CONTRACT LAW — Formation of Contract — Offer and Acceptance — Counter-Offer
Ratio Decidendi
Per Fabiyi, JSC, in Bilante Int'l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at pp. 4—5; Paras B—D:
"To constitute a binding contract between parties, there must be a meeting of the mind often referred to as consensus ad idem. The mutual consent relates to offer and acceptance. An offer is the expression by a party of readiness to contract on the terms specified by him which if accepted by the offeree gives rise to a binding contract. The offer matures to a contract where the offeree signifies a clear and unequivocal intention to accept the offer. … The acceptance must correspond with the term of the offer. If it purports to qualify the offer, it may amount to a counter-offer and not an acceptance. It may amount to rejection of the offer. It also destroys that offer so that cannot subsequently be accepted."
Explanation / Scope
This principle establishes that a binding contract requires consensus ad idem, an offer, and acceptance corresponding to the offer’s terms. A qualified acceptance amounts to a counter-offer, which rejects and destroys the original offer so it cannot subsequently be accepted. The principle applies in contract formation. It ensures that acceptance is unconditional. The principle reflects the requirements for offer and acceptance. It prevents qualified acceptance from creating a contract. The court must require correspondence. The principle provides guidance on offer and acceptance.