Contract Law

1686 Words7 Pages
Contract is an agreement between two or more competent parties in which an offer is made and accepted, and each party benefits. No contract can come into being unless the following features exist: an actual offer, an acceptance, consideration (this means that each party will contribute something of a material value to the bargain) and an intention to create legal relations. The agreement can be formal, informal, written, or just plain understood. (a) For a contract to exist the offer must be made and then accepted. An offer may be defined as a statement of the terms put forward as the basis of the bargain which carries with it a promise, express or implied, to adhere to the terms. A legally binding offer will include clearly stated…show more content…
Counter-offer has an effect of canceling the original offer and so the original offeror can decide whether to sell it to somebody else at the price he has stated and the terms of the original offer. To conclude it can be stated that Bernard’s letter was not a mere enquiry of negotiation, but a counter-offer, which Anton didn’t accept. Therefore there was no contract between Anton and Bernard and Anton was free to sell the boat to Celine. However from the other point of view, it can be argued that Bernard’s phrase that he is willing to accept Anton’s offer identifies that he is just asking some further information and tests out whether further negotiation with Anton is possible. This means that the original offer was not destroyed, but due to the fact that his reply was vague it can be considered not enforceable, as offerees should explain them clearly as well as the offerors. Therefore no contract took place in this situation. (b) In this scenario Bernard replied by return of post, and accepted Anton’s original offer. Usually, communication is effective only when it reaches the offeror or the offeror’s place of business. However, Postal rule is a well-known legal principle in contract law. The postal rule of acceptance of an offer became entrenched in the common law of contact in the English courts and therefore in the Australia courts during the nineteenth century. And the postal rule is an exception to the general rules of contract law in common

More about Contract Law

Open Document