The Process of Contract Formation Explaining the Methods by Which the Courts Decides Whether or Not the Parties Have Reached an Agreement.
The process of contract formation explaining the methods by which the courts decides whether or not the parties have reached an agreement.
INTRODUCTION
To establish whether the parties have formed a contract, the courts begin from examining the elements of offer, acceptance, whether or not there was a consideration or the bargain and the contractual intent to make a binding contract and any other external positive factors. The coincidence of offer and corresponding acceptance results in a contract. In some instances contracts are inferred from the conduct of the parties without a direct offer and a corresponding acceptance. Hence the courts further tries to see if the minds of the offeror and the offeree had actually met (the principle of consensus ad idem) for the contract to be formed.
CONTRACT FORMATION
For a contract to be formed there must be an offer from an offeror and a corresponding acceptance by an offeree. An offer was defined in NTHC Limited v Antwi as “an indication in words or by conduct by an offeror that he or she is prepared to be bound by a contract in the terms expressed in the offer if the offeree communicates to the offeror his or her acceptance of those terms”.
It can be inferred from the above that for an offer to be valid, it must assume the following characteristics;
A. The offer must be clear and not ambiguous and its understanding should be simple.
B. It must be definite
C. It must be final
D. And it must not leave any room significant changes in the terms or further negotiations.
An offer however can be made to an individual and only that individual or his legal representative can respond to the offer. As seen in Boulton v Jones, another person cannot accept an offer not made to him or her.
An offer can be addresses to a group and only that group may accept it. Here again an offer can be made to the whole world or the world at large or to an infinite audience. This is the case in Carlil v Carbolic Smock Ball Company, the
INTRODUCTION
To establish whether the parties have formed a contract, the courts begin from examining the elements of offer, acceptance, whether or not there was a consideration or the bargain and the contractual intent to make a binding contract and any other external positive factors. The coincidence of offer and corresponding acceptance results in a contract. In some instances contracts are inferred from the conduct of the parties without a direct offer and a corresponding acceptance. Hence the courts further tries to see if the minds of the offeror and the offeree had actually met (the principle of consensus ad idem) for the contract to be formed.
CONTRACT FORMATION
For a contract to be formed there must be an offer from an offeror and a corresponding acceptance by an offeree. An offer was defined in NTHC Limited v Antwi as “an indication in words or by conduct by an offeror that he or she is prepared to be bound by a contract in the terms expressed in the offer if the offeree communicates to the offeror his or her acceptance of those terms”.
It can be inferred from the above that for an offer to be valid, it must assume the following characteristics;
A. The offer must be clear and not ambiguous and its understanding should be simple.
B. It must be definite
C. It must be final
D. And it must not leave any room significant changes in the terms or further negotiations.
An offer however can be made to an individual and only that individual or his legal representative can respond to the offer. As seen in Boulton v Jones, another person cannot accept an offer not made to him or her.
An offer can be addresses to a group and only that group may accept it. Here again an offer can be made to the whole world or the world at large or to an infinite audience. This is the case in Carlil v Carbolic Smock Ball Company, the