Contract- Chapt 2- Agreement

Question 1

Definition of an offer for exam

Answer 1

An expression of willingness to contract on certain terms on which the offeror is prepared to be legally bound following acceptance.(Treitel)

Gibson v Manchester City c 1979/ RTS v Flexible systems v molkerei 2010)- objective

Offer is objective (Smith v Hughes)

Can be made orally. In writing or by conduct (brogden )- not offers

Taylor v laird - offer must be clear

Question 2

Offeror

Answer 2

Person who makes the offer

Question 3

What is a unilateral contract/offer?

Answer 3

A unilateral contract results form a unilateral offer

The Offeror says to offeree “IF you do something, then I promise to do something in return “

Therefore the offeree does not have to do anything but if he does he will get something in return

Carlill v carbolic smoke ball company

Question 4

What is a bilateral contract/offer?

Answer 4

A bilateral contract is where both parties have obligations -ie: “I will build your extension in exchange for your promise to pay me £10000

Question 5

What an offer consist of?
(5)

What about meaningless terms?

Answer 5

An expression of willingness to contract on certain terms with the intention that it shall become binding on acceptance.
May be oral, in writing or by conduct

Terms must be sufficiently certain

If term is meaningless then court may ignore it and contract still valid (Nicolene 1953) 👍🏻

If term central to contract then contract defeated (Scammell v Ouston 1941)👎

Question 6

Offer must be communicated
To offeree
🛳

Which case?

Answer 6

Taylor v laird 1856

Offer must be communicated to offeree

Ships captain formally resigned then assisted the crew in taking ship back home. Argued he had a new contract of emp. His former employers didn’t know about offer so couldn’t accept and didn’t have to pay him.

Question 7

Unilateral offer (accepted by taking up)
Exception to rule on adverts!!!!!

Answer 7

Carlill

Pol- you can make an OFFER to the whole world through an advert (Unilateral offer) and then it is a contract with whoever accepts it.

“An advert is not a contract with the whole world, it is an offer made to all be world”
Legal principle – held that the offer in the advertisement was a unilateral offer to the world at large which was accepted by the claimant. This unilateral offer waived the need for communication of acceptance prior to a claim being made on the basis of it. The claimant was therefore entitled to the £100.

Question 8

Difference between offer and invitation to treat

Cases

And exception to rule!!!! Which case???

Answer 8

An invitation to treat is merely an invitation for customers to submit an offer. (Invite for offers/invite to open neg)
While it indicates a willingness to deal, it is distinguishable from an offer in that it lacks an intention to be bound.

Partridge v Crittenden 1968 (bird in magazine)

Fisher v Bell 1960- display of goods for sale was an invitation to treat, not an offer

If there is a definite promise to be bound, the advert is an offer (Carlill) but this is the exception to the general rule on adverts

Question 9

Auctions are invitations to treat, not offers

Which case?

Answer 9

Bidders make an offer to buy that is accepted when auctioneers drop hammer (British Car Auctions v Wright 1972

Question 10

Mere statements of price are not offers

Answer 10

Clifton v Palumbo 1944

Gibson v Manchester CC 1979

Question 11

What do you need to prove the fact of agreement?

i.e.- is offer/acceptance (agreement) subjective or objective?

Which 2 cases?

Answer 11

It is objective. (Reasonable person test)
There must be offer and acceptance

Case- Gibson v Manchester City council 1979
And confirmed in RTS flexible systems v molkerei 2010

Question 12

Auctions are invitations to treat

Which case?

Answer 12

British car auctions v wright

Invitation to treat

Auctioneer wasn’t offering an unroadworthy car for sale (a crime), he was merely making an offer to treat.

Question 13

How to end an offer

4

Answer 13

Will generally end when:

1. Offeror withdraws offer (revocation) (Payne v Cave)
2. offeree rejects offer (including making counter offer(Hyde V Wrench)
3. Lapse of time( Ramsgate Victoria Hotel v Motelfiore 1866)
4. Acceptance of offer

Question 14

Revocation of offer

4 points/cases

Answer 14

Offeror can revoke at any timeb4 acceptance (Payne v Cave)

Acceptance is valid as soon as in post (Adams v Lindsell)

Revocation only valid once received (Byrne v Van Tienhoven 1980)
Revocation must be communicated-the offeror must notify (Byrne v Van Tienhoven)
Reasonable 3rd party can revoke offer (Dickinson v Dodds 1876)

Unilateral offers can’t be revoked once offeree has started to perform the requested action (Errington v Errington 1952/ Carlill)

Question 15

Ways that an offer can be rejected

And example of when it can’t ( not a counter offer!)

Answer 15

Saying "no"
Counter offer (Hyde V Wrench 1840)

Battle of the forms. Last to send is on their terms (Butler Machine Tool co 1979)

Revoked by implication (Pickfords v Celestia ltd 2003)

Request for info is not a counter offer (Stevenson, Jacques and co v Mc Lean 1880)

Question 16

Lapse of time affecting offer and agreement

Answer 16

General rule-lapse of time will end an offer. If a time is stated it will end at this time but If not, it will end after a “reasonable time” on case by case basis
Decided by judge

Ramsgate Victoria Hotel v Motelfiore 1866

Question 17

More than 1 offer.

Which case?
Relevant points of law

Answer 17

Pickfords v celestica ltd 2003

Second offer/ revoked by implication

Pickfords issued 2 quotes for removal work. Second quote was new offer that revoked the first.

Question 18

Counter offers v requests for further info

Which case?

Which point of law?

