A contract is a legally binding agreement between two or more parties in which each participant

recognizes a legal obligation that must be met. Contracts are utilized in many aspects of daily life,
including buying real estate, applying for a car loan, filling out job paperwork, and agreeing to terms and
conditions for purchasing goods and services, or using computer software. Contract law issues can arise
when one party fails to carry out the legal responsibility to which it has agreed. When one party breaches a
contract by failing to fulfill it, the other party can typically sue for monetary damages or, in rare cases, seek
a court order requiring the breaching party to perform as promised. If contracts are not written correctly,
they may also serve as the foundation for legal disputes. Parties that incorrectly understand the terms of
their contract may file lawsuits against one another and have the matter settled in court. Furthermore, if a
company enters into a contract and subsequently goes out of business or is unable to meet its commitments,
the other party may be forced to seek redress in civil or bankruptcy court.

The problem of the case is Sam received a writer offer from Chung for the purchase of Sam’s
gramophone from Sam. However, Sam did not reply to the letter within two weeks. Then, the letter
expressly stated that if Sam did not reply within two weeks, Chung would presume that Sum had accepted
the offer. Chung now claims that there is a binding contract between him and Sam. The issue, in this case,
is whether there is any binding contract between Sam and Chung.

According to Section 2(a) of Contracts Act 1950, an offer is an expression of willingness to contract
on specified terms, made with the intention that it is to be binding once accepted by the person to whom it
is addressed. There must be an objective manifestation of intent by the offeror to be bound by the offer if
accepted by the other party. Therefore, the offeror will be bound if his words or conduct are such as to
induce a reasonable third-party observer to believe that he intends to be bound, even if in fact he has no
such intention. Furthermore, offers can be addressed to a single person, to a specified group of persons, or
to the world at large. An example of the latter would be a reward poster for the return of a lost pet. An offer
may be made expressly, such as by words or by conduct. An offer must be distinguished from an invitation
to treat, by which a person does not make an offer but invites another party to do so. Whether a statement is
an offer or an invitation to treat depends primarily on the intention with which it is made. An invitation to
treat is not made with the intention that it is to be binding as soon as the person to whom it is addressed
communicates his assent to its terms. Common examples of invitations to treat include advertisements or
displays of goods on a shelf in a self-service store.

A bilateral contract is an agreement that stipulates that both sides can agree to keep their end of the
deal. Bilateral contracts frequently require an equal commitment or payment from the offeror as well as the
offeree, though this may not always be the case. In more complex situations, such as international trade
negotiations, the bilateral contract may qualify as a so-called "side deal." In other words, two different
parties may conclude that a particular contract suited to their shared interests is required even though they
are both parties to the entire negotiations. Therefore, in this case, there is no binding agreement between
Sam and Chang about purchasing Sam’s antique gramophone.

The offer is a proposal made by one person to another. The offer creates a legal relationship between
these two people once the offeree accepts. The contract law will come by the two parties; these are the
offeror and the offeree. The definition of the offeror is the party who makes the offer. And the offeree is the
person who either accepts or does not accept the offer. So, for there to be an agreement, there must be three
things: an offeror, an offeree, and of course, an offer.

An offeror is someone who makes or participates in making an offer. It does not include any
supervised financial institution or broker-dealer that loans funds to an offeror in the usual course of
business, as well as any attorney, accountant, consultant, employee, or another person who gives
information or advice to an offeror or performs ministerial responsibilities for an offeror but does not
otherwise engage in the offer. The offeree is the individual who accepts or declines the offer. when the
offeree conveys his or her consent (acceptance) of the offer. In other words, it occurs when the offeree tells
the offeror, "Okay, my buddy, your offer appeals to me. Let's get started "or “Sorry, my buddy, I want to
reject your offer.” , then only the person is known as the offeree. In the case between Sam and Chung,
Chung wants to buy Sam’s gramophone and make a written offer to send to Sam. So Chung is the offeror
and Sam is the offeree.
The first limb of section2(c) of the Contracts Act describes the person making the proposal as a ‘Promise’.
Under the Contracts Act and English Law, a proposal or offer is something that is capable of being
converted into an agreement by the acceptance of the offer. A proposal must be a definite promise to be
bound provided certain specified terms are accepted. The promisor must have declared his readiness to
undertake an obligation upon certain terms, leaving the option of its acceptance or refusal of the offer.

An offer that has been canceled or terminated is referred to as being revoked. A proposal may be
withdrawn by the offeror at any moment until the offeree sends the message of acceptance, but not after
that. However, the offeree may change his mind at any point before the offeror receives the message
communicating it, but not after. After the period of time set out by the offeror. The offer may also be
refused after a fair period of time has been indicated in cases where no time has been specified. Section
4(1) contracts Act states that the communication of a proposal is complete when it comes to the knowledge
of the person to whom it is made the communication of an acceptance is complete. For example, the case R
v Clarke [1927]. In this case, the question was whether using the defense of insanity was permissible when
the defendant was depressed and briefly lost their memory. Following the law on the communication of the
offer, Chung sent a written offer to Sam but Sam did not reply. So Sam still can reject the offer.

Section 2(b) of the Contracts Act of 1950 governs acceptance. This legislation states that an
acceptance is a final and unconditional indication of approval of the terms of an offer. Again, the recipient
of the offer must objectively demonstrate a desire to be bound by its terms. An offer must be accepted in
line with its exact conditions to constitute an agreement. It must be like the offer, as well as all terms must
be accepted. For example, in the case, LAU BROTHERS & CO. v CHINA PACIFIC NAVIGATION CO.
LTD (1965), In this case, the delivery of logs were discussed through a series of telegrams and letters. The
defendant withdrew while the case was still being negotiated. The question is whether the parties made a
contract. The court ruled that the parties were still negotiating and that no agreement had been reached. As
a result, the defendant's decision to withdraw was warranted.

Section 4(2) of the Contracts Act of 1950 is the law of the acceptance of communication. The offeree
must be disclosed to the offeror under such a law. It goes into effect when the offeror learns of the
acceptance. Silence can never be accepted until it demonstrates that acceptance was meant. "Felthouse v
Bindley (1860)" is a landmark case in Contract law that holds that one cannot impose an obligation on
another to reject one's offer, and that "silence cannot amount to acceptance." The circumstances of this case
were later examined since the evidence demonstrated that the acceptance was communicated. In this case,
Sam and Chung didn’t have a contract between them because they are not in communication.

Consequently, combining the above arguments, the cases provide that the relationship between
Chung and Sam in the contract law is not valid. In the end, there is no contract bound Chung and Sam due
to the fact that they did not have communication. They are still in the negotiation stage so Sam still can
reject the offer.
Reference

 https://www.findlaw.com/hirealawyer/choosing-the-right-lawyer/contracts-law.html
 https://www.lawinsider.com/dictionary/offeror
 https://www.lawinsider.com/search?q=offeree
 https://www.vedantu.com/commerce/communication-of-offer-and-acceptance-and-revocation-of-offer
 https://www.rocketlawyer.com/business-and-contracts/business-operations/legal-guide/whats-the-
difference-between-bilateral-and-unilateral-contracts
 https://www.adobe.com/sign/hub/document-types/what-is-bilateral-contract