A person responding to an advertisement would be making an offer
Goods on Shelves…
Fisher v Bell: Goods displayed on shelves are an ITT
➔ The customer makes the offer by presenting the goods at the checkout.
➔ The shop may then accept or reject that offer.
Exceptions to the Rule: Advertisements…
➔ Advertisements can be an offer if there is a clear indication to be bound
➔ These are usually UNILATERAL contracts
Unilateral Contracts…
➔ A promise made in return for an act
➔ Only one party makes a promise, and acceptance occurs through
performance
➔ EG: "If you do X, I will give you Y."
Carlill v Carbolic Smoke: An advertisement may amount to an offer where it
clearly shows an intention to be bound
Bilateral Contracts…
➔ A bilateral contract is a promise exchanged for another promise.
➔ Both parties agree to perform obligations in the future.
, ESSENTIAL REQUIREMENTS OF A CONTRACT: ENDING
1. REVOCATION
➔ Revocation means withdrawing an offer
➔ An offer may be revoked at any time before acceptance takes place
Routledge v Grant: Revocation must be communicated to the other party as
soon as it happens
Dickinson v Dodds: Revocation can be communicated through a reliable third
party
How to get around revocation…
➔ Collateral Contract - a separate contract in which the offeror promises to
keep the offer open the offeror or to exclusively sell to them
2. REJECTION
➔ Once an offer has been rejected it can no longer be accepted
➔ If an offer is made to multiple people, rejection only ends the offer for the
person who rejected it
Hyde v Wrench: Once an offer has been rejected, it cannot be accepted
Ways of rejecting an offer…
● Saying ‘No’
● Making a counteroffer
Counter Offer…
➔ A response to an offer that alters the term
➔ This terminated the original offer and replaces it with a new one
➔ A request for more information is a question, not a counteroffer
3. LAPSE OF TIME
➔ If a fixed period is stated, the offer can end when that duration ends
➔ If no time limit is specified, the offer remains open for a reasonable period
only
Ramsgate v Montefibre: Lapse of time is when a reasonable amount of time has
passed (E.g. 4months 15 Days)
4. DEATH
➔ If the offeree dies, the offer automatically ends (no one can accept on
their behalf)
CONTRACT
, ESSENTIAL REQUIREMENTS OF A CONTRACT: OFFER
Contract: An agreement containing a promise or a set of promises that the law
will enforce
Offer: A proposal/promise showing a willingness to contract on firm and definite
terms
Invitation to Treat: An indication that a person is willing to negotiate a contract,
but is not yet willing to be legally bound.
Good Faith (Bona Fide): The underlying principle of any contract- the assumption
that each party intends to fulfil their promises honestly
Freedom of Contract: The principle that individuals are free to enter contracts on
whatever terms they choose, even if the agreement is disadvantageous to them
AN OFFER
➔ An offer must be communicated by the offeror to the offeree
➔ The offeree may then choose whether to accept or reject the offer
Thornton v Shoe Lane Parking: Anyone can make an offer, including an
individual, an agent or even a machine.
Gibson v Manchester City Council: Offers must have clear and definite terms -
not vague
➔ Words like ‘might’ or ‘may be able to’ indicate uncertainty - not definite
terms
,INVITATION TO TREAT
➔ An ITT is not an offer - it’s an indication that a person is willing to
negotiate but is not yet ready to make a legally binding offer
➔ It is simply a public invitation for others to make offers
➔ Responses to an ITT become offers
Advertisements…
Partridge v Crittenden: Advertisements are generally ITT
➔ A person responding to an advertisement would be making an offer
Goods on Shelves…
Fisher v Bell: Goods displayed on shelves are an ITT
➔ The customer makes the offer by presenting the goods at the checkout.
➔ The shop may then accept or reject that offer.
Exceptions to the Rule: Advertisements…
➔ Advertisements can be an offer if there is a clear indication to be bound
➔ These are usually UNILATERAL contracts
Unilateral Contracts…
➔ A promise made in return for an act
➔ Only one party makes a promise, and acceptance occurs through
performance
➔ EG: "If you do X, I will give you Y."
Carlill v Carbolic Smoke: An advertisement may amount to an offer where it
clearly shows an intention to be bound
Bilateral Contracts…
➔ A bilateral contract is a promise exchanged for another promise.
➔ Both parties agree to perform obligations in the future.
, ESSENTIAL REQUIREMENTS OF A CONTRACT: ENDING
1. REVOCATION
➔ Revocation means withdrawing an offer
➔ An offer may be revoked at any time before acceptance takes place
Routledge v Grant: Revocation must be communicated to the other party as
soon as it happens
Dickinson v Dodds: Revocation can be communicated through a reliable third
party
How to get around revocation…
➔ Collateral Contract - a separate contract in which the offeror promises to
keep the offer open the offeror or to exclusively sell to them
2. REJECTION
➔ Once an offer has been rejected it can no longer be accepted
➔ If an offer is made to multiple people, rejection only ends the offer for the
person who rejected it
Hyde v Wrench: Once an offer has been rejected, it cannot be accepted
Ways of rejecting an offer…
● Saying ‘No’
● Making a counteroffer
Counter Offer…
➔ A response to an offer that alters the term
➔ This terminated the original offer and replaces it with a new one
➔ A request for more information is a question, not a counteroffer
3. LAPSE OF TIME
➔ If a fixed period is stated, the offer can end when that duration ends
➔ If no time limit is specified, the offer remains open for a reasonable period
only
Ramsgate v Montefibre: Lapse of time is when a reasonable amount of time has
passed (E.g. 4months 15 Days)
4. DEATH
➔ If the offeree dies, the offer automatically ends (no one can accept on
their behalf)
