Civil law

By ‘offer and acceptance’ the court requires to be satisfied that there was an offer made by one party, which was unconditionally accepted by the party to whom the offer was made. At the moment when the offer and acceptance meet, it is said «consensus ad idem». This means that the parties have reached an agreement. An offer may be made orally, in writing or by conduct. An example of an offer made by conduct is where a customer in a supermarket chooses goods and hands them to the cashier, who then accepts the customer’s offer to buy. An offer may be made to a definite person (or group of persons) or to the whole world, i.e. generally. Where an offer is made to one person only, or a group of persons, only that person or that group may accept. Where an offer is made to the whole world, anyone may accept by complying with the terms of the offer.

The intention to create legal relations is fundamental to the whole concept of making a contract since unless the court is satisfied that both parties, whether expressly or impliedly, have agreed that the agreement between them shall have legal consequences, it will not recognize that agreement as a contract. The person who buys a loaf of bread, or takes a short bus ride, may not consciously realize that he, in each instance, is entering into a contract; although if he discovers a piece of string in the loaf, or if the bus driver through his carelessness has an accident in which the passenger is injured, then the person concerned will take a different view of the two agreements. The courts regard such agreements as having the implied consent of the parties that they shall have legal effect, and are thus contracts.

Consideration is the mutual promise to exchange things of value which the parties to a contract obtain under the terms of their agreement. It is the bargain which is made. The court will not examine the actual value in money terms which each party is to get, to see whether or not the exchange is reasonable. Instead it will ensure that each party got what it bargained for under the agreement. The court will not set itself up as an arbiter of value; it will limit itself to seeing that the agreed consideration passed between the parties. This is what is meant by saying that «consideration must be real, but need not be adequate». Another well-known term in this context is «caveat emptor»– let the purchaser beware. This term is applied because it is the purchaser of goods who makes the offer, and therefore he should take great care to ensure that he is getting the consideration he requires.

Special rules have been built up in contract to deal with the position of persons under 18 who are minors; persons who enter into contracts when drunk or suffering from mental illness; bankrupts, corporations and unincorporated associations. These rules are grouped under the heading of «capacity», in the sense that the law makes provision for the ordinary adult of sound mind, and any party who does not fall within this definition is covered by special rules.

In some circumstances the court is faced with a plea by one party that, although he has made the contract, he did not genuinely give his consent when entering into it. This may be because he made a mistake of fundamental significance to the contract, or it can be that the other party, by misrepresentation about the subject-matter, persuaded him to make the contract. If this plea is made, the court inevitably is put on inquiry to see whether or not the contract was properly entered into. If it is found that the mistake or misrepresentation did affect the consent, the court may not allow the contract to stand. Another factor which occasionally arises is the legality of the contract. Naturally the courts will not enforce agreements which in some substantial way infringe the law. Sometimes this occurs because Parliament specifically by legislation makes certain kinds of agreement unlawful, or it can happen because the judges decide that, as a mater of public policy, they will not give effect to certain kinds of agreement. A well-known class of contract falling within this latter category is a contract which is said to be «tainted with immorality». If the contract is found to be unlawful the court will not enforce it.