Answer 18

Stevenson, Jacques and co v McLean 1880

D offered to sell iron to c for cash. C asked if he could have credit terms, heard nothing and so accepted original offer.

D assumed the question was a counter offer(and rejected), sold iron to someone else worhout informing C.

Enquiry was not a counter offer, did not end the original offer and therefor D was in breach.

Question 19

What is acceptance?

How can an offer be accepted?

Answer 19

The final and unqualified assent to the terms of the offer. There is no contract until the offer is accepted
Hyde v Wrench no acceptance

Orally, conduct or in writing

Question 20

Acceptance must accept what the offer says.

If it introduces new terms it is a counter offer- which case says this?

Must be final and unconditional

Answer 20

Hyde V Wrench 1840

Question 21

Communication of acceptance-
Acceptance must be communicated or it doesn’t count.

Which cases(2)

Answer 21

Entores v Miles Far East Corporation 1955 (telex)

Felthouse v Bindley 1862 🏇

Question 22

If Offeror requires specific method of acceptance, that must be used

Which case?

Exception (1)

Answer 22

Eliason v Henshaw 1819

If another way is equally as quick, that will do(Yates v Pulleyn 1975)

Question 23

Acceptance must be communicated by someone authorised to accept

Which case?

Answer 23

Powell and Lee 1908

Question 24

Offeror can’t stipulate that silence = acceptance

Which case?

🏇

Answer 24

Felthouse v Bindley 1862

Nephew negotiating sale of horse to uncle.Felthouse wrote to him: “if I hear no more, I consider the horse mine”

Nephew decided to sell at that price and told the auctioneer not to sell. Uncle then sues auctioneer when he sold the horse(claiming sale already completed)

Held- the Offeror cannot stipulate that silence equals acceptance

Question 25

Offeree

Answer 25

Person to whom the offer is made

Question 26

Acceptance by conduct

Which case?

Answer 26

Brogden v metropolitan railway

Draft agreement was never formally accepted

However Coal had been supplied and railway had ordered more

contract was valid despite no communication of the acceptance. The acceptance took place by performing the contract without any objection as to the terms.

Question 27

Exceptions to the general rule in communication

Acceptance of unilateral terms/ accept by by actions so no need to tell the Offeror

Which cases?

Answer 27

General rule is in Felthouse v Bindley

Carlill v Carbolic smoke ball co 1893- offeror may waive need for communication

Postal rule (Adams v lindsell 1818)- valid when sent

Question 28

Acceptance by modern communication (text or email)

2 cases-

Rule?

Answer 28

Thomas v BPE solicitors 2010 (email)

Brinkibon ltd v Stahag und Stahlwarenhandgesellschaft mbh 1982 (telex)

As virtually instantaneous, it would be received and valid instantly if in office hours, otherwise next business day

Question 29

Counter offer. Who can reinstate the original offer?

Defintion of a counter offer?

Answer 29

Only The original Offeror can reinstate the original offer

Rejects old offer AND creates a new one

Hyde v Wrench 1840

Question 30

Legal difference between offers and invitations to treat

Answer 30

*Offers incur liability.(Carlill£
Statement of terms by which the offeror is prepared to be legally bound

*invitations to treat DO NOT! Incur liability
Request to other person to make offer (boots cash chemists/ partridge v crittenden)

Question 31

Situations that are usually invitations to treat

5

Answer 31

Adverts for bilateral contracts - partridge (Carlill is an exception)

Auctions (British car auctions v wright)

Requests for tenders

Displays of goods for sale (fisher v bell/ boots chemists)

Mere statements of price (Gibson/palumbo)

Question 32

What is acceptance?

Answer 32

The final and unqualified assent to the terms of the offer

The acceptance must mirror the offer. (Hyde v Wrench1840

Acceptance of the offer amounts to agreement- consensus ad idem

Question 33

What are adverts usually?

Answer 33

Say that they are Usually invitations to treat (Carlill is the exception)

Partridge v Crittenden

Question 34

Who can an offer be made to?

Answer 34

Individual

Group

World (Carlill v carbolic smoke ball co 1893)

Question 35

Describe the courts approach to negotiations, standard form contracts and the “battle of the forms”

Answer 35

Clarification of the terms of the offer (Stevenson and co v mc lean 1880)wasn’t a counter offer

Battle of the forms (butler machine tool v ex cell-o-corp 1979)
-contract is concluded on the terms submitted by the party who is the last to communicate those terms before performance of the contract commences.

Question 36

Battle of the forms

What is this?

Which case to use?

Answer 36

The last to send his draft of the contract “wins” as each redraft constitutes a new offer

Butler Machine tool v Ex-Cell-O corp 1979

Question 37

Offers made by post will be valid when?

Answer 37

When received rather than when sent (Adams v Lindsell)

Use this case even though it’s not perfect, only case I have about post!

Acceptance by post is valid when posted though!!!

Question 38

Which cases to use for offers generally?

3

Answer 38

Hyde v Wrench 1840

Taylor v Laird (must be clear)

Gibson v Manchester CC 1979 (not an offer)

Question 39

If voicemail/ email during office hours left accepting offer but no one listens is it valid?

For private seller..

For business..

Answer 39

Business
In the case of answer machines and e-mail, acceptance is communicated to the offeror when the offeror could reasonably be expected to have recieved the acceptance.
Entores v miles Far East corp/Thomas v BPE solicitors (email)

Private- person isn’t assumed to have read/listened

Question 40

What is the legal effect of an advert

Answer 40

Adverts usually invitations to treat (partridge).
Define
Offers if them made could be accepted/rejected