Law Beat

Learning the Law Series - Part 2

Offer and Acceptance

Last part you read (and hopefully learned) that a contract was an agreement between 2 or more parties which the parties intend to be binding at law.

In addition, to constitute a contract there must be an offer by one person to another and an acceptance of that offer by the person to whom it is made. The offer and acceptance must be communicated to the other.

Let us look more closely at this definition:

  1. There must be an offer by one person who intends to make an offer. A mere statement of a person's intention of his willingness to enter into negotiations is not an offer and therefore cannot be accepted so as to form a binding contract. For example, where one person says to another person that he is willing to talk about selling his or her car, the other person can't say that he will buy the car and expect that there has been a contract to sell. Besides not having all of the material terms settled upon, there was no intention by the car owner to sell his car without further discussion.

  2. There is a presumption between related persons such as husband and wives, parents and children, etc, that arrangements between them are not intended so as to create binding contractual arrangements. The reason for this obvious. One would not expect that the law would permit young children to be able to sue their parents if parents failed to pay their children their weekly allowances.

  3. Only the person to whom the offer is made can accept an offer. For instance, if a person offers to sell a car to his friend for a price and another person overhearing this offer jumps in to accept, there would not be a contract with the person jumping in.

  4. Offers and acceptances must be communicated to the other. If an offer is made and the person who wants to accept has the intention of doing so but never tells the person making the offer of his acceptance, there is no binding contract.
Test your knowledge with our law quiz. Don't forget to read the previous part in the series since the questions build on what you previously learned.

In Part 3, we will look at the notions of offer and acceptance in a little more detail.

The principles of law presented in these articles are based on Canadian law. However, the information provided by the Fraud Bureau in this Law Beat series is not legal advice nor conveyed in the course of an solicitor/attorney-client relationship, but is intended merely as general information related to common legal issues. Your access to this article is subject to the Terms of Use and Disclaimer. You are not to rely upon this article for the basis of any decision you wish to make. If you have specific legal problem or question, please contract your legal advisor for specific legal advice relating to your question or problem.