Khoá luận tốt nghiệp: Contractual offers under English, German, and Vietnamese contract law: A comparative perspective and implications for Vietnam

Definition of Contractual offers In contract law, the concept of a contractual offer holds significant importance inthe process of forming a legally binding agreement, It serves as a cru

MINISTRY OF JUSTICE MINISTRY OF EDUCATION AND TRAINING

AND IMPLICATIONS FOR VIETNAM

Subject: Comparative Law

BACHELOR’ S GRADUATION THESIS

SUPERVISOR

LLM ĐỖ THI ANH HONG

Nội -2023

STATUTORY DECLARATION

Confirmation of supervisor

Therewith formally declare that Imyseif havewritten the submitted Bachelor's Thesisindependently, the conclusions and data inthe Bachelor's Thesis ave truthful andreliabie./

Author of Bachelor's Thesis

verus (against)

1, Rationale of the Thesis 1

2 Review of previous studies related to the Thesis 2

3 Scientific and practical significance of the Thesis 2

5 Object and scope of the Thesis

6 Method used to prepare the Thesis 4

7 Thesis structure 4CHAPTER I.THEORETICAL ISSUES OF CONTRACTUAL OFFERS 61.1 Concept of Contractual offers in contract law 6

1.1.2 Key elements of Contractual offers 81.1.3 Contractual offer and non-contractual offer 91.2 Significances of Contractual Offers "1SUBCONCLUSION TO CHAPTER 1

CHAPTER 2 CONTRACTUAL OFFERS UNDER THE ENGLISH,

GERMAN AND VIETNAMESE LAW

2.1 Overview of English Contract Law 143.1.1 The concept of Contractual Offer under English contract Law 152.1.2 An analysis of Contractual Offers in England ”2.2 The concept of contractual offer in Gemrany 4

2.2.2 Definition of contract and its elements under German law 262.2.3, Introduction to the Concept of Offer and Its Role in Contract

Formation 38

2.24, Essential Elements and Requirements for an Offer under German Law

32.3, The concept of Offer presented under Vietnamese Law 302.3.1 Definition of contract and its elements 40

3.4 Comparison between Vietnamese, German and English laws on

Contractual Offers 4624.1 Similanities and differences between English, Geman, and

2.4.2 Explanation for the differences 48SUB CONCLUSION CHAPTER 2

CHAPTER 3 COMPARATIVE ANALYSIS OF CONTRACTUAL

OFFERS IN THREE JURISDICTIONS AND POTENTIAL

IMPLICATIONS FOR VIETNAMESE LAW

43.1 Identification of gaps, inconsistencies, and ambiguities in the current legal

framework 52

3.2 Recommendations to complete the law and implications for Vietnam 553.2.1 The Implication of non-contractual offers definition 553.2.2 The application of Case law 50SUB CONCLUSION CHAPTER 3

CONCLUSION

REFERENCES

Rationale of the Thesis

Contract aw holds immense significance in all junisdictions, encompassing theeveryday activities of socio-economic societies in both developed and developingcountries While developed nations, fortified by robust economic foundations,continually refine their contract laws to adapt to evolving circumstances,developing countries seeking integration into the global economy must alsoenhance their legal frameworks, with contract law serving as a pivotal normVietnam, as a developing nation currently undergoing integration, must adhere tothis overarching principle and strive to perfect its contract law to meetcontemporary demands

The relevance of contract law cannot be overstated, as it provides the legalframework for establishing, enforcing, and regulating agreements between partiesThese agreements underpin the vast amay of transactions and interactions thatoccur within the social and economic fabric of any country Whether it involvesthe purchase of goods, the provision of services, or the formation of complex

‘business arrangements, contracts are the bedrock on which commercial activitiesrely,

Comparative analysis enables Vietnam to leam from established legal principles,procedural mechanisms, and judicial interpretations that have proven effective in.resolving contractual disputes By adapting, contextualizing, and applying theseinsights, Vietnam can refine its legal framework, creating a contract law regimethat meets the needs of its evolving socio-economic landscape Therefore,

“Contractual Offers under English, German, and Vietnamese Contract Li

A Comparative Perspective and Implications for Vietnam" is chosen

1

This thesis focuses on the topic of contractual offers under English, German, andVietnamese contract law, adopting a comparative perspective to analyze theirsimilarities, differences, and implications for Vietnam The study aims to clarifythe concept of contractual offers, synthesize and analyze the relevant regulations inthe current legal systems, and provide recommendations to address any existing oranticipated shortcomings

Review of previous studies related to the Thesis

Dr Anna Katharina Suzuli-Klasen, A Comparative Study of the Formation ofContracts in Japanese, English, and German Law This research investigates theformation of contracts in the legal systems of Japan, England, and Germany, withaspecific focus on the process of contract formation, including the role ofcontractual offers The study examines the legal principles, rules, and requirementsgoveming contract formation in each jurisdiction It analyzes the similarities anddifferences in the treatment of offers, acceptance, revocation, and other relatedconcepts By comparing Japanese, English, and German contract law, the researchaims to identify commonalities and divergences in the formation of contracts,providing insights into the legal frameworks of these three countries

Scientific and practical significance of the Thesis

- The scientific significance

The scientific significance of this research lies in its contribution to thedevelopment of legal theory within the field of contract law in Vietnam Byexploring the theoretical aspects of contractual offers, the thesis enhances theoverall understanding of contract law within Vietnamese legal science

- Practical significance

‘The recommendations derived from this research will serve as valuable referencematerial for lawmakers, competent authorities, courts, arbitration centers,employees, and enterprises It will aid in the improvement and completion ofVietnamese contract law regulations concerning contractual offers, assist in theresolution of disputes related to contractual offers, and guide employees andenterprises in effectively navigating this aspect of contract law

