Welcome to the Foundation of Contracts!

Ever wondered why a shop can refuse to sell you a coat even if the price tag says £5? Or why eBay bidding works the way it does? That is exactly what we are looking at in Offer and Acceptance. This is the first "brick" in building a valid contract for your Paper 3 exam. Don't worry if it seems like a lot of rules at first—once you see the logic behind them, they fit together like a puzzle!

1. What is an Offer?

An offer is a statement of terms upon which the person making the offer (the offeror) is willing to be bound. It must be clear, certain, and show that the person is ready to start a legal agreement immediately.

Key Rule: An offer can be bilateral (a promise for a promise, like buying a car) or unilateral (a promise for an act, like offering a reward for finding a lost dog).

Offer vs. Invitation to Treat (ITT)

This is a very common area for exam questions! An Invitation to Treat is not an offer; it is an "invitation to bargain" or a way of saying "I am open to offers."

Common examples of ITTs include:

  • Goods on shop shelves/windows: The shop is inviting you to make an offer at the till.
  • Advertisements: Usually, these are ITTs because if they were offers, the seller might run out of stock and be sued by everyone who saw the ad.
  • Catalogues and Price Lists: These are just providing information so you can decide to make an offer.

Quick Analogy: An Invitation to Treat is like a "flirtation"—it shows interest but doesn't mean you're married yet! An Offer is the "proposal."

2. Special Scenarios (Syllabus Specifics)

The syllabus requires you to know how these rules apply in three specific situations:

A. Auction Sales

In an auction, the rules are slightly different:

  • The auctioneer’s request for bids is an Invitation to Treat.
  • The bid made by the person in the crowd is the offer.
  • The fall of the hammer is the acceptance.

B. Contracts by Tender

A "tender" is when a business (like a council) asks companies to submit a price for a job (like building a new road).

  • The request for tenders is usually an Invitation to Treat.
  • The tenders submitted by companies are the offers.
  • The person who requested the tender can then choose which offer (if any) to accept.

C. Standard Form Contracts

These are "take it or leave it" contracts, like the terms and conditions you tick when installing an app. In business, this often leads to the "Battle of the Forms." If Company A sends an order on their terms, and Company B accepts but sends their own terms back, Company B has actually made a counter offer. Usually, the "last shot" fired (the last set of terms sent before the contract begins) wins.

3. Terminating an Offer

An offer doesn't stay open forever. It can be killed off (terminated) in several ways:

1. Rejection: The person receiving the offer (the offeree) says "No." Once rejected, the offer is dead.

2. Counter Offer: If the offeree says "Yes, but I’ll pay £10 less," the original offer is destroyed. You cannot go back and try to accept the original offer later.
Example: A offers to sell a bike for £50. B says "I'll give you £40." The £50 offer is now gone.

3. Request for Information: This is not a counter offer. It is just asking a question. The original offer stays alive!
Example: A offers a bike for £50. B asks "Does that price include the helmet?" This is just a question; B can still accept the £50 offer.

4. Revocation (Withdrawal): The offeror can take back the offer at any time before it is accepted. However, they must communicate this withdrawal to the offeree.

5. Lapse of Time: If the offer has a deadline (e.g., "This offer ends Friday"), it dies then. If there is no deadline, it dies after a "reasonable time."

6. Death: Usually, if the offeror dies and the offeree knows about it, the offer ends.

Quick Review: Counter Offer vs. Request for Info

Common Mistake: Students often confuse these. Look closely at the wording in scenario questions. If the person is trying to change the terms, it's a counter offer. If they are just clarifying something, the offer is still open!

4. Acceptance

Acceptance is the final and unconditional agreement to all terms of the offer. To have a "meeting of minds," the acceptance must be a "mirror image" of the offer.

Rules of Acceptance:

  • Must be communicated: You cannot accept a contract in your head. The offeror must generally know you have accepted.
  • Silence is NOT acceptance: You cannot force a contract on someone by saying "If I don't hear from you by tonight, we have a deal."
  • The Postal Rule: This is an old but important rule! If acceptance is sent by post, it is effective the moment the letter is posted (put in the post box), not when it arrives. (Note: This only applies to acceptance, not to the offer or revocation!)
  • Modern Communication: For "instant" communication like email or text, acceptance happens when the message is received (usually during business hours).

Key Takeaways for Your Exam

AO1 (Knowledge): Be ready to define "Offer," "Invitation to Treat," and "Acceptance" using clear legal terminology.

AO2 (Application): In Paper 3 scenarios, always check: Was there an offer or just an ITT? Was the acceptance communicated properly? Did a counter offer kill the original offer?

AO3 (Evaluation): Think about whether these rules are fair. For example, is the Postal Rule still "effective and certain" in the digital age? (The syllabus highlights effectiveness and certainty as key concepts).

Top Tip: When answering a problem question, always deal with Offer and Acceptance separately. Start by identifying the Offer, then move on to see if it was terminated, and finally check for a valid Acceptance.