Chapter 7: Offer & Acceptance

Question 1

What is an offer?

Answer 1

A definite promise to be bound provided that certain specific terms are accepted. Case: Gay Choon Ing

Question 2

What are the 2 types of contracts?

Answer 2

1. Unilateral
2. Bilateral

Question 3

An example of a unilateral offer?

Answer 3

Carlill & Carbolic Smoke Ball Company (1893)

Question 4

What is the definition of invitation to treat?

Answer 4

An expression of willingness to enter into negotiations with the other party. There is no intention to be bound.

Question 5

What is an exception of an advertisement being an invitation to treat?

Answer 5

When the buyer is guided on screen step by step by the seller until he clicks “I accept” and pays the purchase price online.

Question 6

What are 2 consequences of displays of goods for sale being an invitation to treat?

Answer 6

1. Shop does not have to sell the goods at the marked price especially when misquoted.
2. Buyer cannot insist upon buying a particular item on display even if the shop has run out of stock.

Question 7

Are auction sales invitation to treat?

Answer 7

General Rule: The call for bids by the auctioneer is an invitation to treat. The bids made by those present at the auction are offers. Offer is accepted with the fall of the hammer.

Question 8

What is the general rule for tenders?

Answer 8

General Rule: Are invitations to treat and not offers (Spencer v Harding (1870)

Question 9

What is the definition of a Termination of Offer? How many ways are there to terminate and offer?

Answer 9

If an offer is terminated before acceptance, no contract would exist. There are five ways to terminate an offer.

Question 10

What are the 5 ways to Terminate an Offer?

Answer 10

1. Revocation
2. Rejection/Counter-Offer
3. Lapse of Time
4. Failure of a Condition
5. Death

Question 11

What is the definition of Revocation?

Answer 11

1. Revocation: Offeror can revoke the offer anytime before acceptance. However, revocation must be communicated to the offeree.

Question 12

What are the 4 ways under revocation to terminate a contract?

Answer 12

1) Communication by a reliable 3rd party to offeree
2) Revocation need not be Explicit
3) No Legal Obligation to Keep Offer Open
4) Subsequent Offer

Question 13

What is the definition of a Subsequent Offer?

Answer 13

An offer may be revoked when it is replaced by a subsequent offer. The second offer must state that it supersedes the earlier offer.

Question 14

What is the definition of Rejection/Counter-Offer?

Answer 14

Offer is terminated when it is rejected or when offeree issues counter-offer. Counter-offer has 2 distinct effects. Rejects original offer and stands as a new offer capable of being accepted by offeror.

Question 15

What is the definition of Lapse of Time? Hint: 2 parts

Answer 15

1) When offeror has specified a time limit, offer will lapse if not accepted within that time.

2) If the offeror has not specified a time limit it will lapse after a reasonable time.

Question 16

What is the definition of Failure of a Condition?

Answer 16

If conditions are not satisfied, the offer cannot be accepted.

Question 17

What is the definition of termination due to Death? Hint: 2 POVs

Answer 17

1) When offeror dies, that offer will terminate if the offeree knows that they died.

2) If offeree dies before accepting offer then offer is no longer capable of acceptance.

Question 18

What is the definition of Acceptance?

Answer 18

A final and unqualified expression of assent to the terms of an offer. Case: Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal. Textbook at p 172, [7.8]

Question 19

What are the 2 criteria Acceptance must satisfy?

Answer 19

1) Acceptance must be final and unqualified
2) Acceptance must be communicated to the offeror

The offeree must agree to all the terms contained in the offer. Any attempt on his part to introduce new terms would result in a counter-offer.

Question 20

What are the 9 modes of communication that the criteria “Acceptance must be communicated to the offeror.” applies?

Answer 20

1) Acceptance through conduct.

2) For instantaneous communication, acceptance must be received by offeror.

3) Silence is not acceptance.

4) Ignorance, cannot accept offer of which he has no knowledge of.

5) Cross-offers. There will be no contract.

6) Battle of forms: Acceptance must be final and unconditional on the latest form, not merely a counter offer.

7) Effective communication of acceptance must actually be heard.

8) Offeree believes that his message has been received, he will be bound.

9) No communication needed if waived.

Question 21

What are the EXCEPTIONS for modes of communication that the criteria “Acceptance must be communicated to the offeror.”?

Answer 21

1) Waiver of Communication
2) Postal Acceptance Rule

Question 22

What are the conditions for the Postal Acceptance Rule?

Answer 22

1) Reasonable for the offer to be accepted by post.
2) Letter of Acceptance must be properly stamped and addressed.

Question 23

What is Certainty of Terms?

Answer 23

A legal requirement of a valid offer to contract; that it must be precise and definite in order to be subject to acceptance.

Question 24

Are Electronic Contracts valid?

Answer 24

Yes.

Question 25

How to distinguish between an invitation to treat vs an offer?

Answer 25

An invitation to treat is considered to be considered as an invitation to make offers, unless it clearly indicates the intention of the party making the proposal is to be bound in case of acceptance.

Question 26

What about Automated Message Systems?

Answer 26

s15. A contract formed by the interaction of an automated message system and a natural person. They shall not be denied validity or enforceability.

Question 27

How about Errors in Electronic Messages?

Answer 27

s16. —(1) They have the right to withdraw the portion of the electronic communication in which the input error was made.

s16(2) Subsection (1) shall not apply unless they-
(a) notify the other party of the error as soon as possible
(b) have not used or received any material benefit or value from the goods or services.

Question 28

What are the 2 rules for Acceptance via email/SMS/instant messaging service?

Answer 28

1) General Receipt Rule (instantaneous)
2) Postal Acceptance Rule (not instantaneous)

Question 29

Under Postal Acceptance Rule (Not instantaneous), when is an electronic record deemed to be dispatched?

Answer 29

s13.(1) The time of despatch of an electronic communication is —
(a) the time when it leaves an information system under the control of the originator; OR
(b) the time when the electronic communication is received.

Question 30

Under General Receipt Rule (instantaneous), when is an electronic record deemed to be received?

Answer 30

s13(2) When the time of receipt of an electronic communication becomes capable of being retrieved by the addressee at their electronic address.
s13(3)
s13(4)
s 13(5)