The Offer and Acceptance Model Is Flawd- Only an Agreement Is Necessary

The Supreme Court of Queensland, in the recent case of Baldwin & Anor v Icon Energy Ltd & Anor [2015] QSC 12, had to give consideration as to whether the ‘ agreement to negotiate’ is legally binding on the parties. The solicitors for the defendants ‘Icon Energy Ltd’ and their wholly owned subsidiary ‘Jakabar PTY LTD’ were Hopgood Ganim. The solicitor for ‘Ronald Baldwin’ and ‘Souther Fairway Investments PTY LTD’ was Clayton Utz.

Under Common Law, for a contract to exist, three elements must be present: an offer, an acceptance and a consideration. The notions of offer and acceptance under Common Law are not fundamentally different from those in French contract law, although their effects may differ. The offer indicates the willingness of a party to enter into a bargain, and the acceptance reflects the agreement of the other party to the offer.

An offer is a clear statement of the terms by which the person making the offer is prepared to be bound. An offer may be conditional. At the same time an offer conveys to the other party in an invitation to accept and confers on that party the power to bind both parties in contract. A person who makes an offer submits, in a sense, to the will of the other party because it is the latter who decides whether or not to bring a contract

The doctrine of consideration is one of the most established doctrines within the common law of contract. This essay will discuss the impact of Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5 on the doctrine of consideration. It will shed light on the rules of consideration, ways to avoid consideration, application of the rules in the specific circumstance of performance of an existing duty in cases. Evidently an alteration to the rules and practices would be displayed. Courts today need to make a distinction between everyday social agreements and legally binding contracts, this is where the doctrine of consideration manifests. This case introduces the practical benefit rule needed for consideration however, this case did not alter set legislation formed from the case Stilk v Myric[1809]. As it was held in the Court of Appeal and not seen or upheld by the House of Lords.

The decision in Adams v Lindsell did not instantly command uncritical acceptance. In 1880, in Byrne v Van Tienhoven, Lindley J said ‘It may be taken as now settled that, where an offer is made and accepted by letters sent through the post, the contract is completed the moment the letter accepting the offer is posted, even though it never reaches its destination.’ (Furmston, 2012, p.70).

(L) The offer will be accepted subjecting to certain conditions is a “conditional acceptance”. There are three possibilities in key case of Master v Cameron (1954) 91 CLR 353, which are the contracted has been concluded, the parties are bound to prepare a formal contract, the contract has been conclude, but will not commence till the formalities have been completed, and lastly the contract is not complete and will not be binding until and unless the parties complete their specific agreed requirements (Firzpatrick, et al., 2014)

A Contract requires several elements in order to be considered enforceable. However for the purpose of this essay we would explore one of these elements in order to effectively understand the controversial cases of Williams v Roffey Brothers and Nicholls (contractors) Ltd (1990) and Stilk v Myrick (1804). Before going any further one should briefly understand the doctrine of Consideration. Despite the vast amount of content written, the doctrine of consideration is still to this day unclear due to the inconsistency of the courts and its application of necessary rules. Consideration refers to that which the law deems as valuable in that the promisor receives from the promise that which was promised. In other words, it is the exchange of something of value between the parties in a contract. One should be mindful that in English law, every promise may not be legally enforceable; it requires the court to distinguish between are enforceable and non-enforceable obligations. This brings us to the controversial cases of Stilk v Myrick and Williams v the Roffery brothers. Many argue that that the case of Williams was wrongly decided leading to impairments in the rule initially established in Stilk v Myrick. This essay seek to analyse and critique the cases of Stilk v Myrick and Williams v Roffey Brothers and also highlight whether or not the new rule of Practical benefit lead to serious impairments in later cases.

