An Analysis of Binding Contracts and Offer Termination in Contract Law

This report provides a comprehensive overview of contract law, focusing on the formation of binding contracts and the termination of offers. It begins by defining contract law and the essential elements required for a valid agreement, including offer, acceptance, consideration, intention to be legally bound, and contractual capacity. The report emphasizes the importance of these elements and discusses how they contribute to the creation of a legally binding contract, with examples from case laws. It also highlights the significance of principles such as freedom of contract and fairness. Furthermore, the report explores various methods of offer termination, such as rejection, counteroffer, revocation, lapse of time, death, and illegality, providing a detailed analysis of each scenario and its implications on the contract. By examining these aspects, the report aims to provide a clear understanding of the legal aspects of contract formation and termination.

LAW OF CONTRACT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Identifying whether a binding contract has arisen.......................................................................4
Termination of offer.....................................................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Contract law is defined as promise that is enforceable by law and such agreement
requires that there is mutual assent of two or more persons to make it valid. Also, the present
report is based on the events in which court identifies any law to be binding based on certain
elements that makes it valid. Moreover, study will highlight the particular case law so that
better understanding and insights about the binding contract would be analysed. Also, study
will assess the circumstances under which such kind of the binding contract could be
terminated. Lastly, through understanding the principles of the binding contract better
knowledge would be gained what is legal and what is not through this report.
MAIN BODY
Identifying whether a binding contract has arisen
The contract is the binding agreement among the two parties and the basic principles
that are used for the formation of the contract is either through buy and selling of the services,
product, business , buy intellectual property and much more1. Furthermore, to make the legally
binding contract there are certain elements that needs to be satisfied such as offer, acceptance,
consideration , intention to be legally bound and parties have contractual capacity. Thus, once
such elements exists that there is the legally binding contract. However, there need not be any
vitiating factors such as misrepresentation's and illegality which impair the validity of
formation of binding the contract.
Moreover , the binding contract is made through communication among the two or more
parties that agrees to accept the certain course of action either through signing the contract or
through nodding of the head depending upon the nature and situation of the parties .
Furthermore, there are various principles that needs to be followed so that there is the best
binding contract between the parties. Also, the one of the most important principles is freedom
of contract which means that businesses are free to contract on any term they choose. For
instance Printing and Numerical Registering Co v Sampson was case law where the Numerical
Registering Co sued the Sampson for breaching the patent agreement2 . Also, based on this law
earlier Sampson and other shareholders in the company had made the contract where all the
1
Amiq, Bachrul, and Wahyu Prawesthi.,2021
2 Belikova, Ksenia Michailovna,2019

patents future rights would be sold. Thus, Sampson started using the patent information in his
own business that was later sued. However, the Sampson argued that agreement should be void
and considered it to be contrary. Moreover, principles of binding contract states that parties of
contract have the right to allocate the risks within their contracts and agree on certain aspects
keeping in mind the laws that are working in the country. Moreover, another principles that
needs to be followed within the contract is fairness which means that both the parties needs to
deliver the promises so that there is no breach in the existing contract3. Furthermore, the
contract needs to use the clear words so that their usual fundamental rights are not deprived.
Hence, it can be said that for binding contract to be formed it is very much essential that three
things are duly fulfilled such as the offer, acceptance and consideration. Furthermore, all the
agreements are done through contract in form of documents so that it might be further used for
nay kind of the future references if required.
Also, in certain reports it was mentioned that courts uses the objective test to
determines whether the parties have and agreement or the valid offer. Thus, the intention written
is objectively judged by others . Also, it had been said that binding contract includes various
the basic elements other than the one specified such as the legality, mutually or intentionally,
capacity and much more that are explained as follows:
Offer and acceptance: This is where one of the party present something valuable to
other party that they wish to exchange with. Furthermore, when once the value is been offered
than either it is accepted or declined based on the other party involved4.
Consideration: It is defined as the benefit that is received to both the parties from the
contract which can be either in form so monetary, service , object or anything else that holds the
value.
Mutuality or intention: it is one that states that parties involved in the contract needs
to create the valid and enforceable agreement that is not violating any kind of laws that are made
for the running of the country smoothly
Legality: For binding contract to be valid it is very much required that it does not
contain any kind of unlawful promises of consideration. However, if the same has been done
(unintentionally) than also it is considered as crime
3 Ghani, Salman,2018
4 Li, Ao, Jemin Andrew Choi, and Fan Lon,2020

