Law and Tax
Formation of Contracts
Introduction
An offer is the first step in the formation of a contract. It is something that creates a power of acceptance. It is a proposal made by one party to another to enter into a legally binding agreement with her. In Acme Grain Co. v. Wenaus, 1917, it was observed:
... To constitute a contract, there must be an offer by one person to another and an acceptance of that offer by the person to whom it is made. A mere statement of a person's intention, or a declaration of his willingness to enter into negotiations is not an offer and
cannot be accepted so as to form a valid contract.
An offer is the manifestation of willingness to enter into a bargain, which justifies another person in understanding that her assent can conclude the bargain. It must be a clear, unequivocal and direct approach to another party to contract. A person is said to have made an offer, when she “signifies to another her willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence.” The person making the offer is known as the offeror, proposer, or promiser and the person to whom it is made is called the offeree or proposee. When the offeree accepts the offer, she is called the acceptor or promisee . The offeror or proposer expresses her willingness ‘to do’ or ‘abstain from doing’ something with a view to obtain acceptance of the other party to such act or abstinence. Thus, there may be ‘positive’ or ‘negative’ acts which the proposer is willing to do. 1.1 Mode of Making Offers
2 The offer must be intended to create, and be capable of creating, legal relations. 3 The terms of the offer must be definite, unambiguous and certain or capable of being made certain . 4 An offer must be distinguished from a mere declaration of intention or an invitation to offer or to treat. A mere statement of intention, made in the course of conversation, does not constitute a valid offer, even though
Introduction
An offer is the first step in the formation of a contract. It is something that creates a power of acceptance. It is a proposal made by one party to another to enter into a legally binding agreement with her. In Acme Grain Co. v. Wenaus, 1917, it was observed:
... To constitute a contract, there must be an offer by one person to another and an acceptance of that offer by the person to whom it is made. A mere statement of a person's intention, or a declaration of his willingness to enter into negotiations is not an offer and
cannot be accepted so as to form a valid contract.
An offer is the manifestation of willingness to enter into a bargain, which justifies another person in understanding that her assent can conclude the bargain. It must be a clear, unequivocal and direct approach to another party to contract. A person is said to have made an offer, when she “signifies to another her willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence.” The person making the offer is known as the offeror, proposer, or promiser and the person to whom it is made is called the offeree or proposee. When the offeree accepts the offer, she is called the acceptor or promisee . The offeror or proposer expresses her willingness ‘to do’ or ‘abstain from doing’ something with a view to obtain acceptance of the other party to such act or abstinence. Thus, there may be ‘positive’ or ‘negative’ acts which the proposer is willing to do. 1.1 Mode of Making Offers
2 The offer must be intended to create, and be capable of creating, legal relations. 3 The terms of the offer must be definite, unambiguous and certain or capable of being made certain . 4 An offer must be distinguished from a mere declaration of intention or an invitation to offer or to treat. A mere statement of intention, made in the course of conversation, does not constitute a valid offer, even though