Manawatu Herald TUESDAY, MARCH 16th, 1926. DEFINITION OF A CONTRACT.

Manawatu Herald, Volume XLVIII, Issue 3011, 16 March 1926, Page 2

Manawatu Herald TUESDAY, MARCH 16th, 1926. DEFINITION OF A CONTRACT.

IN the course of an instructive lecture delivered by Mr. J. G. Haddow, barrister and solicitor of Auckland, before the Auckland branch of the New Zealand Institute of Architects, the following; explanation of a “contract,” which should prove of interest to many of our readers, was given. The two important ingredients of a contract are an offer and an acceptance. Note carefully that the binding promise is the contract. We must also distinguish between the promise from an offer. The offer becomes a promise when it has been accepted. Until acceptance an offer may be withdrawn. But immediately upon acceptance its nature' is changed and it becomes a promise. To illustrate: If B says to X: “I will sell you my horse for £50.” This is an offer. If X answers: “I will give you £49 for it,” B’s offer remains an offer only (if il remains at all), but if X says “Agreed,” B’s offer becomes at once a promise, rvhich binds him. Contractual obligations are by these words formed between B and X, and B must sell the horse for £SO, and X must buy it for that sum, and neither can now escape this simple legal result of their words without the consent of the other. We may now apply these rules to our own immediate requirement. An invitation to tender is a mere attempt to ascertain whether an offer can be obtained at such a price as a building owner is willing to adopt. When tenders are received they are the legal offers, and, like all offers, may be withdrawn at any time prior to their acceptance. And, of course, the architect’s letter of acceptance turns a tender into a contract and the tender’s right of withdrawal ceases to be. A binding contract has been formed. Applying what we have just been considering, as to the formation of a contract, we now see that if the acceptance makes any new condition or differs in any way from - the tender it is not a legal acceptance, and still leaves the tenderer his right to withdraw. A tender remains an offer until some counter offer is made to the tenderer, or until another tender has been accepted. If neither of these courses is taken the tender remains open for a reasonable time, which time cannot be longer than the time fixed for the work to begin.