Capacity: Person that are entering into the contract needs to have the legal capacity to
enter into the contract else it might be violated. Furthermore, the legal ability to do so would
make the contract biding and fulfilled in front of law.
Thus, it can be said that non binding contract is one that fails to include certain elements
of the valid contract and hence it becomes unenforceable. Moreover, non binding contract
consists of all sought of illegal things that breach the legal requirements. Also, the legal
contract apart from proper documents also includes proper date, time and location on where it
has been entered so that proper knowledge of it might be gained for any kind of future
references5. Furthermore, such kind of information in binding contracts helps in avoiding any
kind of future disputes among the party that would otherwise be involved when there is no
proof of the agreement. However, if such kind of agreements occur in (future) than there are
various professional associations available that would help in providing the assistance while
taking some amount of fees. Hence, the binding contract helps in the serving as the guidance of
the relationship of the two parties that are formed in accomplishments of certain objectives
Termination of offer
Offer terminated refer as that when the offeree communicates his rejection to the offeror.
Therefore, the offeree make the counter offer and establish the new offer amounts to rejection of
original offer. There are various ways to terminate the offer with the offeree to the offeror. It is
the events which occur after the offer has been made and which bring it to an end. Offer can be
terminated in the various circumstances such as counter offer by offeree, lapse of time, death and
disabilities of other arty, rejection of offer by offeree, counteroffer buy offeree, etc.
Termination of offer in the contract law is where the offer if terminated by other and its is
the opportunities if reject and accept it. It is known as the termination of offer. In the context of
contract, it offers by the one party and acceptance by the other party in order to form as valid
contract 6. There are some parties which comes under the contract such as offeree and offeror.
The party who makes the offer is known as the offeror. The personal who accepts the offer is
known as the offerer.
5 Hunka, Frantisek, and Steven JH van Kervel, 2018
6 Obasa, Olufemi

The termination of offer is not same as the contract termination. In the contract of
termination offer, contract are not fully settled.
 Revocation of offer: It refers as the offer is withdrawn by the offerer. The offer can
revoked at any time by the other party before the acceptances can take place of offer. The
revocation of offer must be interacted between the two parties or to the offeree before the
acceptance of offer. Revocation is effective, if it is known top the offeree, indirectly or
directly. An offeree may relay o the belief. Moreover, the offeror seek to revocation the
offer, but the offeree accepts that offer before the notice of revoke than a valid contract is
created between the both parties.
 Terminate Offer by rejection: The offeree rejection is an offer end if the offeree acquire
the offer and reject it. Moreover, the offer is rejects by the offeree than that cannot come
back after that and accept the offer. This offer of rejected by offeree, however, if the
offeree changes it minds regarding the offer after the rejecting the offer than offeree can
validly accepts the offer, but it can only applicable when the acceptance gets to the
offeror regarding the offer before the any rejection of offer.
 By Operation of law: In this terminated offer, there is not option death, contract, and
incapabilities of other parties to accept will terminate the offer. There are also not require
to communicate the other party. Only law can terminate the offer in this case if the offer
will become the void contract.
 Lapse of time: In the lapse of time, offer can terminate after the reasonable period. The
reasonable period also depend on the types of contact between the offerer and offeree as
well as time depends on the circumstances of case. For example: if the part to be
purchase and sold is perishable commodities such as food, offer to sell the apple will
terminate more rapidly than an offer to sell the cement. Terminated by counter offer: This offers terminated when the offer is occurred and
after that the additional, term is added to the initial offer. In this termination, additional
term cancels the first offer and then it will become the new offer so, it could be either
rejected and accepted by the offeror.

