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General principles of contact - Essay Example

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General principles of contact

There is also an objective and subjective component. The objective test relies on whether or not an "independent observer, appraised of the background facts known to the parties, would consider there to have been an agreement, and if so what agreement".2 It is beneficial to reduce an agreement expressly, or in written form, where there will be little doubt to its existence and content or terms.3 Where there are doubts, however, the law uses a two-fold process of offer and acceptance.4 Firstly, an offer intends to make a contract. For an offer to be complete, there must be an intention, it must be communicated, and it must be certain and complete. No further steps are anticipated. "I accept" will form a contract. It will not be an offer if the offeree does not hear it from the offeror.5
The offer may be destroyed by withdrawal by the offeror, a lapse of time specified by the offeror, or at a reasonable time after being made, and also by being superseded by a subsequent offer (by offeror or offeree), or lastly being rejected by the offeree.6
Offers must be distinguished from an invitation to treat. An invitation to treat gives the offeree a chance to make an offer to purchase the item. Some examples include: Advertisements or shop displays.7 Unilateral offers are contracts where the acceptance and performance are simultaneous, and takes the form of: "If you do this then I promise that" (examples: rewards and tenders). The contract is unilateral because only the offeror is bound.8 Until the offeree performs, he/she has not accepted. When performance has happened, the offeree has nothing left to do.9 However, there are problems with unilateral offers. The normal rule is that you can revoke until communication of acceptance, which may lead to unfair results. The "Walking to York" example suggests that you must walk all the way to York in order to have accepted the unilateral contract. Thus, walking 80%, or partial walking, is not acceptance. Performance then must be complete or the offer can be revoked.10 Partial completion, however, may give rise to quantum meruit, which allows for the offeror to revoke the offer but to award the offeree a reasonable value for the time and effort he has put in up to the time of revocation. It is usually imposed to avoid the unjust enrichment of one party at the expense of another.
For there to be a valid acceptance of an offer, there must be a mirror image of the offer without adding anything new.11 The communication of acceptance must be expressly or impliedly dictated.12 Silence is not acceptance.13
In order for a contract to be considered binding there must be consideration. The Pollock definition of consideration is: "An act or forbearance of one party, or the promise thereof is the price for which the promise of the other is bought, and the promise thus given for vale is enforceable." There must be a benefit - detriment component to show a causal link. The case of Thomas v Thomas states that "consideration means something which is of some value in the eye of the law, moving from the plaintiff to defendant. It may be some benefit to the plaintiff or some detriment to the defendant".14
More specifically, however, the formation of a straightforward civil engineering contract follows a similar process. It may proceed in the following stages: invitation to tender; tender or ...Show more


General principles of contact law may appear obscure to unravel, however the steps to identify the existence of a contract lies in the law and its basic formation. The formation of a contract is important to determine. It must first be determined whether a contract exists or not; if so, when it was formed; and, what terms are contained within it…
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General principles of contact essay example
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