4 Objectives of the Thesis

‘The objectives of the thesis encompass clarifying the concept of contractual offers,analyzing the relevant regulations within the current Vietnamese legal system,conducting a comparative analysis of English, German, and Vietnamese contractlaw, and providing recommendations to address any gaps or deficiencies in theexisting legal framework

5 Object and scope of the Thesis

‘The scope of the thesis centers on the examination of contractual offers within theVietnam Civil Code 2015 - The Law No 91/2015/QH13 on Detailed regulationsfor the implementation of the Labour Code, and other related legal documents Italso encompasses an exploration of the contractual offer regulations in English andGerman law, providing a comprehensive comparative analysis

By focusing on contractual offers, the thesis does not extend its scope to includeother elements of Contract such as labors, terms and formality, Instead, itconcentrates on the central role of offer within the realm of contractual offers andits implications within the English, German, and Vietnamese legal systems

In conclusion, this thesis is dedicated to exploring contractual offers under English,German, and Vietnamese contract law Through a comparative perspective, it aims

3

to identify similarities, differences, and implications for Vietnam The researchprovides valuable insights for the development and refinement of Vietnamesecontract law, benefiting lawmakers, authorities, courts, arbitration centers,employees, and enterprises.

6 Method used to prepare the Thesis

6.1 Methodology

To camy out the abovementioned objectives, the Thesis resort to MarxismLeninism research methodology, dialectical materialism, and the policies of theCommunist Party of Vietnam and the State on socialist-oriented market economy,democracy promotion, and law-govemned socialist state

6.2 Research method

Specific research methods include analysis, synthesis, comparison, statistics,jurisprudence comparison, historical research, proof, practical research, andscientific prediction These methods could be seen in all chapters of the Thesis,Among these methods, the analysis and comparison method are commonly used to

‘build up scientific arguments for the Thesis,

1 Thesis structure

In addition to the Preface, Conclusion and References, the Thesis comprises ofthree

Chapter 1: Theoretical issues Contractual Offers

Chapter 2: Contractual offers under the English, German and Vietnamese law

Chapter 3: Comparative analysis of Contractual Offers in three jurisdictions andpotential implications for Vietnamese Law

CHAPTER I THEORETICAL ISSUES OF CONTRACTUAL OFFERS

1.1 Concept of Contractual offers in contract law

1.11 Definition of Contractual offers

In contract law, the concept of a contractual offer holds significant importance inthe process of forming a legally binding agreement, It serves as a crucial element

in understanding the dynamics of contract formation and the rights and obligations

of the parties involved,

‘Through a legal theoretical foundation, a contractual offer can be defined as aformal and explicit proposal made by one party, known as the offeror’, to another party, known as the offeree? The offeror, through this proposal, expresses their intention to enter into a legally enforceable contract with the offeree? By makingthe offer, the offeror conveys their willingness to be bound by specific terms andconditions upon acceptance by the offeree The offeror’s intention to create legalrelations is a fundamental aspect of a contractual offer It distinguishes a mereinvitation to negotiate or an expression of interest from a genuine offer Theofferor must demonstrate an unequivocal intention to be Legally bound by the termsand conditions outlined in the offer And the Legal nature of the offer will protectboth parties, as the binding nature of a contract means that the parties can seeklegal remedies if either party fails to fulfill their obligations Breach of contractoccurs when one party fails to perform as required by the contract, resulting inpotential legal consequences, such as monetary damages or specific performance

“nhan sitions, he pason offering a contact canbe called Promise Qi), Proposer (Ansa nd Shapers, DNhem cv hay piditone such as rcs and Geman, Offre (South Afric, the tx,

For an offer to be valid, it must contain certain essential elements These elementsinclude the identification of the parties involved, the subject matter of the contract,the consideration or price to be paid, and any specific terms and conditions that theofferor wishes to impose, The tems of the offer should be sufficiently definite toenable the offeree to understand the nature of the proposed agreement This is one

of the most important factors regarding contract formation which is ad indem orMeeting of the Minds (also referred to as mutual agreement, mutual assent orconsensus ad idem) isa phrase in contract law used to describe the intentions of theparties forming the contract It is a findamental legal requirement for a validcontract To be enforceable, a contract must be based on a genuine agreementbetween the parties, which includes offer, acceptance, consideration and capacity

to enter into a contract *

Once the offer is made, the offeror must communicate it to the offeree The offercan be communicated through various means, such as in waiting, orally, or eventhrough conduct, depending on the circumstances and the nature of the contract.The offeree must know about the offer to be able to accept it There must beevidence that the parties had ch, from an objective perspective, engaged inconduct manifesting their assent, and a contract will be formed when the partieshave met such a requirement S

It is important to note that an offer can be terminated or revoked in certainsituations The offeror may withdraw the offer before it is accepted, eitherexplicitly or implicitly, through their words or conduct Additionally, the offer may

———Ắ— `"

‘Tord Steyn, Contract La: Purling te Reasonable Eopectttions of Honest Men’ (1997)

7

lapse or expire after a reasonable period if the offeree does not accept it within thattimeframe®

In conclusion, a contractual offer is a formal proposal made by one party toanother, expressing an intention to enter into a legally enforceable contract Itsignifies the offeror’s willingness to be bound by specific terms and conditions

‘upon acceptance by the offeree Understanding the concept ofa contractual offer iscrucial in comprehending the dynamics of contract formation and the rights andobligations of the parties involved

1.12 Key elements of Contractual offers

So, from the understanding above we can conclude the key elements of acontractual offer include

a) Intention to Create Legal Relations: A contractual offer must demonstratethe offeror's intention to create a legal relationship upon the offeree's acceptance.This intention distinguishes a contractual offer from a mere statement of intent or

an invitation to negotiate

Đ) Definite and Certain Terms: A contractual offer must contain definite andcertain terms that are clear, specific, and leave no room for ambiguity These termsdefine the nights and obligations of the parties and may include essential elementssuch as price, subject matter, quantity, quality, and any specific conditions or

requirements

©) Communication’ For a contractual offer to be effective, it must becommunicated to the offeree or reasonably brought to their attention The offeree

© orem iowm inmay jist as “Lapse of wm otfer tis when the tưng of offer app 45 «

esukof the passge of taaedeth or the nonfufmntef «condsion.

a

must be aware of the offer's existence, terms, and conditions to be able to evaluateand respond to it.

