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Note 1. Offer
Note 1. Offer
Note 1. Offer
Contract must be enforced by law. If the intention to create legal/contractual relations is missing,
then there is no contract, it just an agreement.
Meaning of Offer
An offer is an expression of willingness to contract on specified terms, with the intention that it is to
become binding as soon as it is accepted.
McKendrick:
An offer is a statement by one party of willingness to enter into a contract on stated terms,
provided that these terms are, in turn, accepted by party or parties to whom the offer is
addressed.
Whether the offeror intends to be bound is decided objectively (the offeror may be bound if
a reasonable man would believe that the offeror intends to be bound)
An offer to contract requires a response from the offeree, either an acceptance or a
rejection.
Cases:
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1. Offer- English Law CONTRACT LAW
May & Butcher Ltd v The King [1929] All ER Rep 679
Fact: The parties had agreed that the tents would be sold at a price to be agreed later, but no price
was ever agreed.
Held: An agreement to enter into an agreement by which some critical part of the contract (eg the
price) is left to be decided later is no contract at all. The terms of the contract must be certain. If not,
there are no contract.
Held: The clause “on hire-purchase terms” was so vague that no precise meaning could be
contribute to it.
-If an offer is subject to a condition precedent, the offer is not binding at all until and unless the
condition precedent is fulfilled. Even if such an offer is ‘accepted’, there is no contract comes into
existence.
Fact:
The offer specified that payment to plaintiff must be by confirmed letter of credit to be
opened by A.
Defendant agreed to ensure that A would open the letter of credit.
When A didn’t open the letter of credit, defendant refuse to take delivery of the goods sold
to them.
Plaintiff claimed damages for breach of contract.
Defendant argued that the opening of letter of credit by A was a condition precedent
attached to P’s offer. Since no letter of credit was opened, there is no contract.
A contract had come into existence when defendant accepted plaintiff’s offer. D was obliged
to take delivery of the goods.
Defendant’s obligation to ensure that A would open the letter of credit, was not a condition
precedent to the formation of a contract between plaintiff and defendant. It was a term of
that contract.
Since defendant breached that term of the contract, and had failed to take delivery of the
goods, defendant had breached the contract.
Plaintiff was entitled to claim damages for breach of contract from defendant.
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1. Offer- English Law CONTRACT LAW