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Contract > Acceptance > Flashcards

Acceptance Flashcards

Knowledge and understanding of Agreement

1
Q

What are the three elements that MUST be present for a binding contract

A

(1) Offer and Acceptance
(2) Intention to create legal relations
(3) Consideration

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2
Q

Who is the offeror?

A

The person making the offer

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3
Q

Who is the Offeree

A

The person to whom the offer is made

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4
Q

For “offer and acceptance” to take place what two elements must occur?

A

(1) The offeror needs to make a clear and certain offer displaying an intention to be bound
(2) the offeree needs to communicate an unequivocal acceptance

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5
Q

What test does the court use to determine “agreement”?

A

Objective - What a reasonable person would say was the intention of the parties, having regard to all the circumstances

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6
Q

What elements must an offer have?

A

It must be clear and certain (Gibson v Manchester City Council)
AND
must show an intention to be legally bound (Storer v Manchester City Council)

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7
Q

What are the two kinds of contract?

A

Unilateral and bilateral

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8
Q

What is a bilateral contract?

A

Each party assumes and obligation to the other party by making a promise to do something

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9
Q

What is a unilateral contact?

A

Where one party makes an offer or proposal in terms which call for an act to be performed by one or more other parties.

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10
Q

What is an example of a unilateral contract?

A

Specific lost property in exchange for a reward

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11
Q

How does the offeree demonstrate acceptance of a unilateral offer

A

Actual performance of the required act.

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12
Q

A man is showing off his rare first edition book to his neighbour when he says, ‘I might consider selling this book for a five-figure sum’. The next day, the neighbour tells the man that he accepts his offer and gives him a cheque for £10,000. Did the man make a valid offer to his neighbour?

A

No, because the statement was not clear about the price, nor did it show an intention to be bound.

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13
Q

Define an invitation to treat

A

Usually - an invitation to make an offer

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14
Q

What is the difference between an offer and an invitation to treat

A

An invitation to treat usually takes the form of an invitation to make an offer.
An offer is an undertaking to be contractual bound by the terms of that offer in the event of an unconditional acceptance being made.

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15
Q

Can an invitation to treat be accepted to form a binding contract?

A

No.

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16
Q

Are advertisements regarded as offers or invitations to treat?

A

Invitations to treat (Partridge v Crittenden)

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17
Q

Are display of goods for sale an offer or an invitation to treat?

A

Invitation to treat (Fisher v Bell)

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18
Q

If a shop’s display of goods for sale expressly describes those good as an “offer” is this considered an offer or invitation to treat?

A

Invitation to treat - if it was an offer then the trader would be obliged to sell the goods to anyone who accepted the offer even if underage etc.

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19
Q

Are goods displayed on the shelves of a self-service store an offer or invitation to treat?

A

Invitation to treat (Pharmaceutical Society of GB v Boots Cash Chemists)

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20
Q

Are websites an offer or invitation to treat?

A

Invitation to treat

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21
Q

Are invitations to tender an offer or invitation to treat?

A

Generally deemed as an invitation to treat (Spencer v Harding) as the requestor can accept or reject any tender

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22
Q

If an invitation to tender expressly contains an undertaking to accept the highest or lowest bid - is this an offer or invitation to treat?

A

This is an offer (Harvey Investments Ltd v Royal Trust Co. of Canada)

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23
Q

If an invitation to tender expressly contains an undertaking to accept the highest or lowest bid - is this a bilateral or unilateral contact?

A

Unilateral contract - the required act is to make the highest or lowest bid, once done the other party is bound.

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24
Q

Which three circumstances are an example of where an invitation to tender could give rise to a binding contractual obligation to consider tenders?

A

(1) the tenders had been solicited from specified parties who were known to the requesting party;
(2) there was an absolute deadline for submission
(3) the party requesting tenders had laid down absolute and non-negotiable conditions for submissions.

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25
Q

Are auctioneer’s requests for bids an invitation to treat or an offer?

