Contract Formation

Question 1

what is an offer and what case defined the definition

Answer 1

An offer is defined as clear, definite and explicit and leaves nothing open to negotiation. It is all about the objective intentions of the parties to be bound
This definition was defined in the case of lefkowitz v Greater Minneapolis Superstore

Question 2

what is an invitation to treat and what must be considered?

Answer 2

Invitation to treat is an indication that they are willing to negotiate. It must be decided if the maker of the statement intend to be legally bound by the statement of accepted or was it a declaration of a willingness to do business?

Question 3

what was decided in the case of Carlill v Carbolic Smoke ball Company 1893

Answer 3

Offer must be made with objective intention that it is seriously made

Question 4

Is an auction sale an offer?

Answer 4

• According to s.58 of the sale of goods act 1893.
• The sale is complete upon announcement of auctioneer. it is only an invitation to treat; the bidder makes the offer and the auctioneer rejects or accepts.
• Auctioneer id not liable if sale does not take place.
• this is still the case where they set out a date and time etc.

Question 5

What is a unilateral offer?

Answer 5

A unilateral offer sets out terms, completion of which will be deemed acceptance. Must consist of definite promise to be bound

Question 6

what case was a unilateral offer first brought up in and why?

Answer 6

In the case of lefkowitz v greater Minneapolis superstore the advert said first come first serve. This was an offer specific in nature so it was a unilateral offer. Clerk could not refuse. it gave conditions on how to fulfil so it had finality.

Question 7

what is a tender?

Answer 7

A tender is an invitation to treat except where they promise to accept the lowest offer.

Question 8

Is an advertisement an offer?

Answer 8

Advertisements are not normally binding offers. However, it the court is convinced that the advertisement intended to be binding should a person act on it, this creates a unilateral contract. Must be clear certain and binding. as established in Carlill v Carbolic smokeball

Question 9

What is acceptance?

Answer 9

Tretial defines an acceptance as a final and unqualified expression of assent to the terms of the offer

Question 10

Fact of acceptance - Billings v Arnott

Answer 10

Can be accepted by performing a stipulated action in a unilateral contract

Question 11

what happens when you don’t accept new terms in a contract?

Answer 11

Not accepting a new term constitutes rejection. An acceptance must be final & unequivocal agreement to a stated offer as established in Banner properties v McGurran Construction LTD

Question 12

when can an offer be revoked?

Answer 12

An offer may be revoked at any time up until its valid acceptance, you must follow the prescribed form of acceptance otherwise no valid contract ad established in the case of Walker v. Glass.

Question 13

What happens to acceptance when a new term is not accepted?

Answer 13

Not accepting a new term constitutes rejection. An acceptance must be final & unequivocal agreement to a stated offer as established in the case of Banner Properties v McGurran Construction Ltd 2008

Question 14

What is a counteroffer?

Answer 14

An acceptance can’t prescribe conditions. This will be treated as both a new offer given and a rejection of the old offer as established in the case of Tansey v College of occupational therapists ltd

Question 15

does seeking for information constitute a counter offer?

Answer 15

As established in the case of Stevenson v McClean asking for information does not constitute a new offer

Question 16

Postal rule

Answer 16

offeree is deemed to have concluded the contract upon postage - accepted in the case of sanderson v cunningham

Question 17

Receipt rule

Answer 17

where the method of communication is instantaneous, acceptance is completed when the offeror becomes aware of it

Question 18

Electronic commerce act in regards to acceptance

Answer 18

section 21 states that

1. Unless otherwise agreed, an email is sent when it enters the first information system outside the control of the originator
2. If the receiver designated a receiving system (by sending an email or giving an email address), then the email is deemed to be received when it enters the system.
3. if no receiving system is designated, then the email is deemed to have been received when it comes to the attention of the addressee i.e when he or she downloads and reads the email.
4. unless otherwise agreed, the place of sending and receiving an email is the “ place of business” or the sender and receiver respectively.

Question 19

Does Postal Rule apply to revocation

Answer 19

Postal rule does not apply to revocation, need to actual notice.

Question 20

Describe how lapse of time played a role in the case of commane v. Walsh

Answer 20

Open to acceptance until withdrawn, or until it would be unforeseeable to hold the offeror to it any longer due to time lapse. In this case, 4 months was okay as it was for land, and there was an understanding where would be delay to the cash approval for the parties.

Question 21

describe what was established about death in the case of smith v Woods and Re whelan

Answer 21

knowledge of death will end the offer but if the offeree is not aware of the death, its still valid unless a contract for personal service

Question 22

Explain how a counter offer terminates an offer in the case of Dooley v Egan

Answer 22

The counter offer will destroy an old offer. Here it was the seller saying he could sell one medical cabinet for immediate acceptance - Purchaser said okay i’ll buy two. This was a counter offer, which the seller then had to accept. It was implicit that if they cant do two then he will look elsewhere

Question 23

describe the objective approach

Answer 23

In contract law it is what the parties say or do that matters; not, what they mean. The intention of the individual is judged by means of their outward conduct. A court will not attempt to engage in the futile task of reading the minds of the parties to the contract and will instead look at their words or actions in assessing their contractual intentions.
The leading formulation of this principle is found in Smith v. Hughes

Question 24

what are the essential elements of a valid offer?