For example in the case of Ferado Agro consortiums Ltd and general George Innih, case was
stated by court that the constituent of the request for the excess time serves as counter offer
which avoid the first offer7.
Another example of counteroffer, if the accepts the offer in $20000, but the offeree put some
terms by beginning that they should put the new tires on the car than is the conditional
acceptance and hence a counteroffer. Termination of offer by death: the offer can be terminated by the death and disabilities
of the offeree or the offeror. Further more, the offeror has notice and know about the
offerer death and disabilities than the offer is automatic revokes by the offeror.
Nevertheless, if the offer was accepted before know about the death of offeree than the
revocation of offer can be depended on the nature of contract. In the case of mental
incapabilities of offeror that the offer cannot be effective again if the offeree regain its
metal capabilities after revoke contract8.
For example In the case of Morgan vs Bradbury, the court held that the contract of offeree still
continues after the death of offeror.
 Terminated offer by Illegality: The offer can be terminated if the subject of offer is
becomes illegals of the product or activity is illegal than the offer can be accepted and
rejected, the subject matter of offer can be become the illegal will deflect the contract.
The law can also terminate the law in the offer Is become the illegal than the contract will
be void contract9. The subject of offer is also spoilt preceding to acceptance that the law
constitutes also terminate the offer as well. In other words, the court will not enforce the
offer of an illegal contracts.
 By acceptance: If the offer was accepted by offeree that the contract is formed the offer
to an end. It can be conduct the implication of conduct, by writing and it can either be
orally when it received by the offeror. It is known as terminate offer by acceptance.
Communicate between the both parties must be clear and the obligation mus be not
imposes by other party.
7 Khorsandian, Mohammad Ali
8 Brödermann, Eckart J
9 Probokusumo, Dhea Dillah

CONCLUSION
As the conclusion, the law of contract is agreement which are recognized and enforce by
the law. There are required the three basic elements to create the legal contract such as
acceptance, offer and consideration it means the exchange of something of values. The report
discussed the binding contract in the law of contract with the oral and written by one party to
fulfil the obligation. In the conclusion, The report also elaborated the termination of offer by the
acceptance, rejection, illegally, operation of law, revoke, by death, by counteroffer and lapse of
time.

REFERENCES
Books and Journals
Amiq, Bachrul, and Wahyu Prawesthi. "Standard Contract Based on the Legal Positivist
Paradigm of Study." In International Conference on Environmental and Energy Policy
(ICEEP 2021), pp. 255-258. Atlantis Press, 2021.
Belikova, Ksenia Michailovna. "Evolution of basic doctrines and principles of contract law in
Europe." Amazonia Investiga 8, no. 22 (2019): 173-182.
Brödermann, Eckart J. "Article 2.1. 5 (Rejection of offer)." In Commercial Law, pp. 503-503.
Nomos Verlagsgesellschaft mbH & Co. KG, 2018.
Ghani, Salman. "An Analysis of the Ijaarah Muntahiyyah Bittamleek Contract." American
Journal of Humanities & Islamic Studies Vol 1 (2018): 1.
Hunka, Frantisek, and Steven JH van Kervel. "Contract Modeling Utilizing DEMO Co-creation
Co-production Model." In VMBO, pp. 37-45. 2018.
Khorsandian, Mohammad Ali. "A Comparative Perspective of Offer and Acceptance in Islamic
and Iranian Law and Modern Private Law." Comparative Study on Islamic & Western
Law 5, no. 1 (2018): 81-118.
Li, Ao, Jemin Andrew Choi, and Fan Long. "Securing smart contract with runtime validation."
In Proceedings of the 41st ACM SIGPLAN Conference on Programming Language Design
and Implementation, pp. 438-453. 2020.
Obasa, Olufemi. "Pension Management, Risks and Investment Strategies: A Study of Defined
Contributory Pension Scheme in Nigeria." Journal of Management and Social
Sciences 11, no. 1 (2022).
Probokusumo, Dhea Dillah. "One-Sided Termination of Employment (Case Study on Industrial
Relationship Decisions Number 170/Pdt. Sus-Phi/2020/Pn. Jkt. Pst)." In 3rd
Tarumanagara International Conference on the Applications of Social Sciences and
Humanities (TICASH 2021), pp. 591-596. Atlantis Press, 2022.