Consensus ad idem: The Meeting of the Minds

Question One:
The issue in this case scenario concerns whether there exists a valid agreement between
Elaine and Fran after various stages of negotiations. The question further extends to whether
Elaine can take the silence by Fran after 5 pm as acceptance of the new terms.
For there to exist a valid agreement between two parties, consensus ad idem, the ‘meeting of
the minds’ must be established. This is shown from the existence of a valid offer and the
acceptance of an offer. For an offer to be considered valid, it must be specific and definite, so
that the party intended to accept understands it completely (Elliot and Quinn, 2017).
Acceptance, on the other hand, must be unequivocal, unconditional and must be intimated to
the offeror for it to be considered valid (Ali, 2020).
The original offer was made by Elaine for $10.00. When Fran asked for $15.00 instead, this
amounted to a counter-offer. Counter-offers operate as a rejection of the original offer, as was
held in Hyde v Wrench (Hyde v Wrench, 1840). At this point, the offer now stood at
$15.00. Elaine made a counter offer of $12.00. This was the offer in operation at that
moment. After further negotiations, the last offer as made by Elaine, stood at $13.00 per hour
and use of her products. Elaine further stated that if there was no further statement from Fran,
she would consider this as acceptance. The rule as established in Felthouse v Bindley
(Felthouse v Bindley , 1862) is that silence cannot amount to acceptance. One can
therefore not impose on another party the obligation to accept an offer. Further, as stated
above, acceptance must be intimated to the offeror by the offeree. This acceptance can be
implied, for example, by Fran coming to work. The acceptance can also be an express
statement to Elaine. This did not happen.
For these reasons, the offer was not accepted by Fran and therefore, no valid agreement
existed between the two parties.

Question Two:
Did Richard and his father make an arrangement that was intended to give rise to a legally
binding agreement?
It is a well settled principle of law that an agreement is not binding if the intention of the two
parties to be bound by the agreement is not apparent. Before the Ermogenous approach to the
use of presumptions, the presence of intention followed a subjective test. The presumption
was that all commercial transactions are considered to have the requisite intention while
every domestic arrangement does not. However, as per Ermogenous v Greek Orthodox
Community of SA Inc (Ermogenous v Greek Orthodox Community of SA Inc, 2002),
the test should be objective in nature. The question of intention can be determined by
considering the situation at hand, that is, the relationship between the parties (Gibson,
2018). The party that alleges the existence of this intention bears the onus of proving it.
Professor John McCamus explained that, “commercial arrangements between family
members may obviously be intended to create enforceable agreements,” (McCamus,
2005). This means that it is possible for domestic arrangement to have intention to create
legally binding agreements.
A legally binding agreement is one which the courts can be expected to enforce. For a
contract to be valid, this element must be present. There are circumstances in which this
intention is evident from the facts as it was expressly stated, or perhaps, the agreement was in
writing. However, when this is not apparent, especially in the non-commercial setting, an
objective test must be adopted, in which the question of intention can be determined by
considering the relationship the parties have. As stated in Ermogenous, Richard would have
the onus of proving, upon the preponderance of probabilities, that the agreement had the