What is offer in law?

What is offer in law? An offer is defined as a definite proposal or promise made by one party with the intention that it shall become binding on the party making it as soon as it is accepted by the party to whom it is addressed.

Offer is one of the elements of a valid contract. Very often what one party regards as a clear-cut case of offer or acceptance is firmly rejected by the other party who claims that it is something else. Hence, related factors like invitation to treat, counter-offers, cross-offers, conditional acceptances, “provisional agreements, acceptance in ignorance of offer, have all developed together with the study of what constitutes an offer and acceptance respectively.

Example of an offer in contract law

However, there are a few cases in which the courts have made a finding that there is a contract even though it is difficult to analyze the transaction in terms of offer and acceptance. See the case of New Zealand Shipping Company V. M.M. Satterth Waite & Co. Ltd (1974)1ALL E.R 1015 at 1020, reported in England, United Kingdom.

By its very nature, there is no limit to the number of people an offer can be made to. But bear it in mind that a contract comes into existence only between the offeror and the person or persons responding to the offer and accepting it.

This principle, was first declared in the famous English case of Carlill V. Carbolic Smoke Ball Co by Bowen, L.J., (1893)1Queens Bench 256; is now expressed by stating that an offer can be made not only to an individual or a group of persons, but also to the whole world. In that case, the defendants had argued that no contract could arise from advertisement because you cannot make a contract with the whole world. This argument the court rejected by stating as follows:

“it was also said that the contract is made with the whole world-that is, with everybody; and that you cannot contract with every body. It is not a contract made with all the world. That is the fallacy of the argument. It is an offer made to all the world; and why shouldn’t an offer be made to all the world which is to ripen into a contract with anybody who comes forward and performs the condition? It is an offer to become liable to anyone who, before it is retracted, performs the condition, and although the offer is made to the world. The contract is made with that limited portion of the public who come forward and perform the condition on the faith of the advertisement.

See also the land mark judgment of the English Court of Appeal sitting in England, Brogden V. Metropolitan Railway Co. (1877)2 A. C. 666; Nigerian National Supply Company Ltd. (NNSC) V. Agricor Incorporation of USA (1994) 3 NWLR (pt.332)p.339 C.A.

Types of offer in contract

  1. Invitation to Treat
  2. Display of goods in shelves in a shop, supermarkets, self-service shops.
  3. Invitation to tender
  4. Auctions

Counter offer in contract law

An acceptance must correspond with the terms of the offer. Any qualification or amendment of the offer will constitute a counter-offer which destroys (cancels) the original offer.
The purported acceptance thus becomes a fresh offer which is open to the original offeror, now the offeree, to accept or reject.

Thus, in Hyde V. Wrench, the facts of the case were as follow:..
The defendant on June 6 made an offer to sell an estate to the plaintiff for £1,000. On June 8, the plaintiff replied with an offer to buy the estate for £950. This was rejected by the defendant on June 27. On June 29, the plaintiff purported to accept the defendant’s original offer of the estate for £1,000. This was rejected by the defendant and the plaintiff brought an action for specific performance.

It was held that the original offer was no longer open to the plaintiff to accept. By “accepting” to buy estate for £950 instead of the £1,000 for which it was offered, the plaintiff rejected the original offer and was in effect making a counter-offer/ therefore, there was no obligation whatsoever between the parties.

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