Contract Law Module: Lesson 1 - Offer

Definition of an Offer

• An offer is an expression by one party (offeror) to agree to specific terms if the other party (offeree) also agrees.
• An offer anticipates mutual acceptance of the terms by both parties.
• Essential elements of an offer:
  • Must have exclusive terms necessary for forming an agreement.
  • Must be an outward expression by the offeror to the offeree.
  • Must be viewed objectively, assessing what the offeror says and does.

Advertisements and Offers

• Question: Is an advertisement to sell goods or display with a price tag an offer?
• Case: Pharmaceutical Societies of Great Britain v. Boots Cash Chemists
  • Boots' display of items with prices was deemed an invitation to offer.
  • Sale occurs at the cashier's area where the customer makes an offer, accepted by the cashier.
  • The court ruled that advertisements are invitations, not offers, allowing customers to change their minds.

Intention to Contract

• Determining if a party intended to contract relies on objective criteria, not subjective intentions.
• Case: Storer v. Manchester City Council
  • Council's communication was deemed to form a contract despite their claim of lack of intent.
  • Courts focus on actions and words, not claimed intentions.

Types of Contracts

• Bilateral Contracts

  • Mutual promises made in exchange for each other.
  • Both parties have rights and obligations even before performance.

• Unilateral Contracts

  • Involves a promise by one party in exchange for an act.
  • The offeree has no obligation to perform, but if they do, the offeror must fulfill their promise.
  • Example: Offeror promises payment if the offeree mows the lawn by a specified time.

Unilateral Contracts and Offers

• Issues arise when offers are made to the world rather than specific individuals.
• Case: Carlill v. Carbolic Smoke Ball Co.
  • Court recognized that offers to the world, such as rewards, can form valid contracts.
  • Miss Carlill's use of the product constituted acceptance of the offer, resulting in entitlement to the reward.

Conclusion

• Understanding offers is fundamental to contract law.
• Next lesson will cover acceptance of an offer.
• Encourage participation in knowledge check questions and OWL discussion forums.