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Contract Law > Agreement > Flashcards

Agreement Flashcards

Learn the doctrine of offer and acceptance and the relevant case law.

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1
Q

Is the test for agreement objective or subjective?

A

Objective

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2
Q

How do the Courts determine whether the objective test for agreement is satisfied?

A

They look at what the parties said and did, not at what they say their intention was.

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3
Q

Give Treitel’s definition of offer.

A

An expression of willingness to be legally bound by specified terms as soon as the offer is accepted.

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4
Q

Define a bilateral obligation

A

Two parties agreeing to do something.

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5
Q

Define a unilateral obligation

A

One party binding themselves to do something.

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6
Q

Is an invitation to treat an offer?

A

No. An invitation to treat is not an offer.

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7
Q

What does the court decide in Fisher v Bell?

A

Display of goods in a shop window is an invitation to treat and does not amount to an offer.

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8
Q

Give the facts of Fisher v Bell. What did the courts have to decide?

A

A shopkeeper displayed a flick knife in his window with a price tag. the court had to decide whether this amounted to an offer or an invitation to treat.

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9
Q

Give the facts of Pharmaceutical Soc v Boots

A

Boots was a self-service shop that sold drugs that had to be sold under the supervision of a registered pharmacist.

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10
Q

What did the Pharmaceutical Soc argue?

A

That the display of the goods in a self-service manner amounted to an offer.

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11
Q

What did the court decide in Parmaceutical Soc v Boots?

WHY?

A

That display of goods in a self service manner was an invitation to treat. because if it was an offer, the customer would be legally bound to buy whatever they placed in their baskets, which is absurd.

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12
Q

What is the general rule concerning offers and advertisements?

A

The general rule concerning Ads is that they are an invitation to treat.

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13
Q

Which case says that Ads are invitations to treat?

A

Partridge and Crittenden 1968.

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14
Q

What are the facts of Partridge and Crittenden?

A

P was advertising the sale of hens which were illegal to be offered for sale. Prosecutors argued this was an offer to sell and he was breaking the law.

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15
Q

give the decision in Partridge and Crittenden and the reasoning behind this decision

A

If the advert was an offer, P would be bound to provide a hen to everyone who accepted this offer. meaning in theory, if everyone in the world accepted his offer he would be legally bound to supply them with hens which would be impossible and absurd. the court said adverts are invitations to treat, NOT offers.

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16
Q

Who said the general rule regarding adverts may not extend to manufacturers?

A

Lord Parker, CJ

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17
Q

Who may the general rule regarding Adverts not apply to and why?

A

Manufacturers, they are in a position to manufacture supply to meet their demand.

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18
Q

Other than when it is made by a manufacturer, when could an advertisement amount to an offer?

A

When the wording of the advertisement goes so far as to amount to an offer.

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19
Q

What is the main case outlining why the wording of an advertisement can amount to an offer?

A

Carlill v Carbolic Smoke Ball Co 1893

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20
Q

Give the facts of Carlill

A

A company who produced a smoke ball advertised that if you used the smoke ball every day as advertised you would not catch the flu. they advertised a £100 reward for anyone who used the smoke ball and still contracted flu and they had put £1000 in a bank account to accomodate this. Mrs Carlill got the flu after using the smoke ball and sued.

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21
Q

What type of agreement arises from Carlill?

A

A unilateral one. No-one is obliged to buy a smoke ball, but if they do and contract flu, they can claim the £100 reward.

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22
Q

Give a second case displaying when the wording of an advert can amount to an offer

A

Lefkowitz v Great Minneapolis Surplus Stores

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23
Q

Give the facts of Lefkowitz

A

An advertisement was ran by a company saying they were selling fur coats for $5 and that it would be first come, first served. The first man there was refused sale.

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24
Q

what was the decision of the court in Lefkowitz?

A

Because the advert displayed a clear price and said first come, first served, the wording had gone far enough as to amount to an offer.

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25
Q

Why was there an offer in Carlill?

A

Because the company had gone as far as to put the money in the bank account, showing their intention to be bound.

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26
Q

Are tenders generally referred to as an offer or an invitation to treat and why?

A

Invitation to treat. Because they are not bound to sell to the highest bidder, or any bidder for that matter.

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27
Q

When might a tender be taken as an offer?

A

When they specifically say that the highest bid will be accepted.

