Agreement - Offer and Acceptance

Question 1

What is offer and acceptance?

Answer 1

For a contract to exist, one party (the offeror) needs to make a clear and certain offer displaying an intention to be bound and the other party (the offeree) needs to communicate an unequivocal acceptance.

Question 2

What is a bi lateral contract?

Answer 2

both parties assume an obligation to each other, by making each other a promise to do something,

Question 3

What is a uni lateral contract?

Answer 3

A unilateral contract is made when the other party ‘accepts’ the offer by performing the act in accordance with the requirements of the offer

Question 4

What is the objective approach to agreement?

Answer 4

The court is not concerned with the inward mental intent of the parties but rather with what a reasonable man would say was the intention of the parties,

Question 5

What is key law in Smith v Hughes (1871)

Answer 5

Objective approaxh to agreement taken

Question 6

RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Co (UK Production) [2010]

Answer 6

Objective approaxh to agreement taken

Question 7

Hartog v Colin & Shields [1939]

Answer 7

Hare skns sold

Question 8

What does Trietel say about offer and agreement?

Answer 8

Trietel says:

, ‘an offer is 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 9

Can an offer be oblique?

Answer 9

No - must be clear and certain

Question 10

What happened in Gibson v Manchester City Council?

Why was the offer not binding?

Answer 10

The wording, ‘may be prepared to sell’, used by the City was deemed to lack the requisite intention to be legally bound. Held– not binding

Question 11

What happened in Storer v Manchester City Council:

why was the wording significant?

Answer 11

‘If you will sign the agreement and return it to me I will send you the agreement signed on behalf of the corporation in exchange.’ (Emphasis added). Held– binding

Question 12

What did Lord Denning MR concluded in Storer

Answer 12

that the Council’s wording did demonstrate intention to be bound, stating: ‘In contracts you do not look into the actual intent in a man’s mind. You look at what he said and did

Question 13

Are ads in papers offers?Or invitations to treat?

Name a case that proves or disproves?

Answer 13

An invitation to treat is not an offer - Partridge v Crittenden [1968]

Question 14

What happened in Partridge v Crittenden [1968]

Answer 14

notice was placed in the classified advertisement page of a periodical for bird fanciers. The defendant was charged with the offence of unlawfully offering for sale a wild live bird contrary to s.6(1) and sch. 4 of the Protection of Birds Act 1954.
Hels- it was held that the advertisement was merely an invitation to treat, not an offer for sale,

Question 15

What happened in Harris v Nickerson (1873)

Answer 15

, an auctioneer, advertised that he would sell certain goods, including office furniture, on a specified date and at a specified location. H attended the sale with the intention of buying some office furniture. N withdrew the office furniture from the sale. H claimed damages for breach of contract, contending that the advertisement was an offer which he had accepted by attending the sale.

HELD: the advertisement was merely a statement of intention to hold a sale and as such amounted to an invitation to treat and not a contractual offer capable of acceptance

Question 16

What case concerns auction advertising?

Answer 16

Harris v Nickerson (1873)

Question 17

Grainger & Son v Gough [1896

Answer 17

] AC 325 when it was concluded that a price list circulated by a wine merchant was nothing more than an invitation to treat as, inevitably, the stocks of wine of any particular description would be limited.

Question 18

what case shows general rule concerning advertisements does not apply where the advertisement amounts to a unilateral offer?

Answer 18

Carlill v Carbolic Smoke Ball Co. (1893): the defendants, the proprietors of a medical preparation called ‘The Carbolic Smoke Ball’, issued an advertisement in which they offered to pay £100 to any person who used one of their smoke balls in a specified manner for a specified period but who nevertheless still contracted influenza.

Question 19

what case shows general rule concerning advertisements does not apply where the advertisement amounts to a unilateral offer?

Answer 19

American authority of Lefkowitz v Great Minneapolis Surplus Store 86

Question 20

Is the display of goods for sale an offer or an Invitations to treat

Answer 20

that price-marked goods displayed in a shop window are not an offer for sale but an invitation to treat, even when shop actually expressly designates that the goods are an offer; a shop’s ‘special offer’ usually amounts to no more than an invitation to treat.

Question 21

What happened in Fisher v Bell?

Why was it seminal?

Answer 21

Fisher v Bell [1961 the defendant displayed a flick-knife behind which was a ticket bearing the words ‘Ejector knife – 4s’.
HELD: the display of the flick-knife was merely an invitation to treat, not an offer for sale. The conviction was overturned.

