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Contract Law > 3-1. Agreement > Flashcards

3-1. Agreement Flashcards

Weeks 1-2

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1
Q

Contracts

A

BILATERAL CONTRACT: Promises made by both parties to do/refrain from doing something in exchange for the other party’s undertaking.

UNILATERAL CONTRACT: ONE party undertakes to do/refrain from doing something if the other party performs a specified action.

For a contract to exist, there must be a valid offer and acceptance.

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2
Q

Offers

A

A valid offer must be:

  1. CLEAR and CERTAIN (Storer (“will” YES) cf. Gibson (“may” NO) v Manchester CC). Phrases like “10 or nearest offer” or “a price to be determined” are NOT sufficient.
  2. COMMUNICATED TO THE OFFEREE (Taylor v Laird)
    - In writing, orally, or by conduct.
  3. OPEN, i.e. not terminated.

Judged objectively: the offeror is “bound if his words or conduct…induce a reasonable person to believe that he intends to be bound” (Smith v Hughes).

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3
Q

Issues with ‘Offers’

A
  1. INVITATIONS TO TREAT
  2. OPTION CONTRACTS
  3. COUNTER-OFFERS/RforI
  4. TERMINATION
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4
Q

IwO: Invitations to Treat

A

An expression of willingness to enter into negotiations. Not offers!

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5
Q

IwO: Invitations to Treat - Ads

A

GR: Ads are invitations to treat (Partridge v Crittenden)

EXCEPTIONS:

  1. Manufacturer’s Exception (Grainger v Gough, OD Lord Herschell)
    - if offeror makes goods on offer/large supply, ad (brochure or price lists) MAY constitute an offer.
  2. Unilateral offers (Carlill v Carbolic Smoke Ball Co.)
    - Offer made if SUFFICIENTLY CERTAIN and shows INTENTION TO BE BOUND.
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6
Q

IwO: Invitations to Treat - Display of Goods

A

GR: a display of goods is an ItoT, even when goods displayed as been “on offer” (Fisher v Bell)

  • Offer made by presentation of goods at till. (Pharma. Soc. v Boots)
  • Acceptance made by cashier.
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7
Q

IwO: Invitations to Treat - Auctions

A

GR: auctioneer’s request for bids is an ItoT.
- offer made when bidder places bid, auctioneers free to accept or reject. Acceptance at fall of hammer, offer can be withdrawn anytime before this acceptance. (Payne v Cave)

EXCEPTION:

  1. Auctions Without Reserve (Barry v Davies).
    - Unilateral offer from auctioneer, highest bidder accepts the uni. offer when placing highest bid.
    - If auc. refuses to sell, bidder can sue for the value of the goods, but NOT the goods themselves. A separate bilateral contract.
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8
Q

IwO: Invitations to Treat - Tenders

A

GR: Tenders are ItoT (Spencer v Harding).

EX 1: Offeror makes express promise to accept highest bid.

  • Creates a unilateral offer to enter into a contract with the highest bidder (Havela Investments v Royal Trust Co.)
  • Offers submitted meeting set requirements MUST BE CONSIDERED (Blackpool and Fylde Aero Club v Blackpool BC).
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9
Q

IwO: Invitations to Treat - Websites

A

GR: treated the same as ads or display of goods.

- Snapping up of pricing errors not valid offer.

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10
Q

IwO: Counter-Offers and RforIs.

A

COUNTER-OFFER: an attempt to accept an offer on new/different terms by changing key term in the offer. (such as the price) (Hyde v Wrench)

  • Rejects the original offer, becomes capable of acceptance.
  • Last counter-offer to be accepted will prevail (Butler Machine Tool v Ex Cell O).

REQUESTS FOR FURTHER INFORMATION: an enquiry made in interrogatory language regarding ancillary aspects of the offer.
- no effect on the original offer, it remains open. (Stevenson Jacques v Mclean)

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11
Q

IwO: Termination of an Offer

A

Termination of an offer may occur through:

  1. Rejection
  2. Revocation
  3. Lapse
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12
Q

IwO: Termination of an offer - Rejection

A

Rejection can occur through:

  • Outright rejection by offeree.
  • Unaccepted C-O made by offeree.
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13
Q

IwO: Termination of an Offer - Revocation

A

Revocation rules vary if BI or UNI offer.

BILATERAL: Rev can occur any time before acceptance. (Payne v Cave)

  • Must be communicated (Byrne v Van Tienhoven), can be through a 3rd party (Dickinson v Dodds) although Trietel dislikes (unfair burden on offered - have to decide whether reliable 3rd party or not).
  • Method of revocation is IRRELEVANT, so long as clear intention to revoke has been demonstrated and this is received.

UNILATERAL: Rev can occur any time before complete performance. (GNR v Witham).

