Forming enforceable contracts—offer
Forming enforceable contracts—offer

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Forming enforceable contracts—offer
  • The elements of a legally binding offer
  • Objective definition of 'offer'—an intention to be bound
  • Offeree's state of mind in deciding whether the offeror is bound
  • An offer or an invitation to treat (specific scenarios considered)?
  • Wording not conclusive
  • Auctions
  • Display of goods for sale
  • Advertisements
  • Passenger tickets
  • More...

This Practice Note considers the requirements for a legally binding offer. In so doing, it considers:

  1. what we mean by 'offer'

  2. how to distinguish an offer from an invitation to treat, with relevant common examples

  3. different species of offer, ie offers which are ‘subject to contract’, heads of terms and unilateral contracts

  4. how offers can be terminated

For practical guidance on how an offer can be validly accepted, see Practice Note: Forming contracts—acceptance.

Note: Part 36 settlement offers made under CPR 36 operate outside the general rule of contract law and are governed by the specific regime set out in CPR 36. For guidance on what amounts to a valid Part 36 offer, see Practice Note: Part 36 offers—how to make a valid Part 36 offer.

The elements of a legally binding offer

A legally binding offer has the following elements:

  1. the party making the offer ('the offeror') has the intention, objectively ascertained, that their offer is to become binding once accepted

  2. the party to whom the offer is made ('the offeree') believes the offeror has that intention

Objective definition of 'offer'—an intention to be bound

An offer is ‘an expression of willingness to contract, made with the intention that it shall become binding upon the person making it, as soon as it is accepted by the person to whom it is addressed’ (Air Transworld v Bombardier).

Whether the offer is

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