A promise or set of promises that the law will enforce

According to Sir William Anson, a “contract is an agreement enforceable by law made between two or more persons by which rights are acquired by one or more to acts or forbearances on the part of the other or others". According to Leake, it is “an agreement as the source of legal contract imparts that one party shall be bound to some performance, which the other shall have a legal right to enforce". Also according to Sir Fredric Pollock thinks “every agreement and promise enforceable by law is a contract". (Dr. Ashlok Sharma, Latest Edition 2010-11)

A person who makes an offer is known as an offeror. A person to whom an offer is made is known as an offeree. An offer is made when an offeror proposes a set of terms to an offeree, with the intention that if the proposed terms are accepted they will create a binding contract between the two parties. By accepting the terms proposed, the offeree would also agree to become legally bound by them. This acceptance would therefore form a contract. As a contract is a legally binding agreement, neither an offer nor an acceptance should be made without a willingness to accept the legal consequences. Neither the offer nor the acceptance needs to be made in writing or even in words. (Philip Robinson; Business Law & Ethics page 25/26). Offer is a final declaration of a person’s willingness to be bound, once accepted an offer becomes legally binding. An offer may be made to a specific person or to any member of a group of persons. In this case, the offer was a unilateral offer to the world at large.

Acceptance of an offer means unrestricted union to all the terms of that offer. Acceptance will often be oral in writing, but in some cases an offeree may accept an offer by doing something, such as delivering goods in retort to an offer to buy. It is a final and unqualified assents to all the terms of offer for acceptance to take place, when it is received by the offeror (Adams vs. Lindsell). There can be no acceptance, and therefore no agreement, unless there was an offer in the first place. An offer exists whenever the objective inference from the offeror’s words or conduct is that she intends to commit herself legally, without further negotiation, to the terms she is proposing if the offeree says “Yes" (Furmston 2001).

Does a valid contract exist between Isabel and Relax Company Ltd? It could be argued that there was no valid contract between Isabel and the company owing to the fact that she saw the initial offer and the withdrawal of the offer and went ahead and still made a request. According to the law of offer and acceptance, an offer can be revoked, provided it takes place before acceptance. {Dickson vs Dodds (1876) 2.ch.d.463} or a counter offer is made, lapse of time. However, a valid contract cannot take place because the offer was withdrawn before she sent her fax on the 11th of January.

Amy had no valid contract with Relax company in as much as she did not know about the withdrawal of the original offer, unfortunately she was in lapse of time. The general rule for acceptance is that acceptance must be communicated to the offeror by the offeree or a person with the authority to accept. Unless the acceptance is communicated, no contract comes into existence. Acceptance would only take place, when it is received by the offeror or a person with authority to do so. (Powell vs Lee).

Postal rule is a rule of contract law that makes an exception to the general rule that an acceptance is only created when communicated directly to the offeror (Duhaime). If the post office loses or delays the acceptance letter, there is still a binding contract. The rule was summarised in a 1892 case Henthorn v. Fraser as follows “Where the circumstances are such that it must have been within the contemplation of the parties that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of an offer, the acceptance is complete as soon as it is posted". (Duhaime 2007). When the parties communicate by letter, the interval of time between the posting of a letter and its receipt by the addressee and the possibility of a letter being delayed in the post or lost altogether gives rise to problems. Although maintaining the general principle that a letter is effective only if and when it arrives, in all other cases, the courts departed from this principle in the case of letters (or telegrams) of acceptance (Furmston 2001). Exception to this rule is the postal rule in Adams vs. Lindsell, i.e. if you accept a rule by post, the acceptance takes effect the moment the letter is posted into the postal box. This rule would not apply if it was not stated in the terms of the contract. The letter also has to be addressed properly. In this case between Amy and the company, even if the contract was to take place, due to the fact that she did not address the letter properly and the letter even arrived on the 17th, lapse of time. So therefore, there is no binding contract between her and the company.

It could be argued that there was no valid contract between Chris and the company owning to the fact that the fax was sent at 6pm and office hours is 9am to 5pm, so there cannot be a valid contract due to the fact of the lapse of time and the mail was read the next day after the company’s director had withdrawn the offer and lapse of time can revoke a contract (Brinkibon Ltd vs. Stahag Stahl).