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28
Q

what is the rule regarding auctions and offers?

A

That bidders make an offer to buy which is accepted by the fall of the hammer. The auctioneer is entitled to refuse any offer.

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29
Q

Give Treitel’s definition of Acceptance

A

A final unqualified expression of assent to all the terms proposed

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30
Q

What does Treitel mean when he says acceptance should be ‘unqualified assent to all the terms’?

A

the acceptance must be a mirror image of the offer.

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31
Q

What are the two essential elements of acceptance?

A

Fact and communication of acceptance.

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32
Q

In terms of acceptance, what does Carlill illustrate?

A

An example of acceptance by conduct

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33
Q

Define an invitation to treat

A

An invitation to begin negotiations.

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34
Q

What must acceptance by distinguished from?

A

A counter offer

35
Q

What does the counter offer do to the original offer?

A

Terminates it.

36
Q

Give the facts of Hyde v Wrench

A

D offered to sell his car to C for £1000. C offered to pay £900. D said no so C said ok I’ll pay £1000. D said no again so C took him to court saying there was a contract because he had accepted the offer.

37
Q

Give the decision of the court in Hyde v Wrench

A

The court said there was no contract because C’s counter offer of £900 killed the original offer of £1000, so it was no longer capable of being accepted.

38
Q

What does a counter-offer contrast with?

A

A request for further information

39
Q

Give the facts of Stevenson v McLean

A

B wanted to buy iron from A. A said he would sell it for 40s. B asked if he would be willing to accept the 40s paid over 2 months. A sold the iron to someone else before the offer expired and because B hadn’t heard back he just accepted the offer to pay there and then. A said the offer had been terminated by B’s counter offer.

40
Q

Give the decision of the court in Stevenson v McLean

A

the court said this was merely a request for further information, not a counter offer, and therefore the original offer had not been terminated.

41
Q

What are cross-offers not? Which case states this?

A

Acceptance

Tinn v Hoffman Co.

42
Q

Give an example of a cross offer

A

A sends a letter to B offering to sell his car to him for £5,000. at the same time, B sends a letter offering to buy A’s car for £5,000. although both offers mirror each other, this does not constitute acceptance because cross offers are not acceptance.

43
Q

Define communication of acceptance

A

The external manifestation of assent by the offeree or agent.

44
Q

What do we mean by ‘prescribed mode of acceptance’?

A

the method by which the offer is accepted can be prescribed.

45
Q

In which two ways can acceptance be prescribed?

A

Mandatory or Directory.

46
Q

What do we mean by mandatory mode of acceptance?

A

That you must follow exactly the method in which they tell you to accept the offer.

47
Q

If an offeror wants the mode to be mandatory, what does he have to use?

A

Clear words that state this.

48
Q

Which case says you have to use clear words to make a mode of acceptance mandatory?

A

Yates v Pulleyn

49
Q

Give an example of what a mandatory direction of acceptance could sound like

A

If you wish to accept this offer, you must send a letter of acceptance to this address.

50
Q

define what the directory mode of acceptance is

A

where the words are not sufficiently clear to mandate a specific method of communication then communication of acceptance will be valid if it is made by an equally advantageous method.

51
Q

give some examples of what would constitute an ‘equally advantageous method’

A

a letter, email, word of mouth etc.

52
Q

which case covers ‘equally advantageous method’ for directory acceptance?

A

Manchester Diocesan Council v Commercial and General Investments Ltd.

53
Q

What is the general rule for communication of acceptance?

A

there must be actual communication

54
Q

Which case sets out the general rule for communication of acceptance?

A

Entores

55
Q

When is acceptance generally only valid?

A

When the acceptance is actually brought to the attention of the offeror

56
Q

Give an example of instantaneous communications

A

telephone, telex, e-mail.

57
Q

What was the warning given in Brinkibon and who gave it?

A

Wilberforce warned that no general rule can cover all cases, and that they must be resolved by reference to the intentions of the parties.

58
Q

Give the facts of Thomas v BDE solicitors

A

The parties were trying to complete a sale of shares on a Friday, an e-mail was sent at 6pm accepting the offer (outside business hours)

59
Q

What was decided in Thomas v BDE solicitors?

A

The acceptance was valid. it was clear from the evidence that the parties intended to complete the sale on that Friday evening. this being so, it was the intention of the parties that an email sent at 6pm that friday regarding that transaction would be read that day.

