A contract intends to formalize an agreement of two or more parties, in relation to a particular subject. Contracts can cover an extremely broad range of matters including the sale of goods or real property, the terms of employment or of an independent contractor relationship, the settlement of a dispute and ownership of intellectual property developed as part of work for hire. Essential Elements of a Contract
* Clear certain and communicated agreement. Meaning that the parties are consensus ad idem or are of the same mind. The parties to the contract have mutual understanding of what the contract covers, eg. In a contract for the sale of a ‘mustang’ the buyer thinks that he will obtain a car and the seller believes he is contracting to sell a horse, there is no meeting of the minds and the contract will likely be held unenforceable. Offer and Acceptance
Agreement = offer + acceptance
Requirements of a valid offer
* Offer must be definite. It must not:
* Leave aspects of the agreement dependent upon the future will of parties (Kantor v Kantor) * Leave aspects of the agreement blank or open to subsequent negotiation (Bundell v Blan & King v Potgieter & Finestone v Humburg) * Contain wording which is vague
* Offer must be made with the intention of being accepted by some other person. Excludes the following which are not offers but simply invitations to do business. * General statements of lowest price (Efroiken v Simon)
* Statements of lowest price in response to a specific inquiry (Harvey v Facey) * Invitations to tender (Spencer v Harding)
* Newspaper advertisements in general (Shepherd v Farrel Estate Agency) * Advertisements by transport companies of their charges for conveying goods (Frazer v Frank Johnson) * Displays in shop windows (Crawly v Rex)
* Displays on self service counters (Pharmaceutical Society of Great Britain v Boots Cash Chemists Ltd) * Restaurant menus.
Adverts constitutes offer (Carlill v Carbolic Smoke Co
One reward is only offered first person doing what is required is entitled to that reward. (Lee v American Swiss Watch Co.) No reward may be claimed by anyone who fulfilled the requirement not knowing of that reward (Bloom v American Swiss Co.) What is required must be done voluntarily.
* Offer must not have been revoked. Offer may have been revoked or lapse in one of the following ways: * Offeree is notified that it has been revoked.
* Either the offeror or offeree dies.
* Lapse of a reasonable period of time.
* Supervening impossibility or illegality
* Rejection as where the offoree makes a counter offer which contradicts the original offer by proposing specific alterations to the terms of that offer. * Offer must be one on which an optimal time limit has not expired. * Note: keeping an offer open until the offeree is in a position to accept is permissible, since the period, although unknown, is not indefinite (Hanekan v Mouton) * In the case of an option which is offered gratuitously, silence is not acceptance (Beinart v Zeffert) * The right of acceptance of an option, provided that it is also a cash sale, can be ceded. (Hersh v Nel) * Written acceptance of an oral option is only valid upon receipt regardless of the distance between the parties. (Smeiman v Volkersz) * A provisional option allows either party to withdraw before the due date, whilist an option for a limited time at the descetion of the offeror similarly allows that offeror to withdraw, as state at his discretion. (Gerson v United Tobacco Co.s) Termination of the Offer
* By acceptance- an offer which has been accepted constitutes a contract. That offer is no longer available for acceptance. * By rejection- an offer is rejected if: 1) The offeree notifies the offeror that he does not wish to accept the offer. 2) The offeree attempts to accept the offer but subject to certain...
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