In everyday life, contracts for the purchase and sale of goods are formed by the sum of an offer and an acceptance, and in special cases, by the realization of intentions or cross offers. Various situations must be considered, such as when the contract is formed, whether the acceptance is notified, and delays, and after the contract is formed, issues of obligation fulfillment and damages may arise.
In everyday life, it is common to buy other people’s goods or sell your own goods. These transactions with others require certain agreements or promises, which are called contracts. Contracts are usually formed by a combination of an offer and an acceptance, but they can also be formed by expressions of intent or cross-offers. Because contracts are legally binding, the process and requirements for their formation are very important.
In a contract, the proposal to form a contract is called an offer, and the acceptance of the offer by the recipient is called an acceptance. If the recipient of the offer demands that the offer be changed, a new offer is made. When the contract formed by the combination of an offer and an acceptance is made by real-time communication, the contract is formed when the offeror hears the acceptance from the offeree. However, in the case of a contract between persons who are unable to communicate in real time, the contract shall be deemed to be concluded at the time when the expression of acceptance is sent to the offeror. In this case, the contract shall not be effective if the expression of acceptance does not reach the offeror within the acceptance period. There may be cases where the expression of acceptance is delayed due to unavoidable reasons that are not the fault of the acceptor. In this case, if the offeree does not immediately notify the acceptor of the delay, the acceptor will consider the acceptance to have been delivered to the offeree within the acceptance period, and the contract will be effective.
In this process of contract formation, trust and good faith between the parties are important. The parties must clearly communicate their intentions and fulfill their responsibilities. For example, a real estate contract requires precise performance at each stage, such as making a down payment, paying the balance, and transferring ownership. If either party fails to fulfill their obligations, it can lead to legal disputes.
Although less common, there are some contracts that do not require notice of acceptance due to the nature of the offeree’s expression of interest or trade custom. For example, if an offer is made to reserve a hotel room through the Internet, and the hotel provides the room without notifying the offeror of the offer. In this way, a contract is formed when there is a fact that is recognized as an indication of acceptance without a notice of acceptance, and the contract is formed when the fact occurs. This is called the formation of a contract by realization of intention. In addition, even if there are only two offers, a contract is formed if the contents of the expressions of intent are consequently consistent, which is called the formation of a contract by cross-offer. For example, at a meeting, A and B each want to sell and buy a car, and after learning about each other’s desire to buy, A sends an offer to B to sell a car for 10 million won. If, before it reaches B, B sends A an offer to buy the car for 10 million won, the contract is formed when both offers reach A and B.
In the process of forming these contracts, there may be circumstances that make it impossible to fulfill the contract, such as the object of sale being destroyed by fire. If the offeror knew or could have easily ascertained at the time the contract was formed that the object of sale was missing and did not check it, and the acceptor did not know or could not have known that the object of sale was missing, the offeror shall compensate the acceptor for the damages incurred by the acceptor in believing that the contract was valid, such as expenses or interest costs incurred in assuming the validity of the contract. The amount of compensation may not exceed the profit that would have accrued to the acceptor if the contract had been fulfilled, such as the difference between the sale price and the market price.
Even after the contract is formed, the parties must fulfill their obligations. For example, in a contract of sale, the main obligations are to deliver the goods and pay the price. If one party fails to fulfill these obligations, the other party can cancel the contract and claim damages. Therefore, it is essential that the parties to a contract are able to honor their commitments and deal with any issues that arise. This is important for the reliability of the transaction and for maintaining a smooth business relationship in the long run.
Contracts are an integral part of our daily lives. With the right contracts in place and enforced, we can have more stable and reliable transactions. When entering into a contract, it’s always a good idea to review it carefully and, if necessary, seek professional help to avoid unnecessary disputes.