60
Q

Give the rule regarding silence and acceptance

A

Silence is not good communication of acceptance.

61
Q

Name a case concerning silence and acceptance

A

Felthouse v Bindley

62
Q

Give the facts of felthouse v Bindley

A

An uncle and nephew were negotiating over the sale of a horse. The uncle said he was willing to split the difference between £30 and 30 guineas. The nephew did not respond and sold the horse at auction. the uncle sued the auctioneer saying the horse belonged to him.

63
Q

Give the decision in Felthouse v Bindley.

A

The court said there was no contract to breach because silence is not good communication of acceptance.

64
Q

what are the three exeptional circumstances where there can be acceptance without communication

A
  1. the conduct of the offeree
  2. unilateral contracts
  3. the postal rule.
65
Q

why can acceptance be completed without communication for unilateral contracts?

A

Because they can be accepted by anyone. e.g. reward for a lost cat, you don’t tell them you’re going to bring the animal, you find it then go for the reward, that is how acceptance occurs.

66
Q

Give a brief description of the postal rule

A

the postal rule says that an offer is accepted as soon as the letter of acceptance is put in the post, regardless of whether it reaches the offeror.

67
Q

What is the postal rule an exception to?

A

the general rule that communication of acceptance must occur.

68
Q

What does the case Adams v Lindsell establish?

A

Acceptance occurs as soon as the letter of acceptance is put in the post.

69
Q

What does the case Household Fires and Carriage Insurance Ltd v Grant establish?

A

Even if a letter never arrives due to the fault of the post office the acceptance is valid because acceptance occurs when the letter is put in the post, regardless of whether it actually arrives or not.

70
Q

What does the case Holwell Securities v Hughes establish?

A

That the postal rule may be excluded by the terms of the offer.

71
Q

What does Henthorn v Fraser establish?

A

Provided it was in the parties’ reasonable contemplation that the post would be used, the postal rule will apply.

72
Q

What does Byrne v Van Tienhoven establish?

A

The postal rule only applies to letters of acceptance, not communication or revocation of an offer.

73
Q

Give the facts of Adams v Lindsell

A

D was a wool merchant who offered to sell C wool. he sent the letter on 5th June but misdirected it. The letter did not arrive with C until 7th September. C immediately sent his letter of acceptance which arrived with D on 9th September. Because D would have expected to hear a response by the 7th they sold the wool to someone else. however because acceptance occurs when a letter is put in the post they already had a contract when he sold the wool to someone else.

74
Q

Give the facts of Holwell securities v Hughes

A

The term of the contract said the offeree had to give ‘notice in writing’. They put their letter of acceptance in the post but it never arrived with the offeror. Offeree tried to argue the postal rule applied but the court rejected this. the fact that the offeror said they had to receive notice in writing displaced the postal rule so the postal rule did not apply here.

75
Q

what is not usually necessary for unilateral contracts?

A

communication of acceptance

76
Q

When is acceptance of a unilateral contract complete? give an example

A

When you do whatever the offer asks

e.g. returning a lost dog).

77
Q

Can an offer of a unilateral contract be revoked once acceptance has commenced?

A

No, provided the performance that had been embarked upon was not left ‘incomplete and unperformed’

78
Q

Which case says that an offer of a unilateral contract cannot be revoked once acceptance has been embarked upon?

A

Errington v errington

79
Q

give the facts of errington v errington

A

A man bought a house for his son and daughter in law. he took out a mortgage but promised if they paid the installments and remained in the property he would transfer ownership to them once it was paid off. he died and the daughter in law remained in the house but all his property transferred to his widow who sought a possession order against the daughter in law who had continued to honour the deal she had with the father.

80
Q

What was the decision of the court in errington v errington

A

the fathers promise was a unilateral one, a promise of a house in return for paying the installments. once they had commenced this action the offer could not be revoked unless they stopped paying or moved out of the house or both then the offer would be at an end. the contract was still valid.

81
Q

When may an offer be revoked?

A

at any time before acceptance occurs.

82
Q

Which case says that an offer cam be revoked at any time before acceptance?

A

Dickinson v Dodds

83
Q

In terms of revocation, what must the offeree be given?

A

Some notice of the revocation.

84
Q

What does notice of revocation mean?

A

bringing it to the attention of the offeree that you are revoking the offer

Contract Law (9 decks)

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