Understanding the Law
May 12, 2006
Contract pt.2

Last week’s article gave an insight into the law of contract and the major elements of a contract. It also dealt with one of the main elements of a contract namely, an offer. This week’s article will deal with another element of a contract.


An offer by itself does not complete the agreement. If you wish to formalize the contract you must communicate your acceptance to the other person who made the offer within the time and in the manner stated. This is illustrated in the 1893 English case of Felthouse v Bindley. To make a contract binding your acceptance must correspond with the offer stated by the offeror.{{more}} If you subtract or add anything to what is being offered then you would be essentially making a counter offer and it would become a new contract if the other person accepts it. This does not mean that errors cannot be corrected or slight adjustments made. The general principle is that for a contract to be binding there must be “a meeting of minds”-in other words the offer must correspond with the acceptance.

Most agreements are bilateral, that is, there is a promise for a promise. In most cases one person offers something of worth and another promise to pay for it. However, a person could make an offer without the other person making a promise or acceptance as in the case of a unilateral contract. The contract would be binding if the person who accepts actually performs what is required by the offeror. This is seen in the case where rewards are offered for lost items or for information. The person who finds an item after hearing about the offer can claim the reward not by a promise but by performance, that is, actually taking the item found to the offeror. The offeror cannot refuse because a valid contact would have been made.

The offeror, however, can state precisely whether acceptance could be by way of a promise or performance. Once the offer is followed up with acceptance the contract becomes irrevocable, that is, it cannot be changed. For example, unless there is fraud or mistake, once an agreement is made for the sale of land, the vendor must sell to the purchaser. An acceptance could be posted and it is decisive from the time it is left at the post office.

Another element of a contract is what is known in the law as “consideration” but this will be discussed in a subsequent article. It is important to note that there are different types of contracts but they all have the same basic principles as explained above. Of significance to note is the Sale of Goods Act in St. Vincent and the Grenadines. Most countries have similar provisions. For example, the USA has the Uniform Commercial Code (UCC) and the Second Restatement of Contract which govern sale of goods in that country. It must also be noted that the law recognizes a quasi-contract, that is, a contract that does not comply with the general principles of a contract. It may be so determined where tremendous hardship is caused by one party. It is a construct of the court to prevent unjust enrichment. When the court is faced with this type of contract it may order restitution to recover the benefits that the defendant might have gotten from it.

• Ada Johnson is a solicitor and barrister-at-law.

E-mail address is: exploringthelaw@yahoo.com