A

Generally invitation to treat (Payne v Cave)

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26
Q

In an auction - when does the acceptance of a bidder’s offer occur?

A

The fall of the auctioneer’s hammer

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27
Q

At what point can the bidder revoke their offer in an auction?

A

Up until the fall of the auctioneer’s hammer

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28
Q

What is an auction without reserve?

A

An auction where the seller promises to sell to the highest bidder whatever the bid turns out to be.

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29
Q

If the auction is without reserver, what may happen if the auctioneer refuses to sell to the highest bona fide bidder?

A

The auctioneer may be sued for breach of contract (Warlow v Harrison)

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30
Q

What are the three ways an offer can be terminated?

A

(1) Rejection
(2) Lapse
(3) Revocation

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31
Q

When does a rejection take effect?

A

When it is actually communicated to the offeror.

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32
Q

If an offeree makes a counter-offer what happens to the original offer?

A

It is deemed to have been reject and cannot be subsequently accepted (Hyde v Wrench)

33
Q

If the standard terms of an offeror and the standard terms of the offeree are different when an offer is accepted what occurs?

A

The offeree has made a counteroffer

33
Q

What could constitute a request for further information

A

(1) a clarification of the extent and terms of the offer
(2) ascertaining whether the offeror would consent to changing certain ancillary aspects of the offer

34
Q

What are the two ways an offer may lapse?

A

(1) passage of time
(2) death of one of the parties

35
Q

Is a request for information a rejection?

A

No.

36
Q

What are the two circumstances through which an offer will lapse through passage of time.

A

(1) where acceptance is not made within the period prescribed by the offeror
(2) where no period is prescribed and acceptance is no made within a reasonable time.

37
Q

If the offeror dies what happens to the offer?

A

(1) if the offeree knows that the offeror has died the offer will lapse;
(2) if the offeree is unaware of the offeror’s death it probably will not.

38
Q

If the offeree dies what happens to the offer?

A

the offer will lapse so it cannot be accepted by the offeree’s representatives.

39
Q

When can an offer be revoked up until?

A

Acceptance

40
Q

When is revocation of an offer effective?

A

Upon actual notice of it reaching the offeree

41
Q

If revocation is communicated by post when does it take effect?

A

The moment it is received by the offeree and not from the time of posting (Byrne v Van Tienhoven)

42
Q

Does revocation have to be communicated directly?

A

No, as long as the offeror has shown, by words or conduct, a clear intention to revoke their offer and notice has reached the offeree

43
Q

Can revocation be communicated by a third party?

A

Yes (Dickinson v Dodds)

44
Q

Is it possible to revoke a unilateral offer?

A

Generally - it is possible to revoke the offer at any time prior to the completion of the required act (Great Northern Railway Company v Witham)

45
Q

What is the exception to the rule that is is possible to revoke a unilateral offer?

A

If the offeree has partly performed the obligation and is willing and able to complete.

46
Q

True or false - If you overhear an offer being made to someone, you can accept this?

A

False - only the person/people to whom an offer is made can accept an offer.

46
Q

What are the four elements required for acceptance?

A

(1) Must be in response to the offer
(2) Must be unqualified
(3) May be necessary to follow a prescribed mode of acceptance
(4) Must be communicated

47
Q

If an offer is made generally to the world at large who can accept the offer?

A

Anyone with notice of the offer (Carlill v Carbolic Smoke Ball Co.)

48
Q

What is ‘the mirror image rule’?

A

Acceptance must be unqualified and must corresponded exactly with the terms of the offer.

49
Q

If an assent is qualified is this considered to be acceptance?

A

No

50
Q

How can acceptance be communicated?

A

In any manner whatsoever unless - in some cases - the offeror prescribes a mode of acceptance

51
Q

What must the offeror do to prescribe a mode of acceptance?

A

Must use clear words to shows that only acceptance in that mode shall be binding.

52
Q

If the prescribed mode is not made mandatory how can the offeree accept?

