‘Agreement’ is central to the law of contract in England and Wales. In most cases that are adjudicated, the court regards its role as giving effect to an agreement reached between the parties. The question of whether such an agreement has been formed is, therefore, a crucial one. This chapter is concerned with the mechanisms that the courts use to decide whether an agreement has been reached. The main areas covered are as follows:

Formalities. To what extent does the law of England and Wales use formal mechanisms to decide whether an agreement has been reached? Generally, this will be where a ‘deed’ is used or where a statute requires formality, such as putting the agreement into writing, in relation to a particular type of contract.

More generally there is no requirement of writing or other formality. The courts decide whether an agreement has been reached by looking at what the parties have said or done as indicators of whether they intended to make an agreement.

The most common indicators will be a matching ‘offer’ and ‘acceptance’. The identification of a matching offer and acceptance is the most common way for the courts to find that an agreement has been made.

An offer must be distinguished from an invitation to treat, and an acceptance from a counter-offer.

Particular problems arise in relation to the following:

Unilateral (as opposed to bilateral) contracts. The offer in a unilateral contract (for example, an offer of a reward for the return of property) may be made to the world and the acceptance usually takes the form of performing an action (for example, the return of the property).

The ‘battle of the forms’. Where parties both try to contract on their own standard terms, and these are inconsistent, which should prevail?

Contracting at a distance. If the contract is made by letter, fax, email or over the web, when and where does it take effect? Special rules apply to posted acceptances, as opposed it seems to those communicated by telephone or electronically.

Revocation of offers. An offer can generally be revoked at any time before it is accepted, provided that the revocation is communicated to the offeree.

Certainty. The courts require an agreement to be sufficiently ‘certain’, and will not generally enforce an ‘agreement to agree’.