Agreement (Contract formation) Flashcards
Contract formation
Fisher v bell
Invitations to treat - It is well established in contract law that the display of an item in a shop window is an invitation to potential customers to treat. The defendant was therefore not guilty of the offence with which he had been charged.
Pharmaceutical Society v Boots
Invitations to treat - The question was whether the contract of sale was concluded when the customer selected the product from the shelves or when the items were paid for
The Court of Appeal held the contract was completed on payment
Carlill v Carbolic
General Offers - the advert amounted to the offer for a unilateral contract by the defendants. In completing the conditions stipulated by the advert, Mrs Carlill provided acceptance.
The Court further found that: the advert’s own claim to sincerity negated the company’s assertion of lacking intent; an offer could indeed be made to the world; wording need only be reasonably clear to imply terms rather than entirely clear; and consideration was identifiable in the use of the balls
Hyde v Wrench
Counter-offers - It was stated that when a counter offer is made, this supersedes and destroys the original offer. This original offer is no longer available or on the table. In this case, when Mr Hyde offered £950, he cancelled the £1,000 offer and could not back track and accept.
Brogden v Metropolitan
Acceptance by Conduct - The House of Lords held that there was a valid contract between suppliers, Brogden and the Metropolitan Railway.
The draft contract that was amended constituted a counter offer, which was accepted by the conduct of the parties.
The prices agreed in the draft contract were paid and coal was delivered.
Although there had been no communication of acceptance, performing the contract without any objections was enough
Manchester Diocesan Council for Education v Commercial Investments
Prescribed Method of Acceptance - The court held that there was no prescribed or mandatory method for acceptance of a tender. If the offeror wanted to create a mandatory acceptance method, this would need to be made clearly and explicitly to the other parties. An equally effective method of acceptance would be enough to form a valid contract.
However the postal rule would not apply
Butler v excello
When Butler returns the contract for the sake of his order, it acted as a counter-offer. therefore by delivering on those terms ExCello accepted Butlers terms
Felthouse v Bindley (1862)
Silence a condition of acceptance - There had not been an acceptance of the offer; silence did not amount to acceptance and an obligation cannot be imposed by another. Any acceptance of an offer must be communicated clearly. Although the nephew had intended to sell the horse to the complainant and showed this interest, there was no contract of sale
Henthorn v Fraser [1892
Post or telegram - The court held that the offer was valid and an order for specific performance made for £750 to purchase the property.
The postal rule in Adams v Lindsell would apply,
which stated that it would be reasonable for acceptance of an offer to take place by post. However, this rule would not apply to the revocation of an offer.
Post was a way of communicating offer acceptance, but the acceptance itself is completed as soon as it is posted. This was reasonable to expect since both parties lived in different towns.
Holwell Securities Ltd v Hughes
Postal rule exceptions - It was stated by the court that the postal rule does not automatically apply in every case, despite the post being an acceptable means of communication in transactions or business proposals.
It is important to look at all the circumstances of the case to see what the parties intended, which may mean a binding agreement does not apply until it is communicated.
In this case, Dr Hughes stated the option was exercisable ‘by notice in writing’ within six months, which meant that he would have to receive the communication in writing before a valid contract would be created. This specification meant that the postal rule did not apply
Entores Ltd v Miles Far East Cpn
Electronic Communications -
The court held that the contract and damages were to be decided by English law.
It was stated that the postal rule did not apply for instantaneous communications.
Since Telex was a form of instant messaging, the normal postal rule of acceptance would not apply and instead, acceptance would be when the message by Telex was received. Thus, the contract was created in London.
This general principle on acceptance was held to apply to all forms of instantaneous communication methods
The Brimnes
Electronic Communications - It was held that the withdrawal was effective when it Telex message was received, not when the message was read. As it was sent during normal office hours,
Thus, this case became authority for the reasoning that any withdrawal of an offer sent through a form of instantaneous communication, such as Telex, would be effective when it could have been read by the other party; not when it was actually read.