A

In a no less advantageous mode than the prescribed mode (Tinn v Hoffman)

53
Q

A woman offers by email to sell her snooker table to a man for £3,500. The man replies that he is happy to pay £3,500 for the snooker table but wants the cues, balls and framed O’Sullivan picture included for that price. The woman is happy to go ahead with that suggestion. What is the effect of the man’s reply?

A

It is a counter offer

54
Q

A farmer telephones his neighbour on Monday and offers to sell him three ducks for £50. The neighbour responds that he will pay £40 for the ducks. Later that evening, the neighbour informs his brother of the farmer’s offer. The brother immediately telephones the farmer and informs him that he accepts the farmer’s offer. On Tuesday morning, the neighbour telephones the farmer and says he has changed his mind and he accepts the offer of £50. Is there a contract formed?

A

No, there is no contract between the farmer and the brother because the farmer did not accept the brother’s offer.

55
Q

Can an offer be accepted if the offeree intended to accept but did not communicate that intention to the offeror.

A

No. Mere mental assent is not sufficient

56
Q

Can the offeror stipulate that silence will be acceptance?

A

No. Silence cannot amount to acceptance.

57
Q

If communication is made by a third party, when will a contract arise?

A

When the third party accepts the offer with the authority of the offeree.

58
Q

What is the postal rule (Adams v Lindsell)?

A

Where post is deemed to be a proper means of communication, acceptance takes effect from the moment the letter of acceptance is properly posted.

59
Q

TRUE OR FALSE - The postal rule applies even where the acceptance is delayed or lost in the post

A

TRUE (Household Fire and Carriage Accident Insurance Co. v Grant)

60
Q

When is a letter considered to be properly posted?

A

When it is put into an official letter box or into the hands of a postoperative who is authorised to RECEIVE letters.

61
Q

Will the postal rule apply if is is not contemplated that post would be used?

A

No. It must be contemplated that the post would be used.

62
Q

If there is an implied condition that prompt acceptance is required is it reasonable to use the post.

A

No. It has been held this is unreasonable.

63
Q

Does the postal rule apply to both letters of acceptance and letters revoking an offer.

A

No. The rule only applies to letters of acceptance. Revocation of an offer must be received in order to be effective.

64
Q

Does the postal rule apply if the letter of acceptance is incorrectly addressed?

A

No. The offeree has lost the benefit of the postal rule by their own carelessness.

65
Q

If the offer stipulates that ‘notice in writing’ is required, what does this mean?

A

This implies that acceptance has to be RECEIVED and the postal rule is set aside.

66
Q

If an acceptance is made by an instantaneous mode of communication, when does acceptance take place?

A

The moment the acceptance is RECEIVED (Entores v Miles Far East Corporation)

67
Q

In the case of instantaneous communication, if the message of acceptance is not received without any fault on the part of the offeror, will the contract be concluded?

A

No.

68
Q

If the offeree reasonably believes that they have communicated their acceptance but this is not so due to the offeror, has a contract been formed.

A

Yes - they may be prevented from saying that they did not receive the acceptance.

69
Q

Does the postal rule apply to emails?

A

No. Acceptance by email is effective once received.

70
Q

If an instantaneous communication is sent during ordinary office house, when is it deemed accepted?

A

Once received.

71
Q

If an instantaneous communication is sent outside of ordinary office house, when is it deemed accepted?

A

The next business day.

72
Q

Does communication of acceptance apply to a unilateral contract?

A

No. Performance is sufficient itself.

73
Q

When can a court enforce the agreement?

A

When all material terms are certain and complete.

74
Q

What test does the court apply to determine whether the parties have reached an agreement on all material terms?

A

An objective test

75
Q

What do the courts do if an agreement lacks certainty?

A

The courts will look to enforce the agreement, reflecting the intentions of the parties if possible.

76
Q

Will the court readily strike down an agreement if it lacks certainty?

A

No - the court will strike down an agreement as a last resort

Contract (3 decks)

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