1.13 Contractual offer and non-contractual offer

It is important to note that a mere expression of willingness to negotiate or aninvitation to the offeree to make an offer does not constitute a contractual offer.Such preliminary communications, often referred to as invitations to treat” or non- contractual offersŠ, are not binding and are considered as a prelude to the formationofa contract,

A contractual offer and a non-contractual offer are distinct forms ofcommunication that have different legal implications and consequences Thedistinction between a contractual offer and other forms of communication iscrucial, as it determines the rights and obligations of the parties Once a validcontractual offer is accepted by the offeree, it forms the basis ofa binding contract,and the parties are legally obligated to fulfill their respective duties andresponsibilities On the other hand, a non-contractual offer will not result in a legal

‘binding contract is a communication that invites others to make an offer It is notintended to create a binding contract but rather to initiate negotiations or solicitoffers from potential parties Examples of non-contractual offers includeadvertisements, price lists, catalogs, and displays of goods in a store Thesecommunications are considered invitations for others to make offers, and the partymaking the offer becomes the offeror

‘The key distinction between a contractual offer and a non-contractual offer lies inthe intention to create legal relations A contractual offer is made to forma binding

“he defnation ppees many jesdictons however thre weno equal tthe Vitus jurisdiction,

‘Burows,A Offa tả Acceptance” Carebook on Contact 2009)

H

contract upon acceptance, while a non-contractual offer is made to initiatenegotiations or invite others to make offers

Ina non-contractual offer scenario, the party receiving the invitation to treat canrespond by making an offer, which can then be accepted by the original offeror toform a contract® For example, when a customer selects items from a store shelfand takes them to the cashier, the customer makes an offer to purchase those items,and the cashier's acceptance at the point of sale forms a contract It is important tonote that the distinction between contractual and non-contractual offers cansometimes be complex and may vary depending on the jurisdiction and specificcircumstances Legal principles and rules governing offers and acceptance candiffer across different legal systems

In conclusion, a contractual offer is a proposal that, when accepted, creates a

‘binding contract, while a non-contractual offer is an invitation to treat that initiatesnegotiations or invites others to make offers, Understanding the differencesbetween these two types of offers is essential in determining the Legalconsequences and obligations of the parties involved in a given transaction

In conclusion, a contractual offer is a formal proposal made by an offeror to anofferee, expressing an intention to enter into a legally binding agreement Itrequires an intention to create legal relations, definite and certain terms, andeffective communication to the offeree Recognizing and understanding thedlements of a contractual offer is essential for both legal practitioners andindividuals engaging in contractual relationships, as it lays the foundation for thesubsequent stages of contract formation and the enforcement of contractual rightsand obligations,

‘France of the al Bae Masket Sragarirufs m Eronamics, Springer, Barn, Heideberg Q014)

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1.2 Significances of Contractual Offers

Contractual offers have significant importance in everyday life, beyond just formal

‘business transactions, Here are some examples of their significance:

Purchasing Goods and Services: When you go shopping or make online purchases,the displayed prices and product descriptions serve as contractual offers Byaccepting these offers, you enter into a contract with the seller, and they areobligated to provide the goods or services as described, while you are obligated topay the agreed-upon price

Employment Contracts: When you apply for a job and receive an offer letter, itconstitutes a contractual offer By accepting the offer, you enter into anemployment contract, which outlines your rights, responsibilities, and tems ofemployment This offer acceptance solidifies the agreement between you and theemployer

Rental Agreements: When you search for a place to rent, the terms and conditionsprovided by the landlord or property manager form contractual offers Byaccepting the offer and signing the lease agreement, you establish a legally bindingcontract that govems your tenancy, including rent, duration, and other terms

Service Agreements: When you hire professionals, such as contractors, lawyers, orconsultants, the terms and conditions they provide constitute contractual offers Byaccepting these offers, you establish a contractual relationship, and the serviceprovider is obligated to deliver the agreed-upon services, while you are obligated

to pay the specified fees

Online Terms and Conditions: When you sign up for online services, such as socialmedia platforms, e-commerce websites, or software applications, the tems and

"

conditions presented to you serve as contractual offers By accepting these terms,you enter into a contract with the service provider, agreeing to abide by their rulesand guidelines

Agreements with Friends and Family: Even informal agreements with friends andfamily can be considered contractual offers For example, if you agree to lendmoney to a friend and they accept the offer, a contract is formed, and they becomelegally obligated to repay the loan according to the agreed-upon tems,

Contractual offers are significant in everyday life as they establish the terms,rights, and obligations between parties involved in various transactions andagreements, They provide clarity, protect the interests of both parties, and ensurethat agreements are legally enforceable Understanding the significance ofcontractual offers helps individuals navigate their rights and responsibilities ineveryday interactions and transactions

2

SUBCONCLUSION TO CHAPTER 1

In Chapter 1, we established that the concept of contractual offers is fundamental

in contract law and plays a crucial role in the formation of legally bindingagreements A contractual offer is a formal and explicit proposal made by oneparty to another, expressing an intention to enter into a contract It requires theofferor's intention to create legal relations, definite and certain terms, andeffective communication to the offeree Understanding the elements andsignificance of contractual offers is essential for both Legal practitioners andindividuals engaging in contractual relationships Contractual offers providelarity, establish rights and obligations, and ensure the enforceability ofagreements in various contexts, from purchasing goods and services toemployment contracts and rental agreements By comprehending the dynamics

of contractual offers, parties can navigate their rights and responsibilities andseek Legal remedies in case of breach or non-performance

