LAW OF CONTRACTS -

DLW1112
PRESENTATION BY: MILLY KAWIRA KAMENCU

Week 2
ELEMENTS OF CONTRACTS
Week 2
a)Introduction of the elements of a valid contract.
b)Offer
c)Acceptance
OFFER
1) WHAT IS OFFER
- A proposal made by one party (offeror) to another party (the offeree) indicating a willingness to enter
into a contract under specific terms. Examples, public transport, bidding at an auction, submission of a
tender and application for employment.

KEY CHARACTERISTICS
a) May be oral, written or implied from the conduct of the offeror.
b) Intention; the offeror must intend to be bound by the terms of the offer if accepted.
c) Should be definite: terms of the offer must be clear, definite and capable of being understood.
d) Communication: the offer must be communicated to the offeree, either directly or through actions that
the offeree is aware of. (R VS Clarke)
e) May be conditional or absolute.
f) May be general or specific- (Carlill VS Carbonic Smoke Ball- court of appeal held that; even though
the advert wording was unclear, it amounted to an offer to the whole world and the person who
fulfilled the condition contracted with the company. Hence Mrs Carlill was awarded the 100 Euroes.
 TYPES OF OFFERS

a) Express offer- a direct and explicit proposal made by the offeror to the offeree.
b) Implied offer – an offer inferred from the conduct, circumstances, or relationship between the
parties.
c) Cross offer- where a party dispatches an offer to another who has sent a similar offer. No agreement
arises from cross offers for lack of consensus (proper communication). The parties are not ad idem.
d) Standing offer- where a party’s tender to supply goods and services to another is accepted but it is to
be performed at a later date when the requisition is made.
e) Counter offer- by the offeree terminates the original offer and creates the original offer and creates a
new offer or rejects the previous one. (HYDE V WRENCH)
 TERMINATION OF OFFER

1) Revocaction of an offer

- Withdrawal of the offer by the offeror.

- An offer can be revoked by the offeror at anytime before it is accepted (Dickson v
Dodds) unless it is irrevocable due to an option contract or other legal consideration.
- Revocation must be communicated to the offeree and it takes effect upon receipt by
the offeree
2) Rejection by the offeree (FELTHOUSE V BINDING)
3) Lapse of time
4) Death
5) Incapacity of either party
6) Destruction of the subject matter of the offer.
 INVITATION TO TREAT
- An invitation to treat is an indication of willingness to negotiate or
receive offers, but it is not an offer itself. Examples; advertisement, price
lists, display of goods for sale.

Another relevant case law; PHARMACEUTICAL SOCIETY OF

GREAT BRITAIN VS BOOTS CASH CHEMISTS (SOUTHERN
) LTD
- The display of goods in a self service store was considered an invitation
to treat and the offer was made when the customer presented the items
for payment at the cash register.
WHAT CONSTITUTES ACCEPTANCE
- An agreement comes into existence at the subjective moment when the minds meet (CONSENSUS
AD IDEM)

RULES OF ACCEPTANCE
1) Acceptance may be oral, written or implied from the conduct of the offeree i.e in CARLILL V
CARBOLIC SMOKE BALL CO acceptance by Mrs Carbolic smoke Ball Co. took the form of her
conduct by purchasing and consuming the smoke ball.
2) The offeree must have been aware of and intended to accept the offer. CROWN V CLARKE – The
Australian gvt offered 1,000 to any person who volunteered information leading to the arrest and
conviction of the killers 2 police officers. Any accomplice who gave information would be pardoned.
Clarke who was aware of the murder gave the info and the killer were arrested and convicted.
However he made it clear that he had given the information to clear his name.

HOLDING; He was not entitled to the reward as he had given information for a different
purpose hence he had not accepted the offer.
3) Acceptance must be unconditional and unqualified .
- Any variation of offer amounts to a conditional acceptance which is not an acceptance. (HYDE V
WRENCH- the plaintiff modified the defendant’s offer of 1,000 euros to 950 Euros)

4) An offer must be accepted within the stipulated time or within reasonable time (RAMSGATE
VICTORIA HOTEL V MONTEFOIRE)
5) Acceptance must be communicated to the offeror in the prescribed method (if any) or an equally
expeditious method. E.G If by telephone, offeror must hear the offeree’s words of acceptance.
(ENTORES LTD V MILES FAR EAST CORPORATION)
6) Silence by the offeree does not amount to acceptance.
7) In unilateral offers, commencement and continuation of performance constricts acceptance, cannot
revoke the offer during performance.
ERRINGTON V ERRINGTON AND WOODS – They had discontinued paying the
instalments hence the father was not bound to transfer the house to them.
8) In standing offers, a specific order or requisition by the offeree constitutes acceptance and the offeree is
bound. (GREAT NOTHERN RAILWAY CO V WITHAM)
9) Offer to a particular person is accepted only by that person -BOLTON V JAMES
Offer to a class of persons, acceptance is by a member of that class- WOODS V
LECKTREICK
Offer to the general public is accepted by any person who fulfils the conditions- CARLILL V
CARBONIC SMOKE BALL CO. (acceptance need not be communicated)
10) The postal rule of acceptance. Where the offeror authorizes the offeree to communicate through post
the acceptance is deemed complete when the letter is posted. – ADAMS V LINDSELL
- HOUSEHOLD FIRE INSURANCE CO V GRANT (implied authorization)
- Where there is no authorization for one to use post, acceptance is deemed complete when the letter of
acceptance is received by the offeror.
NB: Once an offer is accepted, an agreement arises between parties as there is consensus. It is a
foundation of a contract but not a contract yet because there are other elements of a contract that must be
present to make it a valid contract.
NEXT WEEK
CONSIDERATION
1) DEFINITION
2) RATIONALE
3) SUFFICIENCY OF CONSIDERATION
4) CHARACTERISTICS OF A VALID CONSIDERATION.