3-1. Agreement Flashcards
Weeks 1-2
Contracts
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.
Offers
A valid offer must be:
- 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.
- COMMUNICATED TO THE OFFEREE (Taylor v Laird)
- In writing, orally, or by conduct. - 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).
Issues with ‘Offers’
- INVITATIONS TO TREAT
- OPTION CONTRACTS
- COUNTER-OFFERS/RforI
- TERMINATION
IwO: Invitations to Treat
An expression of willingness to enter into negotiations. Not offers!
IwO: Invitations to Treat - Ads
GR: Ads are invitations to treat (Partridge v Crittenden)
EXCEPTIONS:
- 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. - Unilateral offers (Carlill v Carbolic Smoke Ball Co.)
- Offer made if SUFFICIENTLY CERTAIN and shows INTENTION TO BE BOUND.
IwO: Invitations to Treat - Display of Goods
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.
IwO: Invitations to Treat - Auctions
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 Acceptance at fall of hammer, offer can be withdrawn anytime before this acceptance.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:
- 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.
IwO: Invitations to Treat - Tenders
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).
IwO: Invitations to Treat - Websites
GR: treated the same as ads or display of goods.
- Snapping up of pricing errors not valid offer.
IwO: Counter-Offers and RforIs.
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)
IwO: Termination of an Offer
Termination of an offer may occur through:
- Rejection
- Revocation
- Lapse
IwO: Termination of an offer - Rejection
Rejection can occur through:
- Outright rejection by offeree.
- Unaccepted C-O made by offeree.
IwO: Termination of an Offer - Revocation
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.
IwO: Termination of an Offer - Lapse
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)
Acceptance
Acceptance must be:
- MIRROR IMAGE of offer (Hyde v Wrench)
- Unqualified and correspond with terms. - Made by the OFFEREE (Boulton v Jones)
- one cannot accept an offer made to someone else. - In RESPONSE/KNOWLEDGE of the offer (R v Clarke)
- 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.) - Motive for ACC is irrelevant (Williams v Carwardine).
- Cannot be a ‘Snap-up’ of an offer made in error (Hartog v Colin & Shields).
The Postal Rule
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).
The Postal Rule: Exceptions
- 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.
- It was UNREASONABLE to use the post, i.e. if Acc must be prompt (Quenerdaine v Cole).
- Where applying the rule would cause ‘manifest inconvenience and absurdity’ (Holwell Securities v Hughes).
- Where OUSTED, ‘by notice in writing’ (Holwell Securities v Hughes).
The Postal Rule: Revocation of Postal Acceptance
No GR here, on balance it seems like retraction is impossible.
- Commonwealth: No scope for revocation (Wenkheim v Arndt) NZ case.
- (Dunmore v Alexander), Scottish case. Successful revocation. Disapproved later in (Thomson v James).
- 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.
The Postal Rule: Instantaneous Communication
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
Prescribed Mode
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)
