Contract Law - the Rules of Offer and Acceptance Case Study

Contract Law - the Rules of Offer and Acceptance - Case Study Example According to Chen-Wishart, a contract is a â€Å"promise (or agreement) which is enforced (recognized by the law†. Bhana, Bonthuys, and Nortje state that â€Å"Contracts are agreements between parties who have the intention to create legal rights and duties between them and which are legally binding upon the parties.†   Therefore, in order for a contract to exist it is necessary for the involved parties to have the intention to enter into contractual relations with the other party and express that intention in a legal manner.   A contract consists of the following elements: An Offer; an Acceptance in strict compliance with the terms of the offer; Legal Purpose/Objective; Mutuality of Obligation – also known as the â€Å"meeting of the minds†; Consideration and Competent Parties. Considering the case under analysis, the author shall focus on the first two elements: offer and acceptance. - â€Å"The first requisite of any contract is an agreement.†   An agreement is formed of offer and acceptance. Therefore, in order for the parties to reach an agreement, there must be an offer and acceptance. - â€Å"An offer is an undertaking by the offeror made with the intention that it will bind the offeror as soon as it is accepted by the offeree (the person to whom it is addressed†Ã‚   The binding force of an offer in case of its acceptance is confirmed by the definitions given by other authors, such as Bhana, Bonthuys and Nortje (2009, 25), who specify that a valid offer is â€Å"an invitation by one party to create obligations with another party, which obligations will become legally binding upon the acceptance by the other party†. An offer can be made whether orally, in writing or by conduct. An offer contains the following: - â€Å"a proposal of the terms of the exchange; - an intimation of willingness to be bound as soon as the offeree manifests acceptance. An offer puts the offeror on risk: it confers a power on the offeree to bind the offeror at the precise moment of acceptance; thereafter, the offeror loses his ability to withdraw from or further negotiate the arrangement.†