In order to fully comprehend this statement, we must first establish what constitutes and offer and what constitutes acceptance. “An offer is a statement by one party of willingness to enter into a contract on stated terms, provided that these terms are, in turn, accepted by the party to whom the offer is addressed”. Acceptance is “…an unqualified expression of ascent to the terms proposed by the offeror”. The “Offer and acceptance model” is based on the court’s adopt the “mirror image” rule of contractual formation.
Applying the definitions stated above, we can take this to mean that there must be a clear and unequivocal offer which must be matched by an equally clear and equivocal acceptance. In looking at the comparison between the cases of Gibson v Manchester City Council (1978) and Storer v. Manchester City Council (1974) the “mirror image” is best illustrated. The courts take an objective approach and believe that the outward signs of an intention to be bound, such as in the case of Storer, rather than a subjective approach; Gibson.
It is important that the Offer and acceptance is communicated to the offeree and offeror, respectively. This being said, in order to fully evaluate whether or not the offer and acceptance model is truly flawed, it is important to examine the rationale behind it and the role it plays in regards to both parties. Also, closer look must be paid to what it means “de juro” and what it is “de facto”.
The offer and acceptance model exists for many reasons. However, there are three most important ones that present themselves in most cases which develop.
In the first instance, the model may be used to determine whether or not a contract has come into existence. This is important in cases where the parties dispute whether communications resulted in the formation of a contract. This presents itself in four major cases;
This would help to solve any discrepancies regarding who in fact is the offeror and who is the offeree. This could be illustrated in the case of Carlill v. Carbolic Smoke Ball Co. It can be ascertained that an offer was indeed made by Carbolic Smoke Ball Company to the World at large, given that the general rule states that an advertisement in the newspapers only amounts to an invitation to treat; Partridge v Crittenden. The third factor that arises is the “freedom to contract”.
This deals with individuals, and where applicable corporations, right to contract without the need for a judge to say that there has been an agreement. As mentioned earlier however, although “de juro” which is what we previously established, i. e. that an agreement does not need clarification by the courts, isn’t what is “de facto” Courts have had to intervene in these matters and have had to apply the Objectivity Test in order to determine whether or not an offer has been made and a contract has been formed. This is uttered in the case of Smith v Hughes (1871).
It is in such cases that the courts emphasize that the important this is not the party’s real intention, but how the reasonable man would perceive the situation. Just like anything that is created by man, the model has flaws. The perception of the offer and acceptance module, as depicted above, is said to be rudimentary and artificial. It leaves very little room for the complexities that actually exist in the formation of a contract. In some instances the problem in a contract may now even exist in the area of formation but lies in something deeper, but I digress.
This module allows for a clear fixed offer and acceptance to the terms set out in these instances which, from the cases mentioned, isn’t what happens in reality. Sometimes a contract may be specified in both written and implied terms and the offer and acceptance model doesn’t allow for the flexibility of such conditions. In these circumstances, given the first reason mentioned for the offer and acceptance model, the question arises of whether or not a contract was formed at all and if so, if all the terms discussed, stated or implied, are a part of this.
From the above, it can be said that although the offer and acceptance model provides the framework in which a contract can be formed, it is not by itself a practical method or mold by which a contract may be formed. Lord Denning holds the opinion that “…it is a mistake to think that all contracts can be analyzed into the form of offer and acceptance…” He gives his support of the statement above and echoes these sentiments in the case of Butler v. Ex-Cell-O Corporation (England) Ltd (1979).
He believes that the “…better way is to look at all the documents passing between the parties and glean from them or from the conduct of the parties, whether they have reached agreement on all material points, even though there may be differences between the forms and conditions printed on the back of them…” This conflicts with the mirror image outlined in the offer and acceptance model because it adopts a two stage approach to the formation of a contract.
It asks two simple questions;
It is in this instance that the courts have the discretion of “filling in the blanks”. Just like everything that is manmade, however, there are criticisms attached such as the fact that it leaves room for many speculations to be made given the fact that there are no clear outlines to the courts or legal advisors as to whether or not an agreement has been made.
It does however, unlike the offer and acceptance model, allow for flexibility within the framework. This creates the issue of inconsistencies within the law of contract and “lack of consensus” within the law of contract. The approach of only an acceptance of a contract seems, in essence, to be a practicable approach to the formation of a contract. However, because it allows of ambiguities within the final terms of a contract and the chances for inconsistencies makes it an unstable model.
Although we showed before where the objective test could be used to promote certainty regarding this approach, persons are still bent on using the more traditional method, i. e. the offer and acceptance model, or some close form of it. The rules laid out in the offer and acceptance model of the “mirror image” seems to be the more practical of the two approaches. It allows for uniformity and makes it easier to identify the terms expressed and agreed upon rather than just an agreement which allows for uncertainties.
As with everything else, the model does possess flaws, which in itself give it its strength, but is by no mean flawed in its entirety. If it weren’t for such a rigid system regarding the formation of a contract there would be a wide field for persons to make wild speculations of the terms within a contract based on what was implied and discussed, rather than what bother parties believe was decided upon.
There may be instances in which an agreement only may be the more practical approach, such as in the case of Butler v. Ex-Cell-O Corporation and instances in which a more rigid approach may need to be adopted, Storer v Manchester City Council. In most societies, a more flexible approach is appreciated and welcomed, but even the most flexible systems have a rigid approach to certain things. In this instance, it’s a case of applicability and which approach would provide the best outcome, which would be seen to be fair and unbiased. Indeed, the offer and acceptance model is flawed, but having the only necessity be an agreement holds its imperfections as well.
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