Offer and acceptance

For a contract of employment to come into existence, it is essential that the potential employer makes what the common law recognises as an “offer” to enter into legal relations, and that that offer be “accepted” by the potential employee. So long as they possess the requisite legal character, both the “offer” and the “acceptance” can be made and communicated in either a formal or informal manner.

Authored by Nicholas Ellery, Partner, and Alannah Hogan, Lawyer, Corrs Chambers Westgarth. Updated by the LexisNexis Legal Writer team.

For a contract of employment to come into existence, it is essential that the potential employer makes what the common law recognises as an “offer” to enter into legal relations, and that that offer be “accepted” by the potential employee. So long as they possess the requisite legal character, both the “offer” and the “acceptance” can be made and communicated in either a formal or informal manner.

Offer

An offer entails the communication of a preparedness to contract on specified terms, with the intention that acceptance of the offer will give rise to legal obligations upon both parties.

An offer can sometimes be made in a highly informal manner, such as an oral statement to the effect “the job’s yours if you want it”.

It can be made in a more formal manner, including by means of:

• a formal letter of offer, with a written contract to follow;
• the presentation (with or without a letter of offer) of a draft contract of employment;
• a series of e-mails or other correspondence; or
• communication through an agent (such as a recruitment company).

To be valid, an offer must be clearly communicated to the person to whom it is directed. Normally, this will be an identifiable individual, but sometimes may be a class or group of people who are clearly and unequivocally identified — eg, in a transfer of business situation, Company B may offer employment to all employees of Company A who fall into a defined category.