‘The theoretical issues in Chapter I of the Thesis form the basis for the analysis ofcurrent regulations in Vietnam and several countries in Chapter II and theproposal of new regulations on contractual in Chapter III

=

CHAPTER 2 CONTRACTUAL OFFERS UNDER THE ENGLISH,

GERMAN AND VIETNAMESE LAW

2.1 Overview of English Contract Law

With a long and established common law tradition, England has developed a stronglegal framework for contract law that provides clarity and predictability incontractual matters The legal framework for contract law in England is primarily

‘based on common law principles, which have been developed and refined through

a long history of judicial decisions This common law tradition, coupled withstatutory provisions such as the Sale of Goods Act 1979 and the Consumer RightsAct 2015, has contributed to the establishment ofa robust and comprehensive legalframework

In addition to common law principles, England has also enacted legislation toregulate specific aspects of contract law For example, the Unfair Contract TermsAct 1977 restricts the use of unfair terms in contracts, protecting consumers andparties with weaker bargaining positions The Contracts (Rights of Third Parties)Acct 1999 allows third parties to enforce contractual rights in certain circumstances

Furthermore, England has established specialized courts, such as the CommercialCourt and the Technology and Construction Court, to handle complex contractualdisputes These courts have developed expertise in contract law matters andprovide efficient and specialized resolution of contractual disputes

Furthermore, the English courts play a significant role in shaping contract lawthrough their interpretation and application of legal principles They rely onprecedents set by previous cases, which creates a body of case law that serves asa

4

guide for future disputes, This enables consistency and coherence in theapplication of contract law One notable feature of English contract law is itsemphasis on the objective intention of the parties The courts focus on the outwardexpressions and actions of the parties rather than their subjective intentions Thisobjective approach ensures that contractual agreements are determined based on

‘what a reasonable person would understand from the parties' words and conduct

Overall, the legal framework for contract Jaw in the English is well-established,providing certainty and clarity in contractual relationships It balances theprinciples of freedom of contract with necessary protections for parties, ensuringfaimess and enforceability of agreements The combination of common lawprinciples, legislation, and specialized courts contributes to the strength andeffectiveness of English contract law

However, it should be noted that the following research focuses on the concept ofcontractual offers in theory based on the reality of enforcing the law and researchfrom scholars, and will not go in-depth into the statutory law of the Englishcontract law as there too many grounds to cover and will not satisfy the solepurpose of this thesis is to understand the concept of contractual offer in eachjurisdiction and give out comparison view and application for Vietnam,

2.1.1 The concept of Contractual Offer under English contract Law

2.1.1.1 The Concept of Contract under English Law

The shift in the notion of an agreement as bilateral rather than unilateral wasindeed made by Thomas Hobbes” in the mid-seventeenth century Hobbes defined

© Theme Hobbes, Bruit plosopr, and founder of modem poitical plosophy

1

a contract as "the mutual transfer of rights,"” emphasizing the idea of a mutual

exchange between parties This concept resonated in English legal treatises oncontract law in the eighteenth century For instance, in 1796, Powell described acontract under common law as an agreement between two or more partiesconceming something to be done, where both parties are bound to each other orone is bound to the other This definition highlights the mutual obligations andcommitments between the parties involved Another simpler definitioncharacterizes an agreement as the aggregation of minds, where two or moreindividuals come together to perform or undertake a particular action, Thisdefinition emphasizes the unity of intent and purpose between the parties Itappears that the notion of agreement has evolved, with the focus shifting towardsthe consent of the parties to assume obligations This understanding aligns withPowell's description of parties consenting to an obligation The law of contractunder the common law system in England developed out of procedural law andindividual strands of notion of contract were gradually combined to make a —pethaps patchwork-like — fabric A contract is understood as a bargain and istypically formed through matching declarations of offer and acceptance Thesedeclarations of intention are distinguished from invitations to treat and other non-

‘binding statements and acts In order to constitute legally relevant statements, thedeclarations must furthermore be certain and be communicated to the other party

In summary, contracts are bilateral agreements involving the mutual transfer ofrights This perspective was further reflected in English legal treatises on contractlaw in the eighteenth century, emphasizing the consent and mutual obligationsbetween parties, and most importantly contracts became binding for the parties

‘based on their ‘mutual assent”

`"

Jos Cans, A Digest ofthe Las of Bagh V@1T

16

In a common law country like the UK, an offer to form a contract consists ofseveral essential elements, including offer, acceptance, consideration, capacity,intention to create legal relations, certainty of terms" and legality Each elementplays a vital role in determining the enforceability and validity of the contract Italso should be noted that, many sources state differently about the exact elementsofa contract offer in common law countries, yet the most 4 basic elements that arealways mentioned are “offer”, “acceptance”, “consideration”, and “mutualagreement” However, mutual agreement tends to be dissected into Legalintention’, capacity, and mutual assent!*

As with the general concept of a contract, there is no universal, explicit definition

of an offer — nor of acceptance — in English law In a recent case, it was held totbe ‘an expression, by words or conduct, of a willingness to be bound by specifiedterms as soon as there is acceptance by the person to whom the offer is made’ Inacademic writing, the term is normally defined as consisting of a statement whichexpresses both a willingness to enter into a contract with the other party, and which

ch party will undertake to do (or not do), ie what the terms

of the contract are to be Having said this, the offer need not state all the terms ofalso sets out what

the contract, as the English courts have the general power to imply reasonableterms that are missing from the agreement An offer represents the willingness toenter into a legally binding agreement on specific tems" It must becommunicated to the offeree and demonstrate an intention to create legal relations.The offeror must manifest an intention to be bound by the offeror's tems ifaccepted by the offeree However, mere statements of intention or expressions of

Yee, 6 G01) The Lar of Ca (3 ed) Smat & Miosval

ˆ Aưạnh B.S An harodactionto ts Lae dể Contract Oxford Unversity Prec, (1095).

