2.5. Unilateral and Bilateral Contracts

The typical model of the bilateral contract arises where A promises to sell goods to B in return for B promising to pay the purchase price. In this situation, the contract is bilateral, because as soon as these promises have been exchanged, there is a contract to which both arc bound. In relation to services, the same applies, so that an agreement between A and B that B will dig A’s garden for £20 next Tuesday is a bilateral agreement. Suppose, however, that the arrangement is slightly different, and that A says to B “If you dig my garden next Tuesday, I will pay you £20”. B makes no commitment, but says, “I am not sure that 1 shall be able to, but if I do, I shall be happy to take £20”. This arrangement is not bilateral. A has committed himself to pay the £20 in certain circumstances, but B has made no commitment at all. He is totally free to decide whether or not he wants to dig A’s garden or not, and if he wakes up on Tuesday morning and decides that he just does not feel like doing so, then there is nothing that A can do about it. If, however, B does decide to go and do the work that will be regarded as an acceptance of A’s offer of £20 and the contract will be formed. Because of its one-sided nature, therefore, this type of arrangement is known as a “unilateral contract”. Another way of describing them is as “if” contracts, in that it is always possible to formulate the offer as a statement beginning with the word “if”: for example, “if you dig my garden, I will pay you £20”. As has been noted above, the arrangements in Carlill and Lefkowitz were of this type: “If you use our smoke ball and catch influenza, we will pay you £100”; “If you are the first person to offer to buy one of these coats, we will sell it to you for $1”.

2.8. Acceptance

The second stage of discovering whether an agreement has been reached under classical contract theory is to look for an acceptance which matches the offer which has been made. No particular formula is required for a valid acceptance. As has been explained above, an offer must be in a form whereby a simple assent to it is sufficient to lead to a contract being formed. It is in many cases, therefore, enough for an acceptance to take the form of the person to whom the offer has been made simply saying ‘yes, I agree’. In some situations, however, particularly where there is a course of negotiations between the parties, it may become more difficult to determine precisely the point when the parties have exchanged a matching offer and acceptance. Unless they do match exactly, so the classical theory requires, there can be no contract. An ‘offer’ and an ‘acceptance’ must fit together like two pieces of a jigsaw puzzle. If they are not the same, they will not slot together, and the picture will be incomplete. At times, as we shall see, the English courts have adopted a somewhat flexible approach to the need for a precise equivalence. Nevertheless, once it is decided that there is a match, it is as if the two pieces of the jigsaw had been previously treated with ‘superglue’, for once in position it will be very hard, if not impossible, to pull them apart.