Agreement

Question 1

What is an offer?

Answer 1

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

Question 2

What approach does the court adopt when deciding whether there was agreement between the parties?

Answer 2

The courts look at what was said and done between the parties, from the point of view of a ‘reasonable person.’

Question 3

Who can accept an offer?

Answer 3

You can only accept an offer that was addressed to you.

Question 4

What are invitations to treat?

Answer 4

Statements are simply inviting negotiation.

Question 5

Are goods on display an offer or an invitation to treat?

Answer 5

Goods on display are simply an invitation to treat and the offer to buy is made at the checkout.

Question 6

Where goods or services are advertised are they offers or invitations to treat?

Answer 6

They are generally regarded as being an invitation to treat.

Question 7

Are adverts of reward offers or invitations to treat?

Answer 7

Adverts of reward have been treated as offers; namely definite promises to pay the reward if the specified condition (eg supply of information) is satisfied.

Question 8

When is an offer accepted at an auction?

Answer 8

It is when the auctioneer’s gavel goes down; that is the acceptance of the last bid, which was the offer (Sale of Goods Act (SGA) 1979, s 57(2)). The auctioneer inviting bids is simply an invitation to treat.

Question 9

What happens when an auction is advertised as being ‘without reserve’?

Answer 9

The items must be sold to whoever made the highest bid (however much that might be). If the auctioneer refused they would be in breach of a unilateral contract.

Question 10

When is an offer accepted during a tender process?

Answer 10

The invitation to submit tenders is an invitation to treat and the tenders will each be offered to do the work.

If a company had specifically promised to accept
the lowest tender, or at least impliedly promised to consider all conforming tender, then
what we have is an offer of a unilateral contract and if the company does not comply with its promise (to, say, accept the lowest tender) it will be liable for breach of contract.

Question 11

What is acceptance?

Answer 11

An expression of assent that is unqualified.

Question 12

What is required for an ‘expression of assent’?

Answer 12

Acceptance must be
communicated and it must be communicated by the offeree or their authorised agent. This
may be by words or conduct.

Question 13

What is required for the expression of acceptance to be unqualified?

Answer 13

The need for the expression to be ‘unqualified’ means that a conditional response cannot
amount to acceptance and create a contract.

Question 14

What is a counteroffer?

Answer 14

A conditional response to an offer that effectively destroys the original offer and represents a new offer that the other party is free to accept to reject.

Question 15

What is the battle of the forms?

Answer 15

Both sides pass their own Ts & Cs to the other side for agreement. These can be seen as counter-offer after counter-offer where the last shot wins.

Question 16

What is the ‘postal rule’ for acceptance?

Answer 16

A letter of acceptance will be effective when posted even if the letter is lost in the post. For
the postal rule to apply, though, the following conditions must be satisfied:

It was reasonable in all the circumstances to use the post;

The letter was properly addressed, stamped and posted; and

The postal rule had not been excluded by the offeror.

Question 17

How can the postal rule be excluded by the offeror?

Answer 17

The rule would be excluded if, for example, the offeror had stipulated or otherwise implied
that they needed to be notified in writing or ‘told’ of any acceptance.

Question 18

What happens when an offer is terminated?

Answer 18

The offer can no longer be accepted.

Question 19

How can an offer be terminated?

Answer 19

Express rejection

Withdrawal

Counteroffer

Lapse of time

Question 20

What is the rule for the revocation of an offer?

Answer 20

Generally, an offer may be revoked (withdrawn) any time before acceptance even if the
offeror promised to keep the offer open for a certain period of time. The only exception to
that is if the offeree gave something in return for the promise to keep the offer open.

However, revocation must be communicated to the offeree in order to be effective.

Question 21

When does acceptance take place for offers of unilateral contract?

Answer 21

The general view is that with unilateral contracts no obligations arise until the specified act is completed;
in other words, acceptance only occurs when performance is complete.

However, it has been suggested that in addition to the express
offer, there is an implied promise not to be revoked if the specified act is started within a reasonable time. The acceptance and consideration for the implied promise is the commencement of the act.

Question 22

How can an offer made to the public at large be revoked?

Answer 22

The best the offeror can do in the circumstances is publish a notice of revocation in the same place as the offer and with the same prominence.

Question 23

Does the postal rule apply to a notice of revocation?

Answer 23

The postal rule does not apply.

Question 24

When will an offer be terminated for lapse of time?

Answer 24

After a reasonable time which will depend upon all the circumstances.

Question 25

What facts do judges consider when deciding whether, or not, parties have reached complete agreement in relation to the material terms of
the deal?

Answer 25

Whether the parties are in the same trade;

Trade usage;

Whether the arrangement has been acted on for any length of time; and

Whether there is an objective mechanism for resolving any uncertainty such as an
arbitration clause.