Forming Contractual Relationships
An Agreement: Parties must be in agreement before a contract can be put in place. The
Agreement takes the form of Offer and Acceptance.
Definition of Offer: A promise to perform specified acts on certain terms.
Certainty of Offer
Only a complete offer can form the basis of a contract.
Invitation to Treat: An expression of willingness to do business.
Legal Analysis of the Retail Purchase
Invitation to Treat
Customer takes item to Cash Register
Offer to purchase at sticker price
Clerk takes payment
Acceptance of offer
Standard form contract: A "take it or leave it" contract, where the customer agrees
to a standard set of terms that favours the other side.
Offeror: The person who makes an offer.
Offeree: The person to whom an offer is made.
Termination of Offer
An offer can be accepted only if it is "alive."
An offer can be terminated or "taken off the table" by any of the following
Revoke: The withdrawal of an offer.
May occur at any time prior to acceptance.
Option Agreement: An agreement where, in exchange for
payment, an offeror is obligated to keep an offer open for a
Context of a Tendering Contract
Tender offers: A group of offers
All apart of Contract A: Guaranteeing their offer
for a specified time.
Contract B: The final contract between the chosen tender
Lapse: The expiration of an offer after a specified or reasonable
May contain a date upon which it expires.
If no expiry is provided, presumed to withstand for a
"reasonable" period of time.
Rejection: The refusal to accept an offer. May only be accepted if the offerer revives the offer by
offering it anew. Thus the risk of rejecting an offer.
Counteroffer: The rejection of one offer and proposal of a new