‘GeargeP Comte, Inplied- Fat Cotract and Mal Aesgt Svand Lev Review, Vol 33,No.3

(Gan, 1920) pp.376-400

"Bi v Ady page 52 (Lagat 0n the aspect of th ntentizn tobe bound le Soo ase g0) isaccepted

‘bythe person te whom 2s adresse”

"BASIC PRINCIPLES OF ENGLISH CONTRACTLAW Prepared by ayers from Allen & Ovary

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future intent do not constitute offers The element of acceptance signifies theofferee's agreement to be bound by the terms of the offer Acceptance must becommunicated to the offeror and in the manner prescribed or implied by the offerSilence or inaction generally does not constitute acceptance, except when there isacourse of dealing or a previous course of dealings between the parties.

Consideration is another essential element of a contract It refers to the for exchange between the parties, where each party receives something of value orassumes a legal detriment Consideration ensures that there is a mutuality ofobligation and distinguishes a contract from a mere gift or gratuitous promise

bargained-‘The intention to create legal relations is a crucial element in contract formation Itdetermines whether the parties intended their agreement to be legally bindingWhile commercial agreements are generally presumed to have an intention tocreate legal relations, social or domestic agreements may lack such intent

2.1.1.2 Formation of a contract, including the concept of Contractual Offer

The formation of a contract in England requires the presence of a valid offer Anoffer is an expression of willingness to be bound by specific terms, giving rise toapower of acceptance in the offeree To be considered a valid offer, certainrequirements must be met

Firstly, there must be a clear intention to create legal relations” between theparties This requirement ensures that the agreement is not merely a socialarrangement or an expression of goodwill but has legal consequences The courts'Will assess the circumstances surrounding the agreement to determine the intention

"aston wih an hon tot Me he case of Carll Curboic Sunke Bul Conpany [1893] The copay advertised tha th would pay £100 to anyone who caught the fn aftr using ther sake alles

-5ecnrtd The cours eld hi acetcemensto bec mubterloftereace contamed pec tama and the indication of « deposa na bak shoved the company’s itantion tobe legally bound The past clamaed the

‘ovard,jroviting vouble empl of am avericemen sung afer rr than tà aston tet

1

of the parties And in most cases, the court will judge based on the action of theparties rather than the intention of the parties, for example, in the case of “Storer v

‘Manchester City Council [1974]" former British Lord of Appeal in Ordinary, LordDenning ruled that “In contracts, you do not look into the actual intent in a man'smind, You look at what he said and did A contract is formed when there is, to alloutward appearances, a contract”

Secondly, the terms and form of the offer must be certain and definite, providingsufficient clarity for both parties to understand their rights and obligationsUncertainty in terms and wrong form can render an offer invalid, For ple, anoffer that lacks specificity in terms of price, quantity, or performance may bedeemed uncertain Or in terms of the form of a contract in English law, generally,contracts can be made informally; most contracts can be formed orally, and insome cases, no oral or written communication at all is needed Thus, an informalexchange of promises can still be as binding and legally valid asa written contract

‘There are statutory exceptions to this rule For example: (i) a lease for more than 3years must be made by deed: Law of Property Act 1925, ss 52, 54(2); (i) mostcontracts for the sale or disposition of an interest in land must be "made inwriting": Law of Property (Miscellaneous Provisions) Act 1989, s 2; (ii) contracts

of guarantee are required to be evidenced in writing: Statute of Frauds, s4

Furthermore, communication of the offer to the offeree is essential The offer musttbe brought to the offeree's attention, either directly or through a reliable third party.Communication enables the offeree to consider the terms of the offer and decidewhether to accept or reject it Generally, an offer is effective upon receipt by theofferee, but there may be exceptions where a specific mode or time of acceptance

is prescribed

© Soret v Mancester Cay Come [1974] page £27

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Moreover, English contract law recognizes that offers can be terminated orrevoked in certain circumstances, The termination of an offer occurs when it ceases

to be capable of acceptance, while revocation refers to the withdrawal of an offer

by the offeror Termination can happen through the lapse of a specified time, theoccurrence of a specified event, or the death or incapacity of either party.Revocation, on the other hand, generally requires communication of the

‘withdrawal to the offeree before acceptance

An offer must be distinguished from an invitation to treat, by which a person doesnot make an offer but invites another party to do so Whether a statement is anoffer or an invitation to treat depends primarily on the intention with which it ismade An invitation to treat is not made with the intention that it is to be binding assoon as the person to whom it is addressed communicates his assent to its tems,Common examples of invitations to treat include advertisements” or displays of goods ona shelfina self-service store”

Understanding the conditions under which offers can be terminated or revoked isessential for determining the enforceability of contractual arrangements Itprovides guidance on when parties can no longer rely on an offer to create Legalobligations

2.113 Key principles and landmark cases related to contractual offers inEngland

English contract law has developed through a rich body of case law, which hasshaped the principles governing contractual offers Notable cases, such as Carlill v.Carbolic Smoke Ball Co, have played a significant role in clarifying andestablishing legal principles related to offer acceptance In this case, the defendant,

° Buyidg: v Cette [1968] 1 WLR 1204

° Bhammaceeical Society of Gest Bren v Boots Cash Chait (Sothern) Tại (1953 1 QB 410.

