Offer and Acceptance

1530 WordsMay 7, 20077 Pages
Business Law: Offer and Acceptance. For a simple contract to be valid one party must make an offer and the other party accept it. ‘An offer is made where a person (the offerer) unequivocally expresses to another (the offeree) his willingness to make a binding agreement on the terms specified by him if they are accepted by the offeree' (Card 2002). This offer could be made to a specific person, in which case it cannot be accepted by anyone other than that individual. On the other hand it could be made to a group of people or the whole world! Usually the offer will indicate a number of things like in which form the acceptance should take, it may also have a time limit for acceptance attached to it. In which case this will be a…show more content…
Now moving on to ‘Acceptance'. The acceptance can be signaled by communication to the offerer or by conduct e.g. a unilateral contract (see above). A valid acceptance must be a ‘mirror image' of the offer, trying to introduce new terms will be seen as a counter offer and not an acceptance (Adams, 2003). Unless stated acceptance can be in writing, orally or by conduct. A written acceptance might be made by post; this is where the Postal Rule comes into play. In English Law it is the usual ruling that acceptance occurs at the moment of posting, not of receipt. This is because obviously a letter could get lost or delayed in the post. We also run into problems where the offerer posts an acceptance and then changes his mind and sends a rejection of acceptance by faster post. To avoid this, the offerer may use a clause stating that acceptance by post is not appropriate. There is a different rule for instantaneous methods of communication. In this case the acceptance doesn't occur when communication is made but when it is received. In a made up case study Trotter Computers Ltd are manufacturers of computers, they sent a fax to some of their customers stating that they were selling off surplus stock for £150 each. Firstly this is an offer not an invitation to treat because it was specifically sent out to a number of the companies clients so it couldn't be seen by anyone, also it stated in the fax ‘we can offer you a desktop PC of the
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