A contract is defined by law (or as defined by Professor Sorensen) as an agreement, the promises in which the law recognizes. One may believe that this definition is enough to determine whether two parties actually have a contract. You would be mistaken, because I did think this would be enough. Instead, there are elements that must be met in order to determine if there is a contract.
Offer + Acceptance + [Consideration (usually)] + [In Writing (sometimes)] = a Contract
Let's take today to just look at one of the first elements; offer. An offer is a proposal for an agreement, which always includes a promise by the offeror, and requests a return promise or performance by offeree to seal the agreement.
An offer is a manifestation through his/her words or substitutes for words, or expression, of an intent/willingness to enter into an agreement (commitment) with terms that are reasonably certain that is communicated to the offeree in a way in which all the offeree has to do is accept to create the agreement. These are the three elements that must be present for an offer to be a true offer; commitment, certainty, and communicated. Certainty of terms are described in the price, manner of delivery, time, implied warranties, course of performance, course of dealing, and trade usage.
There are two types of offers; unilateral and bilateral. A unilateral offer is a promise made in exchange for a performance. A bilateral offer is a promise made for a promise received.
There are a few things that may get mistaken as an offer but are not because the person making the proposal didn't actually manifest a commitment to enter into an agreement with someone just by having them say "I accept." These include:
- actions manifested in jest (joke)
- invitations for someone else to make an offer
- preliminary negotiations
- no commitment until memorialized in writing
- advertisements (I won't bother with the exceptions at this point)
What are NOT promises??
- Statements of "intention," "hope," "desire"
- Inquiries of Interest
- Illusory Promises
These things are not promises because they do not express a commitment to perform.
Stay tuned for the second element discussion, acceptance.