Chapter 3: Offer Flashcards
What is the definition of an offer
The expression of willingness to be bound under all or certain terms of a contract with the intention it becomes binding upon acceptance
What is the definition of an invitation to treat
The expression of willingness to negotiate terms of a contract with the intent that new contract will be created at a later stage
What is an agreement
- consesus ad idem (meeting of the mind) between 2 or more parties
- To become an enforceable contract the agreement has to be supported with consideration
What are the 2 ways to identify if an agreement exists
- The Eurymedon’s case
Identifying the marked slots for offer, acceptance, and consideration sequentially and there should be no vitating factors (mistakes) - Objective test
reasoning forward & reasoning backward
What are the 5 ways to identify an offer
- Examine pre contractual statements
- Determine if it is an offer or is the statement soliciting for offers
- Examine the definition of offer
- Examine the definition of an invitation to treat
- Examine the cases and how the courts have concluded
What are the 2 legal concepts of an offer
- offer
- Invitation to treat
How can we decide if it is an offer, what are the 2 approaches that are used to do this
Doctrine of judicial precedent and concludes that similar facts will attract similar decisions
Objectivity test
What are unilateral contracts
A promise for an act, where once the act is performed, the contract is binding/concluded
- Usually made to large groups of people, but doesn’t have to be
- terms must be clear as to what the Act is required to constitute acceptance
- Does not impose any obligation on the other party to do the act (it is their own willingness to do it)
- Doesn’t need to be communicated to offeror
Carlil v Cabolic Smoke Ball Co.
What are bilateral contracts
Offer (treitel)
* No requirement fior for the offer to be in any particular form. Can be written, oral or by conduct
Invitation to treat
* negotiating
What are the 4 types/methods of offers
- Advertisements
- Display of goods for sale
- Auctions
- Tenders
What are the 2 types of advertisements?
Selling goods or services (ITT)
Advertisements for rewards (uni)
Partridge v Crittenden
Facts: Advertised cocks and hens for sale, then was charged with offence of ‘offering for sale’ wild live birds contrary to Protection of Brids Act 1954
Held: ad was bilateral transactions (ITT), as he only sells when he has stock, and undergoes negotiations with his customers
Parker LJ stated that it makes business sense otherwise advertiser could find himself contractually obliged to sell more goods than he owned
Carlil v Cabolic Smoke Ball Co.
Facts: D (vendors) of a medical preparation manufacturer placed a newspaper ad
$100 pounds to person who contracts influenza, or any disease after using their ball 3 times daily for 2 weeks
C in faith of the ad bought 1 ball and used it and got influenza
Held: ad was an offer. D was liable for anyone who before it is restricted, performs the condition
Fisher v Bell
Facts: Defendant had knife displayed at window with a price tag, statute made it a criminal offence to ‘offer’ such flick knives for sale
Held: conviction was quashed as goods on display in shops are not offers but an ITT
Court appealed the literal rule of statutory interpretation
Display of goods in a ship window is ITT, as the offer is made by customer when he presents the goods on the cash register
Pharmaceutical Society of GB v Boots Cash Chemist
Facts: A pharmacy was selling their products where customers pick up goods and put into their basket and take them to cashier to pay
D was charged with breach of Section 18 (1) of the Pharmacy and Poison Act 1993 where sale of drgus take place under suipervision of registered pharmacists
The pharmacist at the cashier is authoriesed to prevent customer from purchasing any drug if he say fit do do so
Held: sale of goods only took place at the cashier, and not when goods were taken from the shelves
Display of goods is ITT
What is the general rule in auction sales
auctioneer by inviting bids is making an invitation to treat. Offer is (1st) made by the bidder which is accepted when the auctioneer (2nd) strikes down his hammer or an other customary manner
Harris v Nickerson
Facts: D auctioneer advertised that certain items including office furniture would be sold by him at Buury St Edmunds on a certain day
Condition was ‘highest bidder to be the buyer’. C attended the sale and office furniture was not up for sale
C brought action to recover 2 days of loss time. Said that it would be extremely inconvenient if the auctioneer had to give a notice everytime they withdraw something they said they were selling
Held: Auction was ITT. C didn’t even have a contractual agreement that was binding with the auctioneer, there was no acceptance to anything
Warlow v Harrison
Facts: C had bid for a pony at D’s auction but sold it to himself (the highest bidder), there was no reserve
His appeal against rejection of his claim against the auctioneer, the appeal succeeded after court allowed amendment
Held: Baron Martin held there was a contract with the auctioneer that sale was to be without reserve
What is the rule when auction contracts are made without reserve
Contracts that are made without reserve (meaning to say there’s no conditions that they instated, then by nature it should be sold to the highest bidder), in times of breach, has the right of action against the auctioneer
Barry v Davies
Facts: D was selling 2 brand new engine analysers, each for about $14,521 pounds
They failed to get the price they bargained for, and C offered $200 for each machine (the highest bid then), but they refused to sell it
Few days later they sold $750 through an advert magazine
C brought proceedings against D contending that in an auction without reserve price the auctioneer was bound to deliver goods to the highest bidder
Held: holding of an auction for sale without reserve is an offer by the auctioneer to sell to the highest bidder
What is the general rule of tenders
nature of tenders is ITT
Offer is made by the person who (1st) submits the tender (tenderee), and the acceptance is made when (2nd) the tenderer accepts one of them
Spencer v Harding
Facts: D advertised sale by tender of the stock in trade belonging Eilbeck & Co. They specified where it can be viewed and must be paid for in cash
No reserves stated
C made the highest bid but D refused
Held: total absence of any words to intimidate that the highest bidder is to be the purchaser
Not always the highest bidder is winner, unless there are reserves
Harvela Invetments v Royal Trust Co. of Canada
exception to the general rule
Facts: D decided to sell shares where 2 parties most likely to be interest to submit sealed competitive offer and stated they would accept the highest offer (made a reserve) received by them which compiled with terms of invitation
C tendered fix bid of $2.175M
D tendered a referential bid of $2.1M or $101,000 more than any other offer, whicher is higher. D accepted the second D bid
Held: D is bound to accept C’s bid as it was a unilateral contract to sell shares to the highest bidder
In this case is offer
Blackpool Fylde Aero Club v Blackpool Borough Council
Facts: D (local authority) invited tenders for coincession to operate pleasure flights from Blackpool airport
Satiated that ‘council do not bind themselves to accept all or any tender.’