20

the Carbolic Smoke Ball Company, placed an advertisement in a newspaper fortheir products, stating that any person who purchased and used their product butstill contracted influenza despite properly following the instructions would beentitled to a £100 reward The advert further stated that the company haddemonstrated its sincerity by placing £1000 in a bank account to act as a reward,The claimant, Mrs Carlill, thus purchased some smoke balls and, despite properuse, contracted influenza and attempted to daim the £100 reward from thedefendants The defendants contended that they could not be bound by the advert

as it was an invitation to treat rather than an offer on the grounds that the advert

‘was: mere ‘puff and lacking true intent; that an offer could not be made ‘to the

‘world’; the claimant had not technically provided acceptance; the wording of theadvert was insufficiently precise; and, that there was no consideration, as necessaryfor the creation ofa binding contract in law

In this case, The Court of Appeal found for the claimant, determining that theadvert amounted to the offer for a unilateral contract by the defendants Incompleting the conditions stipulated by the advert, Mrs Carlill providedacceptance The Court further found that: the advert's own claim to sinceritynegated the company’s assertion of lacking intent, an offer could indeed be made

to the world; wording need only be reasonably clear to imply terms rather thanentirely clear, and consideration was identifiable in the use of the balls,emphasizing that acceptance can be communicated through conduct in certaincircumstances, This case has had a lasting impact on how offers are interpreted andenforced in England, particularly in relation to unilateral offers and acceptance byconduct

In addition to this case, vanous principles and doctrines have emerged fromjudicial decisions, providing guidance on offer and acceptance For example, the

a

postal rule states that an acceptance is generally effective upon posting, even ifitislost or delayed in transmission However, this rule may not apply in certainsituations, such as when the offeror specifies a particular mode of acceptance or

‘when it would be unreasonable for the offeree to rely on the postal service

Furthermore, the concept of unilateral contracts, where the offeror promises areward or consideration upon the completion of a specific act by the offeree, has

‘been recognized in English contract law The acceptance of a unilateral offer istypically through the performance of the requested act However, the offeree musthave Imowledge of the offer's existence to accept it

Overall, these key principles and landmark cases have shaped the landscape ofcontractual offers in England They provide valuable insights into offer acceptance,the determination of intention to create legal relations, and the interpretation ofterms, among other aspects of contract formation,

In conclusion, this section has provided an expanded overview of contract law inEngland, focusing on contractual offers Understanding the legal framework andprinciples gøveming offers is essential for comprehending contract formation inEngland and its implications for businesses and individuals engaging in contractual

arrangements

2.1.2 An analysis of Contractual Offers in England

To conclude, a contractual offer refers to a proposal made by one party (theofferor) to another party (the offeree) indicating a willingness to enter into a legally

‘binding agreement In contract law, an offer isa crucial element in the formation of

a contract, as it sets out the terms and conditions upon which the parties can create

a legally enforceable relationship

For an offer to be valid, it must meet certain requirements First, the offer must belear and definite, leaving no room for ambiguity or misunderstanding The terms

of the offer should be specific and sufficiently detailed to enable the offeree tounderstand what is being proposed

Second, the offer must indicate an intention to create legal relations This meansthat the offeror must demonstrate a serious and genuine intention to be bound bythe terms of the offer In most cases, commercial transactions are presumed to havethe intention to create legal relations, while social or domestic arrangements maylack this intention

‘Third, the offer must be communicated to the offeree The offeree must be aware

of the offer and its terms in order to consider and respond to it Communicationcan occur through various means, such as face-to-face conversations, writtencorrespondence, email, or even through actions that clearly indicate the offerors

intent,

Its important to note that an invitation to treat is distinct from a contractual offer

An invitation to treat is an invitation for others to make offers, such asadvertisements, price lists, or displays of goods ina store When a person responds

to an invitation to treat by making an offer, itis the offer that becomes the basis forpotentially forming a contract, and a non-contractual offer like a promise is alldifferent though it is binded by the doctrine of Promissory estoppel which is alegal doctrine that prevents a party from going back on their promise if the otherparty has relied on that promise to their detriment It is a principle that can beinvoked to enforce a promise even in the absence ofa formal contract ?2

‘Burows, Andre 4 Casebook on Contract std, Bleopxtnry Publishing, 2018

Ey

Once a valid offer has been made, the offeree has the option to accept, reject, orPropose a counteroffer Acceptance of the offer, without any materialmodifications, creates a binding contract between the parties However, if theofferee introduces new terms or conditions in their response, it is considered acounteroffer, which may lead to a negotiation process or a rejection of the originaloffer

It is worth noting that the revocation of an offer is possible before it is acceptedunless the offer includes an option to keep it open for a specified period”Revocation can be communicated explicitly by the offeror or through actions thatreasonably indicate a withdrawal of the offer If it is not communicated, therevocation is ineffective Once an offer is revoked, it can no longer be accepted

by the offeree

In summary, a contractual offer is a proposal made by one party to another,indicating a willingness to enter into a legally binding agreement The offer mustbbe clear, demonstrate an intention to create legal relations, and be communicated tothe offeree It forms the basis for the formation of a contract upon acceptance bythe offeree, leading to the establishment of rights and obligations between theparties involved

2.2 The concept of contractual offer in Germany

3.21 Overview of German Contract Law

"Dickanson v Dod (1076): The coum ths cas sable tht mg may be revoked by the offer even fhe effec kad revansly promised Weep te afferopenfor a specified period The evocation tt be

‘coumamicatedt the oferae before acceptance takes pace

° Bụmn v Vin Tin (80), Inch chợt, courte tht a offer canbe effectively evoked the

evocation is commamicetedto tự offeree before they have accepted he offer The revocation ta đt

‘conmamicated or trougit toe offee'’s ation by arelable Source

24

German contract law, with its rich historical development and influentialjurisprudence, occupies a prominent position within the global legal landscapeRooted in the principles of freedom of contract and party autonomy, Germancontract law is characterized by its meticulous attention to detail, emphasis onfaimess, and adherence to the principle of good faith

Germany, renowned for its strong legal tradition and civil law system, has a highlydeveloped and sophisticated body of contract law that govems the rights andobligations of parties entering into contractual relationships German contract lawfinds its basis in both legislation and judicial decisions, creating a harmoniousinterplay between statutory provisions and judge-made law This amalgamationallows for flexibility and adaptability in responding to evolving societal andcommercial needs while maintaining legal certainty

‘The legal framework for contracts in Germany is primarily codified in the GermanCivil Code (Burgerliches Gesetzbuch or BGB), which came into force on January

1, 1900 The BGB, a monumental achievement in the field of private law, provides

a comprehensive and systematic regulation of contractual relationships It cavers awide range of contractual matters, including the formation, interpretation,performance, and termination of contracts, as well as remedies for breach of

contract.

