Agreement (Offer & Acceptance) Flashcards
Define: Offer
“An expression of willingness to contract on specified terms, made with the intention that it is to become legally binding as soon as it is accepted by the person to whom it is addressed” (Treitel)
What are the components of a valid offer?
An offer must be:
- Clear and Certain
- Communicated to the offeree
- Not rejected, revoked or lapsed
What are the components of a valid acceptance?
Acceptance must be:
- A mirror image of the offer
- Made by the offeree in response to the offer
- Communicated to the offeror
Case authority: Language of “may” is not sufficiently clear and certain.
Gibson v Manchester City Council
Case authority: Language of “will” is sufficiently clear and certain.
Storer v Manchester City Council
Define: Invitation to Treat
An ITT is the preliminary stage in negotiations.
Case authority: An advert is generally an ITT not an offer.
Partridge v Crittenden
Case authority: A display of goods is an ITT
Fisher v Bell
Case authority: Placing goods on supermarket shelves is also an ITT
Pharmaceutical Society of GB v Boots Cash Chemists
Case authority: Where an advert is sufficiently clear and certain to indicate intention to be bound, and is from the product’s manufacturer (with theoretically unlimited supply), an advert may constitute an offer
Granger v Gough
Case authority: An advert couched in certain language, may be an offer where it amounts to a unilateral offer.
Carlill v Carbolic Smoke Ball Co.
Case authority: Invitations to Tender are not offers but simply invite others to make offers.
Spencer v Harding
Case authority: Offers are made by bidders, offers are only accepted when the auctioneers hammer falls. Items may be withdrawn any time up until acceptance.
Payne v Cave
Case authority: Items put up for auction “without reserve” constitute unilateral offers. (NB: Unilateral offer is with the auctioneer not the seller - claimant only entitled to damages not specific performance)
Barry v Davies
Case authority: An offer must be communicated in one of 3 ways, (1) Orally, (2) in writing, or (3) by conduct.
Taylor v Laird
An offer can be terminated by:
- Rejection
- Revocation
- Lapse
Case authority: A counter offer is a rejection followed by a new offer. The counter offer terminates the original offer.
Hyde v Wrench
Case authority: Requests for further information are distinct from counter offers - the original offer remains open.
Stevenson, Jacques & Co v McLean
Case authority: Revocation can happen any time before acceptance, but must be communicated.
Dickenson v Dodds
Case authority: Revocation may be communicated by a 3rd party.
Dickenson v Dodds
Case authority: Unilateral offer may be revoked any time before complete performance.
GNR v Witham
Case authority: If one has begun to act on the terms of a unilateral offer, the offeree must be allowed time to complete performance
Errington v Errington & Woods
An offer may lapse due to:
- Passage of time
- Death
- Non-fulfilment of a condition (Financings v Stimson)
Case authority: Acceptance must be on the exact same terms as the offer. (Mirror image rule)
Hyde v Wrench
Case authority: Acceptance must be made by an offeree.
Boulton v Jones
Case authority: Acceptance must be in response to an offer / while being aware of an offer
R v Clarke
Case authority: Motive for acceptance is irrelevant
Williams v Carwardine
Case authority: General rule - an offer must be communicated
Felthouse v Bindley
Case authority: Acceptance can be communicated by a 3rd party authorised by the offeree
Powell v Lee
Case authority: Acceptance by conduct is possible
Brogden v Metropolitan Railway
Case authority: In unilateral offers, performance of the act constitutes acceptance
Carlill v Carbolic Smoke Ball Co
Case authority: Where failure to communicate acceptance is the result of the offeror’s fault, they are estopped from denying receipt.
Entores v Miles Far East
Case authority: For acceptance sent by post, acceptance occurs at the moment the letter is properly posted.
Adams v Lindsell
Case authority: Offeror cannot revoke their offer after the acceptance has been posted, even if he is unaware of its posting.
Byrne v Van Tienhoven
Case authority: Letter must be properly posted - in a Royal Mail postbox or given to an employee authorised to receive letters.
Re London and Northern Bank, ex p Jones
Case authority: Acceptance is valid, even if the letter is lost or destroyed in the post
Household Fire and Carriage Accident Insurance Co v Grant
Case authority: If the letter has been incorrectly addressed then acceptance is only valid from the moment it arrives.
Getreide-Import Gesellschaft v Contimar
Case authority: Postal rule does not apply where it is not reasonable to use the post (e.g. A postal strike or where there is an implied demand for speed)
Henthorn v Fraser
Case authority: The postal rule does not apply where its application would cause “manifest inconvenience and absurdity”
Hollwell Securities v Hughes
Case authority: Postal rule may be ousted by specifying that the acceptance will not bind until it arrives
Holwell Securities v Hughes
Case authority: With instantaneous means of communication, acceptance occurs when the communication is received.
Encores v Miles Far East Corporation
Case authority: If acceptance is received within office hours but the offeror does not read it, that still counts as communication as it was the offeror’s fault.
The Brimnes
Case authority: When defining what is meant by “office hours” the context of the parties’ negotiations is relevant.
Thomas v BPE Solicitors
Case authority: If acceptance is received outside of office hours, then it counts as having been received at the beginning of the next working day
Mondial Shipping BV v Astarte Shipping
Case authority: Mode of acceptance may be prescribed if it is explicitly mandatory (e.g. Fax only), otherwise any equally advantageous means is acceptable.
Manchester Diocesian Council for Education v Commercial and General Investments
Case authority: If the prescribed means of acceptance is for the benefit of the offeree then the offeree may waive that requirement
Yates Building Co v Pulleyn
Case authority: There can only be a contract where there is mutually communicated intention by both parties to enter into legal relations.
Rose & Frank v Crompton Bros
Case authority: There is a presumption that ICLR always exists in commercial arrangements.
Bunn & Bunn v Rees & Parker
Case authority: There is no presumption of ICLR in social or domestic arrangements
Balfour v Balfour
What are the 3 essential elements of any legally binding contract?
- Consideration
- Intention to Create Legal Relations
- Agreement (Offer + Acceptance)