No tender received after the last date and time specified (12 March 1983, 12pm) shall be admitted for consideration
C posted bid at 11 March, 11am, but was letter was left in letterbox until 18 March
C’s bid was not considered by the Council cause it was late
Held: D’s contractually obliged to consider C’s tender and were therefor liable in damages
What are the 2 types of terminations of offers
Operation of law
Acts of parties
What are the 3 types of acts of parties
- Rejection by offeree
- Counteroffer or request for more infroamtion
- revocation (withdrawal)
What are the 3 types of operation of law
- Death
- Time lapse
- Destruction of subject matter
Counteroffer
Hyde v Wrench
Counter offer
Facts: D offered to sell a farm to C for $1000 pounds which C responded by offering $950, through his agent. D rejected offer thenm C accepted D original offer
D didn’t want a price lower than $1000 so when C did the counteroffer he just declined
Held: No valid contract. C made his own counter offer which rejected the offer previously made
Stevenson v McLean
held: Held there was no counter proposal (claimant said it was a CO)
The words used in the telegram by C was nothing specific by way of an offer or rejection, but merely an inquiry
Which should have been answered and not treated as a rejection of the offer
What are the rules of lapse of time? Can an offer be revoked in this case?
1 case
Lapse of time is when there is a time stipulated by the offeror, a deadline to communicate acceptance. Time given should be that a reasonable man would expect a reasonable amount of time, given the situation or circumstances of the contract
During this, anytime before the deadline, the offeror can revoke the offer, provided the offer is communicated to the offeree - Routledge v Grant (1828)
Can lapse of time be extended?
1 case
Lapse of time will ultimately end after the stipulated time, unless there was a collateral contract with consideration provided to keep the offer open till the time stipulated - Offord v Davies (1862)
If there was consideration (10rm to extent offer) then the time can be extended. But then the offeror is now bound to the new collateral contract.
collateral contract is contract made on the side
Destruction of subject matter
Taylor v Caldwell
destruction of subject matter
Facts: D granted C’s license to use surrey gardens and music hall for series of concerts
Contract concluded but before performance happened, the hall burnt down
Held: Held that destruction of the hall rendered performances, and that the contract automatically ended
If subject matter is destroyed after the formation of the contract, the contract can be discharged by way of frustration
Lapse of time
Ramsgate Victoria Hotel v Montefiore
Lapse of time
Facts: 8 June D made application for shares and paid deposit
Secretary submitted list of subscribers including D to directors who said its not advisable to it out immediately
8 November D received no commuincaiton so withdrew the application. 23 November shares allotted to D and letter sent requesting balance
Held: allotment must be made within a reasonable time. Since it wasn’t made therefor D not bound to accept shares allotted
What are the elements of revocation of an offer
- Anytime before acceptance
- Revocation of the offer has to be communicated to the offeree
take note with unilateral offers is different case
Revocation can be done by the offeror or
1 case
Dickinson & Dodds - A realiable third party (someone they know, or are commonly known)
What form of offer can’t be revoked or doesn’t apply to revocation
1 case
Postal rule - Bryne v Van Tien Hoven
Delay in the revocation to the offeree will cause big issue
What is the general rule for revoking unilateral offers
- Can be revoked anytime before the acceptance, although if they have already committed to the performance - it isin’t fair (expenses & time spent)
Errington v Errington
revoking unilateral offers
Facts: Offeror (father) sold offered to sell house with monthly mortgage to son and daugter. Father died and PR (personal representatives) of his estate sought to evict them
Held: Father’s promist was a unilateral offer, which can’t be revoked once the couple had embarked upon the performance provide they did not leave the performance “incomplete or unperformed”
(Offeror must have knowledge that the oferee has embarked/started the act of acceptance)
Daulia v Four Mill Bank Nominees
revoking unilateral offers
Facts: offeror was’t fair to the offerees, needed his signature to complete acceptance. Offeror got a better deal and didn’t want to sign
Held: Unilateral contract
Goff LJ (obiter): offer can’t be unfair or impossible to complete
Soulsbury v Soulsbury
revoking unilateral offers
Held: in the case of classic unilateral offer, once promisee acts on promise in offer, promisor can’t revoke the offer
