HOW TO MAKE A VALID OFFER UNDER GHANAIAN LAW

A valid offer under Ghanaian law is a clear and final expression of willingness to enter into a binding legal agreement once accepted. It must be clear, unambiguous, final, and legally capable of forming a contract. Courts assess whether a statement is an offer by applying the objective test. This means the court asks what a reasonable person with knowledge of the facts would conclude from the words and conduct of the parties.

A final offer leaves nothing open for future negotiation. Once acceptance occurs, every term becomes binding. If key terms are left uncertain or the maker of the statement is not ready to be bound, the statement is not an offer but an invitation to treat.

An invitation to treat is simply an invitation for others to make offers. It is not binding and cannot be accepted to form a contract. Common examples include advertisements, displays of goods, tender notices, auction announcements, and proposal letters that merely invite applications.

CASES ILLUSTRATING VALID OFFERS AND INVITATIONS TO TREAT

In the case of Gibson v Manchester City Council[1], the council sent tenants a letter inviting them to apply to buy their homes. The letter stated that it should not be regarded as a firm offer. Gibson asked for a reduction in price and later attempted to accept the original terms. The court held that there was no offer because the council’s letter was only an invitation for tenants to apply. Since there was no final and binding expression of willingness to sell, no contract was formed. This goes to show that the wording is very important when ascertaining a valid offer and an invitation to treat.

In the case of NTHC Ltd v Antwi[2], the company wrote to employees stating that staff bungalows were being offered for sale at a fixed price with a clear deadline for acceptance. The employee accepted in writing and only asked for payment instructions.  In resolving the matter, the Supreme Court reiterated key principles of contract formation under Ghanaian law: (1) an offer must be precise and leave nothing essential open for further negotiation; (2) acceptance must correspond exactly to the offer; and (3) mere inquiries about performance or implementation do not nullify an otherwise valid acceptance. The employee’s response was a valid acceptance, and the contract was complete.

In the case of Carlill v Carbolic Smokeball[3], the company advertised that it would pay money to anyone who used its product as directed and still contracted influenza. The court held that this advertisement constituted a unilateral offer because the terms were clear and the company demonstrated an intention to be bound by depositing money into a bank account. The performance of the conditions under the contract also constituted valid acceptance since it was a unilateral contract.

In the case of Fisher v Bell[4], a shopkeeper displayed a knife in his shop window and was charged with offering it for sale. The court held that a display of goods is not an offer but only an invitation for customers to make offers.

In the case of Perbi v Attorney General[5], the government invited tenders to supply food items to a hospital. The plaintiff’s tender was accepted, and he supplied the goods. The government later attempted to terminate the arrangement abruptly. The court held that acceptance of the tender created a binding contract requiring the government to purchase items needed during the agreed period. The nature of the terms showed that the parties intended a binding agreement and not a mere standing offer.

ILLUSTRATIVE CHECKLIST FOR MAKING A VALID OFFER

To determine whether a statement is a valid offer under Ghanaian law, ask:

1. Are the terms clear, definite, and unambiguous
2. Would a reasonable person view the statement as a final commitment
3. Does the statement show readiness to be bound immediately upon acceptance
4. Are all essential terms included without leaving room for further negotiation
5. Is the language consistent with an offer and not an invitation to treat
6. Is the offer communicated to the correct person
7. Is the offer capable of creating a lawful contract

If the answer to these questions is yes, the statement is likely to be a valid offer.

ILLUSTRATIVE PRACTICE CASE STUDIES

Case Study One

A real estate company sends Ama a letter stating that it is willing to sell her a specific plot of land for three hundred thousand cedis and asks for acceptance within five days. Ama writes back accepting the price and asking for the company’s bank details. The company later argues there was no contract. Ama’s inquiry is only a request for information. The letter was clear and final, and her acceptance completed the contract.

Case Study Two

Kofi sees an advertisement stating that laptops are on sale at a discounted price. He goes to the shop and demands one at the advertised price. The shop declines. The advertisement is only an invitation to treat. It invites customers to make offers. The shop is free to accept or reject them.

Case Study Three

A government agency publishes a tender notice for the supply of uniforms. Kwame submits a tender. The agency writes back formally accepting his tender and agreeing to purchase all uniforms required for six months. A month later, the agency cancels the arrangement. Since the tender was accepted, a binding contract exists. The cancellation amounts to a breach.

[1] [1979] 1 WLR 294; 1 All ER 972

[2] [2009] GHASC 5

[3] [1893] 1 QB 256; [1891-4] All ER Reprint 127

[4] [1961] 1 QB 394; [1960] 3 All ER 731; [1960] 3 WLR 919

[5] [1974] 2 GLR 167