Contract- Chapt 2- Agreement Flashcards
Definition of an offer for exam
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
Offeror
Person who makes the offer
What is a unilateral contract/offer?
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
What is a bilateral contract/offer?
A bilateral contract is where both parties have obligations -ie: “I will build your extension in exchange for your promise to pay me £10000
What an offer consist of?
(5)
What about meaningless terms?
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)👎
Offer must be communicated
To offeree
🛳
Which case?
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.
Unilateral offer (accepted by taking up) Exception to rule on adverts!!!!!
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.
Difference between offer and invitation to treat
Cases
And exception to rule!!!! Which case???
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
Auctions are invitations to treat, not offers
Which case?
Bidders make an offer to buy that is accepted when auctioneers drop hammer (British Car Auctions v Wright 1972
Mere statements of price are not offers
Clifton v Palumbo 1944
Gibson v Manchester CC 1979
What do you need to prove the fact of agreement?
i.e.- is offer/acceptance (agreement) subjective or objective?
Which 2 cases?
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
Auctions are invitations to treat
Which case?
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.
How to end an offer
4
Will generally end when:
- Offeror withdraws offer (revocation) (Payne v Cave)
- offeree rejects offer (including making counter offer(Hyde V Wrench)
- Lapse of time( Ramsgate Victoria Hotel v Motelfiore 1866)
- Acceptance of offer
Revocation of offer
4 points/cases
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)
Ways that an offer can be rejected
And example of when it can’t ( not a counter offer!)
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)
Lapse of time affecting offer and agreement
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
More than 1 offer.
Which case?
Relevant points of law
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.
Counter offers v requests for further info
Which case?
Which point of law?
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.
What is acceptance?
How can an offer be accepted?
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
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
Hyde V Wrench 1840
Communication of acceptance-
Acceptance must be communicated or it doesn’t count.
Which cases(2)
Entores v Miles Far East Corporation 1955 (telex)
Felthouse v Bindley 1862 🏇
If Offeror requires specific method of acceptance, that must be used
Which case?
Exception (1)
Eliason v Henshaw 1819
If another way is equally as quick, that will do(Yates v Pulleyn 1975)
Acceptance must be communicated by someone authorised to accept
Which case?
Powell and Lee 1908
Offeror can’t stipulate that silence = acceptance
Which case?
🏇
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
Offeree
Person to whom the offer is made
Acceptance by conduct
Which case?
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.
Exceptions to the general rule in communication
Acceptance of unilateral terms/ accept by by actions so no need to tell the Offeror
Which cases?
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
Acceptance by modern communication (text or email)
2 cases-
Rule?
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
Counter offer. Who can reinstate the original offer?
Defintion of a counter offer?
Only The original Offeror can reinstate the original offer
Rejects old offer AND creates a new one
Hyde v Wrench 1840
Legal difference between offers and invitations to treat
*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)
Situations that are usually invitations to treat
5
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)
What is acceptance?
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
What are adverts usually?
Say that they are Usually invitations to treat (Carlill is the exception)
Partridge v Crittenden
Who can an offer be made to?
Individual
Group
World (Carlill v carbolic smoke ball co 1893)
Describe the courts approach to negotiations, standard form contracts and the “battle of the forms”
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.
Battle of the forms
What is this?
Which case to use?
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
Offers made by post will be valid when?
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!!!
Which cases to use for offers generally?
3
Hyde v Wrench 1840
Taylor v Laird (must be clear)
Gibson v Manchester CC 1979 (not an offer)
If voicemail/ email during office hours left accepting offer but no one listens is it valid?
For private seller..
For business..
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
What is the legal effect of an advert
Adverts usually invitations to treat (partridge).
Define
Offers if them made could be accepted/rejected
