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TLAW 101 – Business Law Solved

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Relevant Law

The law of contract establishes the relationship between two parties. To prove any contractual relationship to be valid, the main contractual essentials are: (The Law Handbook 2016)

An offer – An offeror initiates an offer through which he transfers his wishes of any act or omission to an offeree with a hope that such an offer will be approved (Smith v Hughes (1871). An offer is valid when it is communicated by an offeror and comes within the notion of an offeree. (Moles R 1998)

An acceptance – The offeree when approves the offer made to him, then, such approval is called acceptance (Crown v Clarke (1927). It is only when the acceptance made by the offeree reaches the notion of the offeror, then, the acceptance is said to be complete and valid (Powell v Lee (1908). Any acceptance made without knowledge of acceptance is invalid in law. 

Further, when the person does not make any kind of offer but acts in order to receive offers, such as by advertisements, tenders, auctions, etc, then it is called invitation to offers where the person making the invitation is an offeree who receives the offer made by the public (offeror) (Partridge v Crittenden (1968)). 

Also, an offer can be unilateral, where promises are made by one party and the same is accepted by another by conduct. Whereas, in bilateral contracts, both the parties exchange promises to make a binding contract ((Australian Woollen Mills Pty Ltd v The Commonwealth (1954). 

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