Agreement Flashcards
Who is the person who make the offer?
Offeror
Who is the person who receives the offer?
Offeree
What is an offer?
An expression of willingness to contract on certain terms, made with the intention that is shall become binding as soon as it is accepted by the person to who it is addressed.
What do the Courts examine when the intention in an offer is trying to be established?
The courts look at what was said and done between the parties, from the point of view of a reasonable person, and try to decide what a reasonable person would have thought was going on.
The definition of an offer contains the sentence ‘ to whom it is addressed to’. what does this mean?
You can only accept an offer that was addressed to you.
Difference between an offer and invitation to treat?
An invitation to treat, is where there is an invitation to enter negation, this is determined by the wording used. for example ‘ I am thinking of selling my car for £7k, would you be interested in buying it’ is difference to ‘ I will sell you my car for £7k’? The later is an offer the former is an invitation to treat.
What are goods on display?
They are an invitation to treat, ie an invitation to select the goods and put them in your trolley. If you later change your mind and decide you do not want the goods then you can put them back without obligation.
Advertisements are they an offer or an invitation to treat?
Where goods and services are advertised eg in newspaper or tv, website then they are an invitation to treat.
An advert for a reward are normally treated as offers, as they are definite promises to pay the reward if the specified condition is satisfied.
What are unilateral contracts?
A promise in exchange for a course of action. Only one party is making a promise.
What are bilateral contracts?
a promise in return for a promise
Are auctions offers or invitation to treat? and at what point at an auction is the sale concluded?
Auctions are invitation to treats and the offer is accepted, when the auctioneer’s gravel goes down.
What are ‘Reserve prices in auctions’?
The owner and the auctioneer will agree in advance a minimum price below which the auctioneer will not sell the property.
Potential bidders will know that there is a reserve price, they will not know how much it is. if the bidding does not reach the reserve price the property will be withdrawn from the sale.
Barry V Davies [2000] for auctions
Here we see the Auctioneer being sued for damages as he did not accept the highest bid. However if the auctioneer did accept the bid and the owner of the goods refused to sell, Mr Barry could sue the owner as he would have entered a contract of sale with the owner.
How would damages be assessed in cases of breach of contract in Auctions
The difference between the amount of the bid and the total value of the machines, this sum represented the buyers loss of expectation.
When would there be an acceptance
Where there is an expression of assent, which is unqualified.
The need for the expression to be unqualified means that a conditional response cannot amount to acceptance. For example ‘ I agree to buy your car but can only afford to pay you half the price now and the rest next week is a counter offer, which destroys the original offer.
What does an expression of assent mean, when it comes to acceptance
Acceptance must be communicated and it must be communicated by the offeree or their authorised agent. This may be words or conduct.
How is acceptance communicated in Unilateral contracts
Always be conduct of some sort, In unilateral contracts acceptance is through performance, not communication.
Can silence ever amount to acceptance?
An offeror cannot bind the other party to a contract by silence. However if silence is coupled with conduct which clearly signifies accepted when viewed objectively, then this will be acceptance.
Exceptions:
1. Prior Course of Dealings
* If parties have a history of consistent dealings, silence may be considered acceptance.
* 🔹 Case: Brogden v Metropolitan Railway (1877)
* Facts: A railway company continued to accept coal deliveries after a contract had been proposed but not formally signed.
* Held: Their conduct (continuing to act as if the contract existed) amounted to acceptance.
2. Unilateral Contracts * In unilateral contracts, acceptance is through performance, not communication. * 🔹 Case: Carlill v Carbolic Smoke Ball Co (1893) * Facts: A company advertised that using their product would prevent flu, and they would pay £100 if it failed. Carlill used the product and got sick. * Held: Her conduct of using the product was sufficient acceptance.
While the default position remains that silence ≠ acceptance, courts will consider conduct and surrounding circumstances to determine whether an agreement has been reached.
What does the term ‘ battle of the forms’ illustrate?
It is essentially counter-offer after counter-offer, where the parties battle it out and the prize is having your own terms prevail. In other words, the last shot wins.
This is normally seen where companies attach their T & C’s to documents when negotiating with each other.
What is the ‘postal rule’
A letter of acceptance will be effective when posted even if the letter is lost in the post.
What conditions need to be satisfied for the postal rule to apply.
- It was reasonable in all the circumstances to use the post.
- The letter was properly addressed, stamped and posted.
- The postal rule had not been excluded by the offeror. The offeror can exlcude it by requiring notice of acceptance in writing, meaining actual communcaiton is necessary.
Give an example of when the postal rule would be excluded?
The offeror had stipulated or otherwise implied that they needed to be notified in writing or told of any acceptance. In this case, although sending a letter of acceptance might be reasonable it would only be effective if and when, received.
What does the case Holwell Securities v Hughes tell us about the postal rule?
The court held by using the word ‘ notice’ the offeror had impliedly excluded the postal rule.
The postal rule did not apply because the contract specifically required “notice in writing”—meaning actual communication of acceptance was necessary.
How may an offer be terminated?
- Express rejection
- Lapse of time
- Counter offer ( Implied rejection)
Revocation ( withdrawal)
