UNIT 2

OFFER

An offer is an unequivocal manifestation by one party (the offeror) of a willingness to enter into a contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed (the offeree). This intention must be clear and definite. See the case of Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256 where an advertisement was held to be a unilateral offer because it prescribed an act (using the smoke ball) which, when performed, constituted acceptance and the case of UBA Ltd v Tejumola & Sons Ltd (1988) 2 NWLR (Pt. 79) 662 where a binding contract existed as the offer was clear and accepted. See also section 25 of the Contract Act (1872) which deals with the communication of offers and revocations.

CHARACTERISTICS OF AN OFFER

1. Definiteness: this is where the terms of the offer must be clear and definite.
2. Communication: this is where the offer must be communicated to the offeree.
3. Intention: this is where there must be an intention to be bound by the offer once it is accepted.

TYPES OF OFFERS

1. Bilateral offer: these are offers made to a specific person or group, where acceptance results in a bilateral contract.
2. Unilateral offer: these are offers made to the world at large, where acceptance involves performing the requested act.

TERMINATION OF OFFER

An offer can be terminated in several ways:

1. Revocation: this is where an offer can be withdrawn any time before acceptance, provided the withdrawal is communicated to the offeree.
2. Rejection: this is where an offer is terminated if the offeree rejects it.
3. Counter-offer: this is where a counter-offer terminates the original offer.
4. Lapse of time: this happens if the offer specifies a time limit, it terminates when the time expires.
5. Death or insanity: this is where the death or insanity of the offeror before acceptance terminates the offer.

ACCEPTANCE

Acceptance is an unqualified expression of assent to the terms of an offer. For a contract to be formed, the acceptance must mirror the offer exactly. See the case of Hyde v Wrench (1840) 3 Beav 334 where a counter-offer is a rejection of the original offer and the case of Ajayi v R.T. Briscoe (Nigeria) Ltd (1964) 1 All NLR 44 where acceptance must be communicated to the offeror to be effective. See also section 7 of the Contract Act (1872) which outlines the requirements for valid acceptance.

CHARACTERISTICS OF ACCEPTANCE

1. Unqualified assent: this is where acceptance must be absolute and unconditional.
2. Communication: this is where acceptance must be communicated to the offeror.
3. Method: this is where acceptance must be in the prescribed mode or, if not specified, in a reasonable manner.

RULES OF ACCEPTANCE

1. Mirror image rule: this is where acceptance must be an exact match to the offer.
2. Postal rule: this is where acceptance is deemed effective when posted, not when received. See the case of Adams v Lindsell [1818] 1 B & Ald 681.

CONSIDERATION

Consideration is something of value given by both parties to a contract that induces them to enter into the agreement. It can be a benefit to one party or a detriment to another. See the case of Currie v Misa (1875) LR 10 Ex 153 which defined consideration as a right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other and the case of Nneji v Zakhem Construction (Nig.) Ltd (2006) 12 NWLR (Pt. 994) 297 which upheld the necessity of consideration in contract formation. See also section 2(d) of the Contract Act (1872) which defines consideration.

TYPES OF CONSIDERATION

1. Executed consideration: this is an act in return for a promise.
2. Executory consideration: this is a promise in return for a promise.

RULES GOVERNING CONSIDERATION

1. Must move from the promisee: this is where only a party who has provided consideration can enforce the contract.
2. Need not be adequate: this is where the law does not require consideration to be adequate, but it must be sufficient.
3. Must be legal: this is where consideration must not be illegal or against public policy.

INTENTION TO CREATE LEGAL RELATIONS

For a contract to be legally binding, there must be an intention by the parties to enter into a legally enforceable agreement. This intention is presumed in commercial agreements and usually not presumed in social or domestic agreements. See the case of Balfour v Balfour [1919] 2 KB 571 where the court held that agreements between spouses are generally not intended to be legally binding and the case of Esso Petroleum Ltd v Commissioners of Customs and Excise [1976] 1 WLR 1 where presumption of intention in commercial transactions is discussed.

PRESUMPTIONS OF INTENTIONS

1. Commercial agreements: these agreements are presumed to have the intention to create legal relations.
2. Social and domestic agreements: these agreements are presumed not to have the intention, but this can be rebutted.

TESTS FOR INTENTIONS

1. Objective test: this is where the courts look at whether a reasonable person would conclude that the parties intended to create legal relations.
2. Express terms: this is where there is explicit statements of intent in the agreement.

CONCLUSION

These elements form the core components required for a valid and enforceable contract under Nigerian law. Each element must be clearly established to ensure the parties are bound by their agreement.