6 Contract Formation

Question 1

Adams v Lindsell (1818)

Answer 1

Introduction of the postal rule, but involved fault

Also raises the more general question of whether an offeror can change their mind and withdraw the offer before the contract has been formed.
Held that they can because a contract is not formed until acceptance is communicated - an offer may be withdrawn or revoked at any time until it has been accepted

Question 2

Dickinson v Dodds (1876)

Answer 2

Revocation
CoA held:
(1) the statement that the offer would be left open until friday was not binding because it was made without consideration
(2) the held that an offer could be withdrawn at any time until it was accepted - it is sufficient if he has knowledge of it, regardless of how he acquired the knowledge
Eg from a third party

Question 3

Carlill v Carbolic Smoke Ball Co [1893]

Answer 3

Leading case on unilateral contracts
Flu case
CoA held that there was a contract on the basis that the company by their advert had shown sufficient intention to be bound, especially by their statement that money had been deposited in the bank

Question 4

Fisher v Bell 1961

Answer 4

Displays
High Court held that the display of a flick knife in a shop window did not violate the prohibition on ‘offers for sale’
Merely an invitation to treat
Criminal case but raised questions in contract law - whether the display was an offer

Question 5

G Percy Trentham Ltd v Archital Luxfer Ltd 1993

Answer 5

Complex, but incomplete, negotiations
Offer and acceptance analysis not always appropriate
CoA held that two subcontracts had come into existence
Nothing could be identified as offer and acceptance
but written exchanges, oral discussions and party performance

Question 6

Butler Machine Tool Co Ltd v Ex -Cell-O Corp Ltd 1979

Answer 6

Last shot rule
Highlights the difficulty of applying offer and acceptance in battle of the forms cases
Lord Denning’s four options to understanding the scope and extent of the contract

Question 7

British Steel Corp v Cleveland Bridge and Engineering Co Ltd 1984

Answer 7

Contractless transactions
British steel corp could recover a reasonable price but Cleveland was left with no remedy for the late delivery
Known as a quantum merit claim - contractor carried out work but cannot enforce claim as there is no contract

Question 8

Balfour v Balfour 1919

Answer 8

The nature of distinction
Husband failed to pay wife monthly allowance
Not the outcome that is important but how the courts distinguish relations
For reasons of love and affection - no intention to create legal relations

Question 9

Horrocks v Forray 1976

Answer 9

For reasons of love and affection?
Granted mistress a house but later discovered wife after his death
Was the grant of possession of the house intended to create legal relations? No, merely love

Question 10

Brinkibon v Staghag Stahl 1983

Answer 10

Applicability of the postal rule to modern forms of communication
The contract is complete when the acceptance is received, rather than when it was sent
not always applicable
eg where messages are sent out of office hours

Question 11

Edmonds v Lawson 2000

Answer 11

Commercial contracts presumed to intend legal relations
argument that pupilage did not have t’s and c’s and so could not intend to create legal relations
CoA rejected claims as education had no effect

Question 12

Jones v Daniel 1894

Answer 12

Introduced terminology of ‘counter-offer’

No contract had come into being and the action failed