Acceptance in contract with decided cases

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GET TO THE BEGINNING OF THIS POST BY CLICKING THIS Link or check the site home page… OFFER, ACCEPTANCE, INVITATION TO TREAT : A CASE SCENERIO

2.3 ACCEPTANCE 

For a contract to become binding, there must be acceptance by the party to whom it is addressed to. Niki Tobi JCA in Orient Bank v Bilante International Ltd declared that “…acceptance of an offer is the reciprocal action of the offeree to the offer in which he indicates his agreement to the terms of an offer as conveyed to him by the offeror”. An acceptance must be plain, unequivocal, and unconditional without variance to the original offer and must be communicated to the offeror without reasonable delay.

It can be manifested by the conduct of the parties, words, or documents. This was illustrated in Brogden v Metropolitan Railway Co.where the plaintiff made an offer to the defendants in writing, requesting the latter to sign and return a form containing the terms of the offer. The defendants never did this but they carried out the contract on those terms. It was held that they were bound by the contract and they had accepted the offer by their conduct.

3.0 ANALYSIS OF THE HYPOTHETICAL CASE

Based on the scenario above, Ms. Yola had to withdraw some money from Guarantee Trust Bank’s ATM. When it got to her turn, she saw a green light blinking. This green light was an invitation to treat because it indicated that the ATM card to be inserted. It was a preliminary move before the offer, and it was not capable of resulting in an acceptance upon assent. Therefore, it could not be binding. After she inserted her card, she was required to enter her pin. A couple of options appeared on the screen for her to select. She clicked on the ‘Withdrawal’ button, and some options for an amount to withdraw appeared on the ATM. The ATM displaying different amounts of money on the screen was still an invitation to treat as it is the electronic equivalent of display of goods in a shop window/shelf. Ms. Yola chose N15,000 and pressed the ‘enter’ button. It was at this point that an offer took place.

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An offer is said to be definite and precise, and it is made with the intention that it shall become binding upon acceptance by the other party. Thus, by pressing the “enter” button, Ms. Yola made an offer to the ATM to dispense cash from her bank account. After this, the ATM dispensed her money with a ‘thank you’ message. It was an acceptance by the ATM to Ms. Yola’s offer to withdraw N15,000. This reciprocal action by the ATM indicated that the contract was binding and valid.

However, the reverse would have been the case if Ms. Yola had failed to press “enter”. There would have been no offer. All the previous actions undertaken by her were merely invitations to treat. So, if there had been no offer, there would have been nothing to agree to or assent. It means that there would have been no valid contract. In other words, none of the parties would have been bound by a contract.

4.0 CONCLUSION 

It is trite to note that for any contract to be legally enforceable and valid, there has to be “consensus ad idem” (Meeting of the minds). Therefore, for ATM contracts to be binding, there has to be a meeting of minds which requires the presence of an invitation to treat, offer, and acceptance. 

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