  • EXCEPTIONS: Offeror cannot withdraw once performance begun (Errington v Errington & Woods), can’t prevent offeree from completing. (Daulia v Four Milbank Nominees).
    2. Equal Notoriety Rule. Rev must have same notoriety as original offer.
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14
Q

IwO: Termination of an Offer - Lapse

A

Lapse can occur via…

The Passage of Time (Ramsgate Victoria Hotel v Montefiore)

  • If PRESCRIBED period, lapse if not within.
  • If NOT PRESCRIBED, lapse if no acceptance within “reasonable time” - contextual.

Death

  • of OFFEROR, lapse if offeree made aware before acceptance. (Bradbury v Morgan)
  • of OFFEREE, offer lapses, estate cannot accept. (Duff’s Executors’ Case)

Non-Fulfilment of a Condition

  • Lapse if failure to comply with attached conditions.
  • Conditions can be IMPLIEDLY attached (Financings v Stimson)
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15
Q

Acceptance

A

Acceptance must be:

  1. MIRROR IMAGE of offer (Hyde v Wrench)
    - Unqualified and correspond with terms.
  2. Made by the OFFEREE (Boulton v Jones)
    - one cannot accept an offer made to someone else.
  3. In RESPONSE/KNOWLEDGE of the offer (R v Clarke)
  4. COMMUNICATED (Felthouse v Bindley)
    - can be via authorised 3rd party (Powell v Lee)
    - can be via conduct (Taylor v Allon)
    EXCEPTIONS:
    - Uni Offer, waived by performance of specified act (C v CSB Co.)
    - Postal Rule, see below.
    - If fault in comms is due to offeror (Entores v Miles Far East Corp.)
  5. Motive for ACC is irrelevant (Williams v Carwardine).
  6. Cannot be a ‘Snap-up’ of an offer made in error (Hartog v Colin & Shields).
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16
Q

The Postal Rule

A

GR: Acc occurs at the moment communication is POSTED (Adams v Lindsell).

NB: deals with WHEN acceptance is received, Prescribed mode deals with HOW acceptance is received.

  • Must be PROPERLY posted i.e. into an official post box/postal employee able to do so (Re London and Northern Bank ex p Jones).
  • Irrelevant if destroyed, lost or delayed (Household Fire v Grant)

ONLY APPLIES TO ACCEPTANCE LETTERS, not letters of revocation (Byrne v Van Tienhoven).

17
Q

The Postal Rule: Exceptions

A
  1. Misaddressed by offeree (Getreide-Import Gesellschaft v Contimar). Where this occurs, the letter will be deemed to arrive at the least favourable time for the party responsible.
  2. It was UNREASONABLE to use the post, i.e. if Acc must be prompt (Quenerdaine v Cole).
  3. Where applying the rule would cause ‘manifest inconvenience and absurdity’ (Holwell Securities v Hughes).
  4. Where OUSTED, ‘by notice in writing’ (Holwell Securities v Hughes).
18
Q

The Postal Rule: Revocation of Postal Acceptance

A

No GR here, on balance it seems like retraction is impossible.

  1. Commonwealth: No scope for revocation (Wenkheim v Arndt) NZ case.
  2. (Dunmore v Alexander), Scottish case. Successful revocation. Disapproved later in (Thomson v James).
  3. Academics: Revocation would contravene PR.
    - would put offeree in powerful position, should both be limited by PR, not just offeror.
    - So long as arrives before Acc letter, AND no disadvantage to offeror.
19
Q

The Postal Rule: Instantaneous Communication

A

No GR, but the ‘receipt rule’ from (Entores v Miles Far East Corp.) establishes:

  • Acc when RECEIVED by offeror.
  • If offeror responsible for not receiving, contract forms. Receipt then takes place when would have been reasonable to have received.
  • if offeree responsible for communication failure, no contract.

OFFICE HOURS

  • If sent OUTSIDE OHs, Acc at beginning of OHs next working day (Mondial Shipping v Astarte).
  • If sent WITHIN OHs, Acc on receipt (The Brimnes).
  • ‘OHs’ is dependent on context (Thomas v BPE Solicitors
20
Q

Prescribed Mode

A

Offerors are ENTITLED to prescribe a mode of acceptance (Manchester Diocesan v Commercial & General Investments)

  • Must be explicitly mandatory, if not then any equal method will suffice (Tinn v Hoffman and Co.)
  • – high burden for explicitly mandatory. Essentially, only words like “no other method will bind me” will suffice (Tinn v Hoffman OBITER). Must wholly rid any alternative mode of communication.

Offeree may waive mode if it is for his benefit and if it does not disadvantage offeror (Yates Building Co v Pulleyn)

Contract Law (6 decks)

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