The law of contract simply illustrates that contracts are legally enforceable agreements that are freely entered and negotiated into by the parties and can be legally binding where all contracts are agreements but not all agreements can be contracts. The meaning of a contract is to create an arrangement that the parties have completed and to mend their privileges and responsibilities in accordance with that arrangement. The courts have to put into effect a lawful agreement as it is created, unless there are reasons that obstruct its implementation. Laws recommend and limit the terms of a contract where the overall society is affected. The courts may not invent an agreement for the participants. When the participants have no fast or indirect agreement on the essential terms of a contract, there is no contract. Courts are only authorised to impose contracts, not to

An offer, according to business law, is an expression that an individual is willing to enter into a contract, provided specific terms are adhered to and as soon as it is accepted it ultimately becomes binding by the person with whom this offer has been addressed to (Riches & Allen, 2013). To form an agreement, there has to be an offer by a party, an exchange of thought or consideration (an item of value), and an acceptance by the other party. The individual that proposes the agreement terms makes the offer, and is referred to as the offeror within the contract or agreement law while the individual to whom the proposal or offer is made is called the offeree (Llewellyn, 2013). This case study describes a situation where an individual owned a new cell phone that gave him a lot of trouble. One day it stopped doing what it was supposed to and the owner yelled out to a neighbor that he would sell

The formation of a contract requires offer and acceptance in order to become legally binding. An offer is an expression of willingness to contract on specified terms made with the intention that it is to become legally binding as soon as it is accepted by the person to whom it is addressed. The advert above is a unilateral contract as “one party assumes an obligation under the contract”. Consideration is the act of performance in accordance with the terms of the offer, in this case acceptance would take place once the offeree starts the race. For example, the case of Carlill v Carbolic Smoke Ball Co [1892] where Mrs Carlill was entitled to the reward as the advert constituted an offer of a unilateral contract. She had accepted by

In every free market economy individuals are allowed to autonomously enter into contracts and for contracting parties to make their own decisions about the types of contract they enter into and the terms on which they will contract (Paterson, 2009). A definition by Hall (1997) highlights that a contract is an exchange of promises carried through by a process of offer and acceptance with the intention of creating a legally binding deal, in which the English case of L’ Estrange v F Graucob Ltd it has been asserted that when a person signs a contractual documents they are bound by all its terms. In the given case study several issues arise as the conduct of the other party (Mr Walter) is contrary to the signed terms of the contract; non-compliance with Clause 2 of the contract and fraudulent or falsified financial statements by Mr Walter.

Conditional acceptance falls under the first rule and occurs when an offeree accepts an offer, provided that changes are made to certain terms or a condition or event is carried out. This essay will discuss whether acceptance given conditionally will still result in a legally binding agreement; it will highlight various principles such as subject to finance clauses, conditional precedents, and agreements subject to a final contract, counter-offers and ambiguous and uncertain terms.

Contractual agreement has always been viewed in terms of offer and acceptance. The universal principle to contract law has always been parties may get into an agreement in whichever way they deem fit and they are subject to certain terms as they choose. As far as legal requirements vital to their formation are binding contracts may be formed. Moreover a binding agreement may be manifested in terms of writing or in verbal form.

This must be communicated to the offeree. Refer to Carlill v Carbolic Smoke Ball Co , Blair’s suggesting the coffee beans is an offer to Candy. From the fact, it clearly identifies the terms such as the length and the content of the contract and communication involves. So it is manifest that an offer exists. Next is to discuss it there an acceptance in the contract. An acceptance is a final, unqualified assent to the terms of an offer specified by the offeror . It also requires communication to the offeror. According to The Crown v Clarke , the acceptance should be made in reliance on offer. In this case, Candy accepted Blair’s offer, which symbolises as an acceptance. Prior to the intention to create legal relations, one noticeable argument may be the time of the intention. Acceptance created may be subjective or conditional upon a special event , which whether the conditional acceptances should be viewed as intention to be bounded in the contract is unclear like Masters v Cameron . To some extents, Candy accepted all the terms except the contract length while Blair agreed to edit this term later when they entered a written contract. But it did not mention about the following process of this contract. It is acknowledged that the agreement agreed with might only be regarded as “Head of Agreement” and the intention would be at the time the contract being signed. Or more information is required to adjust this argument. Based on the justification above,

Consideration is often defined as “a detriment voluntarily incurred by the promisee… or a benefit conferred on the promisor in exchange for the promise.”1 Whilst the doctrine of consideration does, in some cases, cause parties to experience injustice, sometimes something that the courts fail to resolve, consideration is a crucial element to the formation of a legally binding contract. This paper will not only explain why the High Court should not abolish the requirement for consideration but will also highlight its usefulness in contract formation.