ABSTRACT
In order for a contract to come into existence as a legally recognised agreement, certain requirements need to be satisfied. A contract is formed when one party (the offeror) makes an offer to another party (the offeree) which that party accepts. This represents the consensus element of a contract, for which English law applies an objective test in determining whether or not a contract exists. The person making the offer must intend to be bound without further negotiation. The offer must be clear, complete and final, and it must be communicated to the offeree. An offer is to be distinguished from an invitation to treat, such as advertisements and shop displays. An invitation to treat is something which is inviting an offer to be made; it is not an offer itself. The offer and the acceptance of the offer must correspond, that is, the acceptance of the offer must be unqualified and unconditional. If the acceptance purports to introduce terms not comprised in the offer, it becomes a counter offer and will not be valid as an acceptance, but an inquiry as to whether the offeror will modify his terms does not necessarily amount to a counter offer. In addition to the existence of a counter offer bringing an offer to an end, an offer will come to an end on rejection of the offer by the offeree or where it has been withdrawn by the offeror before it has been accepted. An offer will also come to an end where it has lapsed. Lapse of an offer will occur where a time limit which has been put upon the offer has expired, or where there has been too long a delay between the offer being made and a purported acceptance of it, or on the death of either party. In respect of acceptance, this must be communicated to the offeror either by words or by conduct; silence does not constitute acceptance. However, actual communication of acceptance to the offeror is not necessary in some instances, for example, where the postal rule applies. Under the postal rule, where an offer is made by letter or telegram, the acceptance of that offer is completed when the letter of acceptance is posted, or the telegram of acceptance handed in. However, the postal rule will not apply where the offeror stipulates a method by which acceptance is to be communicated, or it is unreasonable in the circumstances for the postal rule to apply, or the correspondence is addressed incorrectly or posted improperly.
