1. Agreement Flashcards
DEF: Offer
‘an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed’
DEF: Offer (Expression)
An ‘expression’ may take many different forms eg a letter, newspaper advertisement, email, text message and even conduct, as long as it communicates the basis on which the offeror is
prepared to contract.
DEF: Offer (Intention)
Need not mean actual intention
- Courts objective opinion, looking at what was said and done and what a reasonable person would decide
DEF: Offer (the person to whom it is addressed)
You can only accept an offer that was addressed to you
DEF: Invitations to Treat
Statements inviting negotiation (ie. I am thinking of selling my car with potential asking price of X)
Where is an offer concluded at the supermarket?
Checkout
Are goods on display in a shop an offer or invitation to treat?
goods on display are simply an invitation to treat ie an invitation to select the goods and put them in your trolley. If you later change your mind and decide you do not want the goods then you
can put them back without obligation.
Are advertisements an offer or invitation to treat?
Generally: invitation to treat. if such
advertisements were offers, it would mean that anyone asking for the advertised goods would be accepting and that would be a problem if the advertiser had run out of stock.
Adverts of Rewards: Offers or Invitations to treat
An offer: promises to pay the reward if the specific condition is satisfied. This is a unilateral contract.
When is an offer accepted at an Auction?
When the auctioneer’s gavel does down, this accepts the last bid which is an offer. Auctioneer inviting bids is an invitation to treat
Auctions sold with vs without reserve
(1) with reserve, there is a price the good must go for (minimum) that bidders do not know, if bids do not reach this it will be withdrawn
(2) without reserve, the auctioneer makes a unilateral contract with person making the higher bid
If a item is withdrawn from sale in an auction without reserve, who should the highest bidder sue?
The auctioneer - not the owner of the property, they have not made a contract because the bid was not accepted
DEF: Tenders
Invitation to companies to submit ‘tenders’ for work, this is an invitation to treat (tender = offer)
Tenders: company has promised to accept lowest, or impliedly promised to consider all conforming tenders - has a contract been formed?
Yes, offer of unilateral contract (by tender giver) which the company has to comply with
DEF: Agreement
Unqualified expression of assent to the terms of the offer
How can acceptance of an offer be communicated, by who
(1) By words or conduct (for unilateral, always conduct)
(2) Offeree or authorised agent
Can silence amount to acceptance?
If silence is coupled with conduct that clearly signifies acceptance when viewed objectively then YES (Re Selectmove)
- But generally, silence is not binding
What does it mean for acceptance to be ‘unqualified’?
A conditional response does not suffice, conditional responses are counter-offers
DEF: Counter offer
Destroys original offer and represents a new offer which other party can accept or reject (eg. passing terms and conditions back and forth)
DEF: The Postal Rule + conditions
(1) A letter of acceptance will be effective even if letter is lost in the post
(2) reasonable to use the post
- letter was properly addressed, stamped, ad posted
- postal rule had not been excluded by offeror
When is the postal rule not applicable?
When offerer has stipulated and implied that they need to be notified in writing or told of acceptance (letter sent would only be ‘effective’ if received)
General Rule: Termination
An offer cannot be accepted once it has been terminated
Methods of Termination of an Offer
(1) rejection by offeree
(2) revocation (ie withdrawal) of offer by offeror
(3) Lapse of Time
Termination: Rejection
May be expressly or impliedly, impliedly if offeree makes counter offer
When can revocation of an offer occur? Any exceptions?
Any time before acceptance even if offeror promised to keep offer open for a certain period of time
(2) Exception: if offeree gave something in return for the promise to keep the offer open, this has to be followed
Revocation of a unilateral contract - when can this occur?
Generally, partial performance of a unilateral contract is sufficient to prevent revocation (implied promise not to revoke if act started within reasonable time)
How must revocation be communicated?
General Rule: electronic revocation occurs when it ‘should’ have been read (The Brimnes)
How can an offeree revoke an offer sent to the public at large?
Publish a notice of revocation in the (1) same place as original offer and with (2) same prominence
Who can give notice of revocation of an offer?
Either offeror or reliable third party (objective standard)
Does the postal rule apply for revoking an offer?
No
When will an offer lapse due to ‘lapse of time’?
(1) after specified time (in offer) or
(2) reasonable time taking into account services (ie. perishable vs non-perishable goods)
What factors will be taken into account when judging whether parties have reached ‘complete agreement’ to the deal
Objectively, in the context of the circumstances:
(1) whether parties are in the same trade
(2) trade usage
(3) whether the arrangement has been acted on for any length of time
(4) whether there is an objective mechanism for resolving uncertainty (ie. arbitration clause)
Aim of contractual damages
To compensate the innocent party for the loss of the bargain (difference between price they would have paid vs market value)