Question 22

What happened in Pharmaceutical Society of GB v Boots Cash Chemists [1953]

Answer 22

HELD by the Court of Appeal: the display of goods on the shelves was an invitation to treat. An offer was made by the customer when he presented the goods at the cash desk.. As the pharmacist supervised the transaction at the cash desk, no offence had been committed.

Question 23

Are invitations to tender an offer?

Answer 23

No. They are an invitation to treat.

Question 24

Is the requestor is therefore free to accept or reject any tender?

Name a supporting case

Answer 24

Spencer v Harding (1870) LR 5 CP 561: a circular was sent out whereby stock was offered for sale by tender.. The plaintiff submitted the highest bid but the defendants would not accept it. HELD: there was no contract.

Question 25

What could have changed the outcome in Spencer v Harding (1870)?

Answer 25

The circular was simply a proclamation of intention and wasd thus an invitation to treat; So in Spencer itself, the court stated that had the circular gone on to state ‘and we undertake to sell to the highest bidder’, this would have constituted an offer to sell to the highest bidder, to be accepted by making the highest bid.

Question 26

Name a case where a company was legally obliged to accept the highest tender.

What were the facts?

Answer 26

Harvela Investments Ltd v Royal Trust Co. of Canada (CI) Ltd [1985] Ctwo firms were invited to submit sealed bids for a block of shares. A commitment to accept the highest bid was made. The court held that there was an obligation to sell to the highest bidder

Question 27

Can an invitationto tender give rise to a contractual obligation to consider the tender

Name a case

Answer 27

Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195. Here the plaintiff club and six other parties were invited by the Council to tender for a concession to operate pleasure flights from the airport. Tenders were to be submitted by a deadline of 12 noon on a specified date. The club’s tender was delivered to the designated box at 11am on the day in question but was not received, as the Council failed to clear the box at the noon deadline.

Held - bound to consider it

Question 28

What was the reasoning in Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990]

Answer 28

HELD: that an invitation to tender could give rise to a binding contractual obligation to consider tenders conforming to the conditions of tender in these circumstances, because: (1) the tenders had been solicited by the Council from specified parties who were known to the Council; (2) there was an absolute deadline for submission; (3) the Council had laid down absolute and non-negotiable conditions for submissions.

Question 29

What is the significance of Payne v Cave (1789) - auctioneer’s request for bids is an invitation to treat. The bidder makes an offer which the auctioneer is then free to accept or reject.

Answer 29

auctioneer’s request for bids is an invitation to treat. The bidder makes an offer which the auctioneer is then free to accept or reject.

Question 30

who is the offeror and who is the offeree in auctions?

How is the contract ratified?

Answer 30

Offeror is the bidder, offerree (who accepts offer is the)auctioneer.
The deal is accepted by the fall of the hammer.

Question 31

What happens in auction sales that are held ‘without reserve’ (i.e. involving a promise to sell to the highest bidder and promising not to apply any reserve price?)

Name a case :

Answer 31

auctioneer may be sued for breach of contract if he refuses to sell to the highest bona fide bidder.

Warlow v Harrison (1859)

Question 32

where the sale is expressed to be without reserve, is it a bi-lateral or unilateral contracts?

Why?

Answer 32

It is both.

The unilateral contract based on the promise that the auction will be without reserve.
The highest bidder is not, however, entitled to the goods since this is dictated by the bilateral contract for sale.

Question 33

What is the outcome of Barry v Davies [2000]

Answer 33

auction sales that are held ‘without reserve’ (i.e. involving a promise to sell to the highest bidder and promising not to apply any reserve price?) are both bi-lateral or unilateral contracts?

Question 34

Are website offers offers, or invitations to treat?

Answer 34

invitations to treat

Question 35

. What happens when pricing mistakes occur on websites?

Answer 35

the retailer is not bound to honour the advertised price.

Question 36

Hartog v Colin and Shields [1939]

Answer 36

Hare pelts misadvertised as to the price per unit. Buyer tried to take advantage of the oversight and bind party to the errenous pricing.

Courts wouldn’t allow it.

Question 37

How can an offer be terminated?

State 3 avenues

Answer 37

a) rejection
b) lapse; or
c) revocation.

Question 38

Does a counter offer act as a rejection of the original offer? Or is it a request for more info?

