Offer and Acceptance

1144 WordsMay 23, 20085 Pages
Without offer and acceptance there can be no contract and so it is essential that the law provides rules to identify what constitutes both an offer and an acceptance. An offer may be defined as a statement of willingness to contract on specified terms made with the intention that, if accepted, it shall become a binding contract. An offer may be express or implied from conduct. In many cases it is crucial to determine when and where a contract is actually formed and this too needs rules. In the vast majority of contracts these rules do not prove difficult to explain or complicated to apply but in some areas there is confusion. Initially there can be significant problems in identifying what an offer actually is. An offer must be…show more content…
It was held that where a communication arrived but was not seen immediately because it arrived out of office hours, the case established that the acceptance would take place bearing in mind the intentions of the parties, sounds business practice and where the risk might lie. This is a practical solution but it does mean that it is likely to be determined on a case by case basis as the factors are likely to change. It is interesting to note that the above cases deal with telex machines – a now obsolete form of instantaneous communication. There are no authorities dealing with faxes, text messages, instant messages or email but it is likely that the principle of sound business practice, established in Brinkibon, will continue to guide the courts. The final area of discussion is that of the the “battle of the forms” – the traditional approach to offer and acceptance is that acceptance will only work if it exactly matches the offer. This is the so-called “mirror-image” approach. Even the slightest ambiguity in an ‘acceptance’ can render it ineffective, as in the case of Gibson v Manchester, where the word “may” proved fatal. This problem becomes apparent when companies negotiate on their ‘standard terms’ which may never exactly match. In Butler Machine Tool the court said that the right approach is to pick apart the negotiations until a matching offer and acceptance is found. If one is
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