Question

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1. Explain the meaning of the following

a. Offer

b. Acceptance

c. Consideration

d. Privity of contract

its a business law question

Answer 1

a. Offer:

In contract law an offer typically means a promise one party makes in turn expecting another party’s performance. This can either be monitory benefits or anything valuable in exchange for performance. An offer becomes a real offer only when it is received by the offeror. The offeror has the right to revoke or take back an offer at any time prior to acceptance.

b. Acceptance:

When an offer is made by the offeror acceptance takes place when the offeree agrees to receive something for performance and agree to all terms of the contract. The agreement must be agreed without any condition or any changes which is known as mirror image rule.

c. Consideration:

Consideration in contract is all about bargaining a benefit between the parties in order to enter the contract. It must be a value which includes money, promise, property etc which is exchanged for the performance by the other party. It typically includes three steps which is bargaining, mutual exchange and exchange for something valuable.

d. Privity of Contract:

Privity of contract is a rule which specifies that only directly involved parties in a contract will be able to enforce the terms of the contract which means protecting third parties from interference. A person who is not a party to the contract will not be benefit from it.