But most importantly and what this thesis is focusing on is in German contract law,the concept of offer and acceptance plays a pivotal role in the formation ofcontracts An offer (Angebot) represents a proposal made by one party to another,indicating a willingness to be bound by specific terms upon acceptance The offermust be sufficiently definite and specific, leaving no room for ambiguity or

confusion Acceptance (Annahme) occurs when the offeree indicates theiragreement to the terms of the offer, creating a binding contract between the parties.

This part will explore the definition of a contract and its essential elementsaccording to German law with a specific focus on the concept of contractual offerand its significance in contract formation

2.2.2 Definition of contract and its elements under German law

In German law, a contract (Vertrag) is a legally binding agreement between two ormore parties that creates rights and obligations Freedom of contract(Vertragsfreiheit) is a right protected by the Basic Law”" Contracts do not requireconsideration, can contain whatever the parties agree upon (Inhaltsfreiheit) and,unless specifically required by law, do not have to be in any particular form(Fommffeiheit) Nevertheless, the parties do not have complete freedom as to thecontents of a contract’, nor is the freedom to conclude or not to conclude acontract (Abschlussffetheit) unlimited under the Geman Law

In German Law, most of the rules governing the formation of a contract are found

in Book One, Section III, Title 3 of the Civil Code (§ 145-157) entitled "Contract"(Vertrag), however there is no express provision in the Civil Code to the effect that

a contract comes into existence as the result of an offer and an acceptance.Nevertheless, it is well-settled that an offer and acceptance are required to form acontract and they are the most important elements of a contract similar to TheEnglish law When we break it down to the basis and follow the line of contract

runlghuez (G6) Art 3) dere Constton,

De, Anha tu Ea Sasuke Kase, A Comparative Study ofthe Fonnaton of Conracs i Jpanese,Eagsh,

sd Gorn Ler 2020 page 217

2

theory recognized worldwide, the contract is formed through the exchange of anoffer by one party and the acceptance of that offer by another party”

In addition, the formation of a contract will require a meeting of the minds of the(two or more) parties in German law The concept of consensus ad idem refers tothe requirement of mutual understanding and agreement between the partiesregarding the essential terms of the contract This principle is codified in Section

145 of the German Civil Code (Burgertiches Gesetzbuch or BGB), which statesthat a contract is formed when an offer is met with an unambiguous acceptancethat corresponds to the offer's terms Such a consensus is usually reached when oneparty makes an offer (Angebot) to the other side, which then accepts it (Annahme)

‘The CISG (Article 14 CISG)” and many other jurisdictions provide similar rules®The division of the contracting phase into ‘offer’ and ‘acceptance’ is a usefultheoretical tool for analyzing the parties’ agreement — even though the contract-making process is often more disorderly As offer and acceptance are declarations

of intent, these three elements are inseparable in any formation of contract underany laws

Another element is “consideration” (Gegenleistung) refers to the reciprocalexchange of value or benefit between the parties to a contract German lawrecognizes the principle of "do ut des," which means "I give so that you may

‘Sup A, Sat, Contract Thươy, 2004 page 167-208

° price 16 of C1SG

LH) “Apropocl for concicng aconnrrtađntaeÄi one or more specific peroneconctintes an ft fit

scent dite end nicest intention ofthe eer tobe boindim case of accept proposal is

‘dio afateitinccate he goods xi gi plicit aes or makes provision for drterabang

‘Be quam atthe price

(@)-4 proposal eter thn one adbesied to one or more specie persons i tobe considered merely as at

‘nition to make ees, tess the conten is inate by De person proposing”

° Kera Sct, Der Vereagsschass 2013) page 130

z

give." Each party must provide something of value, whether it is goods, services,

or money, to create a valid contract The requirement of consideration is notexplicitly stated in the BGB but is generally understood as an implicit element incontractual relationships There is an interesting concept under German law is thatcontracts that are immoral are void because of §138 of the Civil Code which states

"A legal transaction is void if itis contrary to good morals" “Immoral” appears to

be understood by the Geman courts as anything that contravenes the sense ofdecency of every person who possesses an understanding of what is just andequitable"! The case laws in Germany have held that immorality includes, but isnot confined to, sexual immorality Contracts in restraint of trade and contracts thatoppressively restrict a person's independence or economic freedom have also been.held to be immoral and thus void

Legal capacity: The parties involved must have legal capacity, meaning they mustpossess the legal competence to enter into a contract Contracts can only beconcluded by people with the legal capacity to do so Asa general rule, anyone canenter into a contract Exceptions protect persons whose judgment might beimpaired such that it would not appear reasonable to bind them to their declarationslike Minors

