What is the difference between Offer and Acceptance? Offer and Acceptance are two popular terminologies used in the law of contract. They are among the necessary elements for a valid contract in law and that is why it is imperative to understand their differences. In this short article, we will be taking a critical look at the meaning and differences between Offer and Acceptance.
If you are a lawyer or law student who is interested in understanding the law of contract, it is important to pay attention to every information shared in this article. Trust me, you will grasp a thing or two after reading.
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Table of Content
Meaning of a contract
A contract is an agreement between people which establishes an obligation to do an act. It might also be negative as it covers agreement to make omissions.
It can also be described as an agreement that is binding in law and enforceable in case of a breach, being one made by parties who are competent in that they fulfil the requirements of the law with regard to criteria like age, mental capacity and the likes. The agreement might be verbal or written, that is, it may or not be reduced into writting but the latter is most preffered in case of a breach by one party.
A contract may be formal (complying with all the solemnities of offer, acceptance, consideration and writting which makes it enforceable) or informal (usually inferred from the course of dealing of both parties, that is, previous transactions between both).
It is noteworthy to state at this juncture that parole evidence (oral testimony) is not acceptable with regard to contracts reduced into writting otherwise called a formal contract.
The legal implication of this is that, the documents used in such contract is regarded as the best proof of the existence of any such agreement and ought to be presented before the court failure to comply with this requirement is detrimental to the party who seeks to enforce his rights.
Who is an offeror?
An offeror is anyone who makes an undertaken or promise to another person in relation to a certain transaction.
Take for instance, if Mr. Ben informs Mr. Sam that he intends to sell a vox wagen at 4 million naira, to be delivered at Mr. Sam’s premises immediately payment is made, Mr. Ben is an offeror.
Who is an offeree?
An offeree is anyone to whom a promise or undertaken is made. Simply put, he is the person who receives an offer.
Take for example, If Mr. Sam tells Mr. Ben that he accepts to buy a vox wagen at four million naira then Mr. Sam can be said to be an offeree.
Meaning of an offer
The term offer denotes an undertaken by one person called the offeror to do or refrain from doing an act. It may be done orally or in writing. Offers generally preceeds acceptance.
Elements of an offer
There are two elements that constitute a valid offer;
1. Mental element
2. Physical element
The mental element is the intention to enter into a contractual relationship with the offeror. It is the duty of the court to assert from the circumstances of the case whether or not an intention to enter into such contractual relationship actually exist.
Consider this hypothetical case: Mr. Sam makes an offer of credit sale of a G-wagon to Mr. Ben who he infacts believes to be Mr. Benson.
Mr. Ben aware that Mr. Sam would not have made such offer to him if only he knew his true identity as a rogue, quickly accepted the offer and look possession of the G-wagon.
He resold the same to a third party in another town and when he had done so he disappeared into thin air.
In the above scenerio, the court is saddled with the duty of ascertaining the intention of Mr. Sam to determine whether he has the necessary intention of an offeror required by law.
If the offeror simply forms the intention to make an offer without doing any more to make this intention known to the offeree it follows that there can be no acceptance and by extention no contract.
The offeree can not be heard to say that he knows that the offeror intends to make such offer to him nor can the offeror be allowed to contend that he is entitled to damages in grounds that he intended to make an offer to the offeree who has now done an act that is contrary to the terms of their contract.
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Termination of an offer
An offer can be terminated in law. The legal implication of this is that, there will be no valid contract. Below are the ways through which an offer can be terminated:
1. Rejection: When the offeree refuses to accept the terms of the contract.
2. Lapse: When the stipulated time has passed the offeree can no longer accept the contract and if no time is fixed then at the expiration of a reasonable time.
3. Revocation: Revocation is said to occur when the offeror expresses or manifests an intention not to enter into the agreement proposed by him.
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Meaning of an Acceptance
Acceptance naturally follows an offer. It is an assent to the terms of an offer. Acceptance is usually unconditional and will generally lead to the establishment of a legally binding contract.
Elements of acceptance
One important element is the mental element that is the “intention to be bound”.
The offeree must intend to be bound by the terms of the contract. This intention is made known through the second element which is, “the expression of the intention to be bound” this can be inferred from compliance to omit an act which the offeree would have done ordinarily or doing even thought partially an act agreed upon.
Again, it is the last thing that ought to be done by the offeree before a valid contract is birthed.
Formal acceptance is not required i.e one that complies with the solemnities of writing or documentation of any sort as well as signature.
Acceptance can be deduced from the conduct or course of dealing of the parties. In such a case the course of dealing between both parties will be used to ascertain if acceptance has been made.
It is enough if the offeree expresses his assent orally or by conduct for example, doing an act which he would otherwise not do.
It is pertinent to state that, an infant can not be held liable for breach of a contract that involves luxirious things as opposed to necessaries such as notebook, textbooks, schoolbag and the like. In the case of necessaries, the infant will be required by law to pay a reasonable amount.
Differences between Offer and Acceptance
There are two basic differences between Offer and Acceptance. Firstly, offer preceeds acceptance. Acceptance only comes into play when an offer has been made by the offeror. Thus, there can be no acceptance without an offer.
Secondly, offer is an expression of willingness to contract on certain terms with the intention that once it is accepted by the other party to whom it is addressed it will become binding where as acceptance is the final and unqualified expression of assent to the terms of the contract.
By way of conclusion, it is pertinent to note that both Offer and Acceptance are essential requirements for the formation of any valid contract. If the former is terminated there can be no valid acceptance and by extension no contract is formed.
In the absence of any of these two there’s no contract at law. More so, refusal to comply with certain inextinguishable requirements of the law renders the contract void ab initio.
Edeh Samuel Chukwuemeka ChMC, is a Law Student and a Certified Mediator/Conciliator in Nigeria. He is also a Developer with knowledge in HTML, CSS, JS, PHP and React Native. Samuel is bent on changing the legal profession by building Web and Mobile Apps that will make legal research a lot easier.