Name a supporting case

Answer 38

Hyde v Wrench (1840) . Where an offeree makes a counter-offer, the original offer is deemed to have been rejected and cannot be subsequently accepted.

Question 39

What happened in Hyde v Wrench (1840) ?

Answer 39

Wench offered to sell H a farm for £1,000; H made a counter-offer of £950. On 27 June, W rejected the counter-offer. On 29 June, H made a purported acceptance of the offer of 6 June.
HELD: the counter-offer operated as a rejection of the original offer. There was therefore no contract. Where a counter-offer is accepted, its terms and not the terms of the original offer become the terms of the contract.

Question 40

what is the ‘battle of the forms’ - why does the person who fires the last shot win?

Answer 40

Difficulties can occur when an offer is made on the standard terms of the offeror and the acceptance is made on the standard terms of the offeree. If these terms are different in any way, the offeree has in fact made a counter-offer.

Question 41

What happened in Butler Machine Tool Co v Ex-cell-o Corporation

Answer 41

HELD: the contract had been concluded on the buyers’ rather than the sellers’ terms and was therefore a fixedprice contract. The buyers’ order was a counter-offer which the sellers had accepted by completing and returning the acknowledgement.

Question 42

How do you differentiate a counter-offer from a request for more information

Answer 42

If, on receipt of an offer, the offeree attempts to clarify the extent and terms of the offer, or to offer, the offeree’s request may be construed as a request for further information.

Question 43

What were the facts in Stevenson, Jacques & Co. v McLean (1880)

What was the courts verdict?

Answer 43

Saturday the defendant offered to sell to the plaintiffs 3,800 tons of iron ‘at 40s net cash per ton, open till Monday.’ On Monday morning the plaintiffs telegraphed: ‘Please wire whether you would accept 40 for delivery over two months, or, if not, the longest limit you would give.’ Having received no reply, at 1:34pm, the plaintiffs despatched a telegram accepting the original offer. At 1:25pm the defendant despatched a telegram to say that he had sold the iron to a third party. The plaintiffs brought this action for breach of contract, contending that the defendant’s offer was still open when he sent the telegram of acceptance
HELD: the plaintiff had not made a counter-offer but had made a mere enquiry which did not serve to reject the offer. A binding contract had been made when the plaintiffs sent the telegram accepting the offer

Question 44

What 3 circumstances can cause a Lapse of an offer

Answer 44

An offer may lapse and thus become incapable of acceptance:
a) by passage of time- Ramsgate Victoria Hotel Co. v Montefiore (1866) – offeree must reply in a reasonable period
b) by the death of one of the parties;
or c) by the non-fulfilment of a condition precedent Financings Ltd v Stimson [1962] (expressed or implied)

Question 45

What case says offeree must respond in a reasonable period of time?

Answer 45

Ramsgate Victoria Hotel Co. v Montefiore (1866) – offeree must reply in a reasonable period

Question 46

What does Duff’s Executors’ Case (1886) say about an offer becoming incapable of acceptance

Answer 46

It seems that the death of the offeree will cause the offer to lapse and cannot be accepted after the offeree’s death by the offeree’s representatives.

Question 47

What was the case of Kennedy v Thomassen (1929)

What was the outcome?

Answer 47

an offer to buy annuities was accepted by the solicitors of the annuitant, who were ignorant of the fact that she had since died.
HELD: the acceptance was ineffective on the basis that the solicitor’s authority was terminated by the death of their client.

Question 48

What was the law in Bradbury v Morgan (1862) ?

Answer 48

if the offeree knows that the offeror has died, the offer will lapse;
if the offeree is unaware of the offeror’s death, it probably will not - as seen inBradbury v Morgan (1862)

Question 49

What happens where there is Non-fulfilment of a condition ?

Answer 49

Where the offeror makes his offer subject to the fulfilment of a condition, failure on the part of the offeree to fulfil the condition will prevent acceptance from taking place.

Question 50

Must a non-fulfilment of a condition be expressed or can it be implied?

Name a case supporting your view with an outline of the facts…

Answer 50

It can be implied - from the circumstances of the case. For example, in Financings Ltd v Stimson [1962] 1 WLR 1184, it was held that a customer’s offer to take a motor car under a hire purchase agreement (the offer being made to a finance company) was subject to an implied term that the car remained in the same condition up to the time of the acceptance of the offer. In this case, the car was stolen from the dealer’s premises and damaged before the finance company accepted the customer’s offer and, in consequence, the customer was not bound by any agreement.