Without it, an agreement is null and void. However, consideration needs to satisfy some parameters to be considered valid — it should not involve illegal or fraudulent activities, such as causing damage to a person or property. Moreover, it should be offered at the desire of the promisor. It can also come from a third party. Before a contract is drawn up, an offer is placed by one party to another. Offer is a promise to perform or abstain from an act at the desire of the other party in exchange for consideration.
It should also contain a statement that communicates intent to enter into a contract. The party that makes an offer is known as the offeror, and the individual who accepts it is known as an offeree.
An offer can be categorised into two types — unilateral and bilateral. Unilateral — It is a type of offer that is made to the general public at large. This type of offer includes only the promisor who makes an open offer which anybody can enter into. For instance, advertisements can be considered unilateral offers. Display of goods by a vendor can also be a unilateral offer as any individual can choose to buy a product or service from a shopkeeper which results in a contract.
In this case, the offeror does not wait for communication of acceptance. Bilateral — An offer which is made to a specific individual or a group of individuals is called bilateral. In this type of offer, acceptance must be communicated, and all parties involved promise to provide some consideration to others.
Communication of Offer Acceptance and Revocation. The offer is then translated into an agreement or enforceable contract when it is accepted. The offer can take several forms:. The key point is that an offer must express the thing the person making the offer is prepared to commit to when making the deals. When it falls to the court to make a decision on a problematic contract, the court may consider how a reasonable person would see the situation rather than the intent of the involved parties.
Common sense is the basis for this because it's expected that neither party would want to be held liable for damages by breaching his or her side of the agreement. A contract comes into existence, then, when an offer has been made and the second party has accepted it by either express or implied consent.
Written offers don't have to be accepted in writing. Written offers can also be accepted verbally in most cases. The only time a verbal acceptance is not acceptable is when there are circumstances in play that let both parties to the deal know that the contract is expected to be accepted in writing.
An invitation to treat is different from an offer because it only shows a person's potential willingness to negotiate a contract. A property owner indicating the willingness to sell at a specific price is considered an example of an invitation to treat.
Public auctions and items displayed on store shelves are also considered invitations to treat rather than offers. The communication of a proposal is complete when it becomes to the knowledge of the person to whom it is made. The communication of an acceptance is complete-. The communication of a revocation is complete-. The communication of the proposal is complete when B receives the letter. The communication of the acceptance is complete. The revocation is complete as against A when the telegram is dispatched.
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