Offer and Acceptance

Basic Principles: pp 51 - 61

Basis of a Contract
Agreement on the terms: meeting of the minds (consensus ad idem) Another ground: reasonable reliance
Cf. Standard form contracts with banks

How do courts determine existence of a contract?

Offer and acceptance

Requirements for a valid offer

Offer must be complete, clear and unambiguous
Offer must contain all material terms Eg. Sale: price and subject matter required

Offer made with intention of creating legally binding obligations

The following are not considered binding proposals:
Offers made in jest Social arrangements

Gentlemens agreements
Most advertisements

Whether an offer is one of the above is a question of fact determine from circumstances

Advertisements
Does an ad constitute an offer?
Crawley v Rex 1909 TS 1105 Pharmaceutical Society of Great Britain v Boots Cash Chemists [1952] 2 All ER 456

What about an offer for reward?

Offer must still be valid at time of acceptance

An offer ceases to exist when it has been rejected, revoked or has lapsed. Rejection may be outright or coupled with counter-offer

Offeror may revoke his offer until he learns of acceptance.

Odendaal v Norbert 1973 (2) SA 749 (R)

Offer must still be valid

Offer will lapse if not accepted timeously. Offer will expire:
At a time stipulated in the contract, or After a reasonable time Dietrichsen v Dietrichsen 1911 TPD 486

Requirements for a valid acceptance

Acceptance by person to whom offer addressed
If offer addressed to a particular person, may only be accepted by him Bird v Summerville 1961 (3) SA 194 (A) Offers may be addressed to more than one person, or to a category of persons:
Eg. X, his nominee, trustee or executor

Offers for reward are addressed to public, but may only be accepted once.

Acceptance must be made deliberately/ consciously

Offeree must know of offer when accepting:
Bloom v American Swiss Watch Co 1915 AD 100

Acceptance must be clear, unambiguous and unconditional

Van Jaarsveld v Ackermann 1975 (2) SA 753 (A) A conditional acceptance is not an acceptance, but a rejection + counter offer Can silence constitute acceptance?
Silence and something more required: positive conduct indicating intention to be bound. Past conduct may make silence = acceptance

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Terms of Acceptance must correspond with terms of offer

Referred to as the mirror-image rule Any variation = rejection + counter offer Distinguish: partial acceptance

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Acceptance must have been communicated to offeror

General rule: acceptance only valid once offeror learns of it
The information theory of acceptance

3 exceptions to this rule:

a) Offeror has expressly/ impliedly dispensed with need for explicit prior acceptance. Orders placed for goods

Postal delivery of acceptance authorised

Telephone, fax and email acceptances

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Exceptions to general rule contd

b) Offeror instructs that acceptance be made at a particular place in a particular manner.
Acceptance valid if offeree follows instruction, even if not received by offeror

c)

Date for acceptance given, but not place or manner:

Acceptance valid if delivered to last known address of offeror.

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Options
An agreement to keep an offer open for a certain period of time.
Within time given the offer is irrevocable

Consists of 2 offers:
Main offer Offer to keep main offer open

If right of option is cedable, it may be sold:

Gives rise to futures market
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Rights of first refusal

Referred to as a pre-emption agreement If grantor should ever want to sell the property, he must first offer to grantee before he can sell to a third party.

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Online Contracting
Governed by the Electronic Communications and Transactions Act 25 of 2002 (the ECT Act) Contracts may now be concluded over the internet Where signature is required by law, an advanced electronic signature must be used.

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Online contracting contd

An agreement concluded by data messages is concluded at time and place where acceptance of offer was received by offeror
The reception theory of acceptance

This rule may be varied by agreement

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Online contracting: consumer protection

Onerous conditions placed on supplier of goods over the internet.
The ECT Act lists info which must be supplied (see Basic Principles at p 427) If the supplier does not comply with these disclosure requirements, buyer may cancel contract within 14 days of receipt of goods.

Cooling off period applies: buyer may cancel contract without reason within 7 days of receiving goods.
Does not apply to all products, eg. fresh produce.
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Consumer protection contd

Spam:
Allowed, provided there is an opportunity to unsubscribe. May inquire how they got your details

No one may exclude consumer protection provisions by contract.

Complaint may be made to Consumer Affairs Committee

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