Human social interactions are filled with agreements between individuals. We agree to cooperate, get married, volunteer, work, exchange valuables on the basis of an agreement. We thus rely on agreements both socially and legally to ensure our advancement as a species. Often, agreements are the source of misunderstandings, strifes, and wars, and, consequently societies have to find ways to ensure agreements are entered into and enforced for the benefit of all parties and society in general. This blog sets out to establish the legal basis for agreements and what is considered an enforceable agreement as opposed to a mere puff.
As alluded to, agreements are made in many social interactions. Many such interactions lack the necessary intention to be legally enforceable. For example, an agreement by a mother to buy her son a toy car for his good behaviour during a church service is clearly not intended to be legally enforceable. The child can protest that he deserves the toy car because he had behaved well but can hardly take his mother to court because of that. This gives rise to the rebuttable presumption that all agreements made in a domestic setting such as between parents and children, husband and wife lack the needed intention to be legally enforceable.
On the other hand, a similar reputable presumption is that an agreement in a commercial context has the needed intention to be enforceable. Intention is therefore the first element that has to be identified to conclude that an enforceable agreement has been concluded. Once this is established, the three elements of a contract have to be identified.
Taken from its English meaning, an offer is making something of value available to someone to which he or she can accept or reject. Let's have lunch or a three-day vacation to the Caribbean are offers, the first only requiring you to be present at a specific place whilst the latter might have hidden terms and conditions which you have to be aware of before accepting the offer. The offer might seem to be the simplest concept to understand but not everything that seems to be an offer is, in fact, an offer. The offer should be very specific about what is being offered and to whom under what conditions. For example, my Nissan 3 litter van for $ 10 000 to the first person that calls this number. This clarity separates advertisements where a pair of shoes is offered to the general public and a simple intention to discuss from an offer.
It is also important to note who is making the offer. A pair of blue jeans in the shop with a price tag might appear to be an offer but legally it is simply an invitation to treat. The offer is made when the client takes the pair of blue jeans to the cash-out point and offers the required funds for its acquisition. The client thus becomes the offeror in this case.
The final point to consider when the offer is made is that the offer must precede acceptance, technically. So, no agreement is reached when the child demands payment for last week’s work in the garden because the father never promised to pay him for that. It is required that the father first promises to pay if the child works in the garden before the child works in the garden.
Once the offer is made, it has to be accepted in the way and form the offer has been made. If the acceptance comes with additional requirements or alterations to the offer, then the offer is nullified and, in fact, the acceptance becomes a new offer. The offer and acceptance must be mirror images of each other and no further clarification should be needed after its acceptance. This does not mean all the essential terms have to be accepted since terms that exist in a law or industry standards can be inferred to complete the contract, for eg. payment within thirty days is implied for a commercial transaction.
Acceptance must be communicated either in words or by deeds, for eg. performing the gardening function or occupying the building but it is not always critical for acceptance to be communicated and silence may be construed as acceptance if the terms are reasonable and not derived from unreasonable ultimatums such as I will consider the deal concluded if you don’t put your hand up in the next 5 seconds. Thus, not accepting an offer must sometimes be clearly communicated as much as acceptance should be communicated.
People often enter into agreements and contracts for the purpose of gaining something of value for themselves. To do this, one has to forego something of value such as time, money or energy. Consideration is simply whatever is foregone to obtain a promise of a commercial benefit. In the work environment, the employee foregoes his or her time, effort and knowledge to obtain the promise of a paycheck on a specific date.
Whatever is foregone should be considered by law as something of commercial or economic value. These include time, money, effort, and others but exclude intangibles such as the promise to love the offeree forever or good behavior in the example of the child and mother above. In some cases, a practical benefit may be considered good consideration, as for example, where because of time constraints, the contractor requests a higher fee to employ more staff to meet the deadline. This should not be construed as duress in which the contractor forces the contracting party to pay more purely because he or she has no other choice.
This blog brings together all the essential elements required for an agreement to be enforceable, namely intention, offer, acceptance and consideration. As agreements are common in every day interactions, it is important to understand what makes an agreement legally enforceable to avoid conflict and strife that often arise from social contracts.
Scottish Qualifications Authority, UK
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