A valid contract will be deemed to exist when the following elements are present:
- Offer - this is also known as a proposal, a necessary element for the formation of an agreement. The requirements of offer is stated in Section 2(a) Contracts Act -...where one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to the act or abstinence, is said to make a proposal'. (the key elements have been highlighted and underlined)
jurisdiction as Offeror). A proposal is capable of being an agreement only when it is accepted by the
person to whom it is addressed.
Some requirements of a proposal:
- definite promise
- there is intention to be bound when accepted
- acceptance does not vary any terms of the initial proposal
- Will be complete when it comes to the knowledge of the person to whom it is made (S4(1) CA 1950)
- Could be expressly made i.e. written or oral
- Impliedly through conduct
- An advertisement is not deemed to be an offer but rather an attempt to induce the other party to make an offer. This rule is such for business convenience.(Coelho v The Public Services Commission & Guha Majumder v Donough). In determining whether it is an offer or invitation to make an offer is dependant on the intention of the parties. Nevertheless, the courts have often recognised bi-lateral (two parties) advertisements are considered to be invitation to make offers whereas uni-lateral (world at large advertisements as was considered in Carlill v Carbolic Smoke Ball) are considered to be offers.
- Display of products, tenders and auctions are also considered to be an invitation to make offer rather than making the proposal. The case that best illustrates on display of products / goods would be Pharmaceutical Society of GB V Boots Cash Chemist Ltd.
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