2.23 Introduction to the Concept of Offer and Its Role in ContractFormation

2.23.1 The concept of an offer (Angebot)

"nest 6 Larexeen, CAUSA AND CONSIDERATION IN THELAW OF CONTRACT, The Yale Law

Jounal, Vol 29,No.7 (ay 1919) page 621-646

' Boduyingih es Reksgerichs m Zivisachen (R67) RGZAB, 124

Buascwideagmn des Bundesguichashotes m Zeisachen (BGHZ) BGHZ 10,232

"prac 104105 of BCE

2

The concept of an Offer is fundamental to contract formation in German law Anoffer is a promise to contract by which the offeror wants to be bound As anydeclaration of intent, it can be declared expressly (ausdrickiich) or impliedly(konktudent) To be valid, the promise must be sufficiently precise and completeregarding the essential components of the contract (essentialia negotii) Theessential stipulations must at least be ascertainable, so that an acceptance can bedeclared by just saying ‘yes’ or ‘I agree’ — otherwise a contract cannot be

formed What kind of stipulations are deemed essential varies according to the

contract type proposed In a sales contract, at least the price and the item that is put

up for sale must be ascertainable That does not mean that the parties have to fixthe price themselves immediately It is also possible to conclude a contract andagree that one of the parties (§ 315 BGB””) or a third person (§ 317 BGBTM), eg,

an expert, will fix the price for them To avoid over-formalism, the law providesfurther exceptions to the rule of completeness If a client hops into a taxi andinstructs the driver to drive him to the aimport, a contract is formed if the latter does

so despite the parties not having addressed the price for this service Where a

145 BOB iu suggests that en offer refered to inthe code asa Anurag, «propose In academic

Irene thus been defmed as Tụ one-sided declaration of tention hat needs to be viết dể hat ens at

‘he conch of «contrat.

` aus Mckesis, Harms Unberuh & Angus Jonston, The Go Law of Contract: A Comparative Tre

specication of poformance by one Paty

Gitpateemnce ta be speceindby one ofthe contracting pris, thơ incase of doubt isto be tong,

‘hat he specification isto be made atthe reesonbly oxrcied đc im of he party nong

(Q) Me specication i made by declaratio to the her pH,

(@) Where the specication ito be made athe reasonably excised discetion of «pe, the specification made

‘Staudng nthe oterpuuty only fi ogutable 2 isnt equasble Sen he specication mat by puical Aecsion, he sae applies the speciation debyed.

Sect 317

specication of poformance by thưa pH.

(Where specication of pofnnane itt «ted pH, ơn cst of doubt isto be assumed đt thspecification ito bemade athe reasonably exercised discretion of he tard pay

(@y he specifica isamde by mare dan an urd pry, then sa case of dow the agreement of allpais 5

sseceseny; ere a aman to be specied and several noms ae specified den case of doubt, he

verge hon ly

2

person regularly carries out an obligation for remuneration, the parties are deemed

to have tacitly agreed on a price The customer thus has to pay either the regulartariff or — if no such tariff exists — the ‘usual’ remuneration Such rules exist, eg,conceming service contracts (§ 612" BGB) or work contracts (§ 632 BGBTM),

2.2.3.2 Distinguishing with Invitations to Treat

An important distinction in contract law is between an offer and a mere invitation

to treat, also known as invitatio ad offerendum*! While an offer expresses a clearintention to be bound by specific tems, an invitation to treat is a preliminarystatement inviting others to make offers Various scenarios, such as postings ofgoods for sale on a website, advertisements in newspapers or on websites, or thedistribution of advertising materials like catalogues, are typically consideredinvitations to treat This is because the seller usually wants to retain the finaldecision-making power in the contract formation process

For instance, when goods are displayed on shelves in a supermarket, there isongoing debate as to whether this constitutes a binding offer or an invitation tocontract, It is argued that such displays should be treated as invitations to treat, asthe seller intends to reserve the right to accept or reject offers There are severalreasons for this approach For instance, the seller may want to avoid entering into

‘Section 612

—

(@) Remamaretio is deamadto have bon actly agreed nthe crcumstences #5 to be pected tat the

‘vice ietendered only for ronmmnation

(Q) the amount of renameration inet specie thơn Ý «tart exis, he ti roomertion is deemedto be Aged, no wf eats, th teulresndndimn 5 deemadto be aged.

© section 32

Remeron,

.Q) Benstertim for work is deemedto be tacitly agreed if th production of the wok, nthe cumstances, gi

De expected ey neta foramen

(Q) te amount of rammerstion dt pecan «tart exis, the ti ramet is deemedto be

Aged: no tart eases, th uulresstvrutio 5 deemsdto be aged.

rẻ for «comes

- TnợiutØato make mn offer an Geman lo refered to as 'Ao#forlonng mur Abgabe eines Angebot

30

contracts with specific customers, such as those who have not made timelypayments in the past Additionally, the seller may need to check the availability ofthe product, as it could already be sold out by the time a potential buyer expressesinterest Thus, in a supermarket, a contract is generally deemed to be concludedonly when the customer brings the chosen goods to the counter, and the cashieraccepts the offer on behalf of the market

However, the situation differs when it comes to the purchase of fuel at a service station In this case, the contract is considered to be concluded as soon asthe customer begins filling their tank with fuel This early point of contractformation is justified by the mutual interests of both parties involved The sellerhas already provided the product, and the buyer, as they cannot retum the fuel oncedispensed, wants to keep it regardless of whether the seller ultimately intends tocontract with them or not

self-One notable case in German contract law is the "Lederwaren" case decided by theGerman Federal Court of Justice (Bundesgerichtshof), In this case, a customerentered a store and selected a pair of shoes from a display shelf, The customer

‘brought the shoes to the cashier, who refused to sell them at the displayed priceand demanded a higher price The court held that the display of goods on the shelf

‘was not a binding offer but an invitation to treat The customer's act of selectingthe shoes and presenting them to the cashier constituted an offer, and the cashier'sacceptance or rejection of that offer determined the formation of a contract Thecourt emphasized that in a retail setting, the seller typically retains the right toaccept or reject offers made by customers

Another relevant case is the "Brotmaschine" case, which dealt with the sale of a

‘bread-making machine, In this case, an advertisement in a catalog stated the

a