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1. Offer - An offer is a manifestation by one party of a willingness to enter into a contract
2. Offeror - The offeror is the party who make the offer
3. Offeree - The offeree is the party to whom an offer is made. This party has the power to create an agreement by accepting the term of the offer.
The intent to enter into a contract is determined by the objective theory of contract - that is, whether a reasonable person viewing the circumstances would conclude that the parties intended to be legally bound.
Definiteness of Terms
The term of an offer must be definite so that the agreement between the parties can be determined.
Reasonable term ( eg price, time for performance) may be implied
An offer must be communicated to the offerce by the offeror
Generally, an advertisement is an invitation to make an offer. However, an advertisement is an offer if it is so definite and specific as to show the advertiser's intent to be bound to the term of the advertisement.
A reward is an offer to create a unilateral contract.
There are two types of Auctions
1. Auction with reserve. An auction with reserve is an invitation to make an offer. The sellers retains the right to refuse the highest bid and withdraw the good from sale.
2. Auction without reserve. An auction without reserve is an offer. The seller must accept the highest bid ( above the minimum bid ). This type of auction must be stipulated.