Answer 24

The essential elements of a valid offer are:

(a) The terms of the offer must be clear, certain and complete
(b) The offer must be communicated to the other party
(c) The offer must be made by written or spoken words, or be inferred by the conduct of the parties
(d) The offer must be intended as such before a contract can arise

Question 25

how does the Court assess whether a party to a contract intended to make
an offer?

Answer 25

Treitel comments that the test is examined objectively by the Courts as to whether the
party intended to make an offer. Specifically, he comments:
“an apparent intention to be bound may suffice, i.e. the alleged offeror may be bound if his words
or conduct are such as to induce a reasonable person to believe that he intends to be bound, even
though in fact he has no such intention.”

Question 26

what is a bilateral contract?

Answer 26

Bilateral contract is one where both parties promise to perform mutual duties and both parties are bound

Question 27

what is a contract?

Answer 27

offer + Acceptance = AGREEMENT

Question 28

what is the difference between the offeror and the offeree?

Answer 28

The person who makes the offer is known as the offeror; the person to whom the offer is made is known as the offeree

Question 29

what areas has an invitation to treat been explored in?

Answer 29

(a) advertisements
(b) display of goods
(c) Auctions
(d) tenders
(e) some other limited cirumstances

Question 30

Pharmaceutical Society of Great Britain v. Boots Cash Chemists

Answer 30

Boots created the novel supermarket approach. This offer is where the consumer picks the good up and brings it to the counter. The acceptance is the agreement to sell by the shop.

Question 31

what is the rule regarding quotations?

Answer 31

the rule regarding quotations and requests for proposals/information is that they will not constitute an offer ; rather they constituted an invitation to treat

example case: Boyers v. Duke

Question 32

what are the different ways an offer can be terminated?

Answer 32

• Rejection
• Revocation
• Lapse of time
• Death

Question 33

what is rejection?

Answer 33

when an offer is rejected by the offeree it is thereby terminated outright. Rejection may arise by express or implied words of conduct. An offeror is entitled to assume that the offeree has stated his position and to act accordingly.

Question 34

explain the facts of stevenson, jacques and co. v mclean in terms of rejection

Answer 34

It is often the case that the courts must determine between a mere inquiry into alternating the terms of an offer, as opposed to a valid counter-offer.

In stevenson, jacques and co. v mclean a telegram asking whether delivery might take place over a period of four months was held not to be s rejection of the original offer; but merely an inquiry.

Question 35

what is revocation?

Answer 35

As a general rule, an offeror can revoke an offer at any time until it is accepted. This rule applies even where an offer states that it will remain open for a specified time. For revocation of an offer to become effective it must be communicated to the offeree

Question 36

What are the facts of Hyde v Wrench? - Counteroffer

Answer 36

• Defendant offered to sell an estate for £1000. Defendant replied with an offer of £950, which was refused by the plaintiff
  T- he defendant then purported to accept the original offer of £1000
• The court held it did not amount to a binding contract, the counter-offer amounted to a rejection of the original offer, so that the original offer was terminated and was no longer capable of acceptance

Question 37

what are the facts of swan v Miller? - Counteroffer

Answer 37

• A purchaser offered to but premises for £4750, but was unaware of a ground rent to which it would be subject of £50
• The vendors thought that the purchaser was so aware and replied accepting his offer of £4750 “plus £50 annual rent”
• COA held that no contract came into being at this point: the vendor had by this reply sought to impose a new term with the consequence that the reply did not constitute an acceptance of the offer; but, rather a counter-offer

Question 38

what does without reserve mean in an auction?

Answer 38

The court held that the holding of an auction for sale without reserve is an offer by the auctioneer to sell to the highest bidder

Question 39

What are the facts of Warlow v Harrison? - Auction without reserve

Answer 39

Auctioneer advertised horses for sale by auction “without reserve”. Plaintiff was highest bidder for a particular horse, higher offer from owner accepted by auctioneer. Plaintiff succeeded in his action for damages when auctioneer says sale is without reserve he is making an offer – separate contract to the horse itself

Question 40

Silence as acceptance

Answer 40

As a general rule, unless the context clearly indicates otherwise, silence cannot constitute acceptance. This is even the case where the offeror states clearly that silence will be taken to be acceptance

Question 41

what are the facts of felthouse v Bindley? - silence as acceptance

Answer 41

The plaintiff wrote to his nephew offering to buy his horse and stated “if I hear no more about him, I consider the horse mine at that price”
The nephew made no reply but indicated to an auctioneer that the horse was not to be sold. By mistake, the auctioneer sold the horse
The plaintiff sued the auctioneer in conversion. To maintain such an action it was necessary to show that a contract had been concluded in respect of the horse before the date of the auction.
The court of common pleas held tha no such contract had been concluded. There had been no acceptance prior to that date

Question 42

exceptions where silence may operate as acceptance

Answer 42

• If the parties agrees that silence is to amount to acceptance
• If offeree says that his silence can be taken as acceptance
• Where past dealings give rise to a legitimate expectation that silence will suffice
• Unilateral offer requires performance, rather than communication
• Where agreement can be inferred from the conduct of the parties: Billings v Arnott

Question 43

Electronic Commerce Act 2000 S21

Answer 43

“Where an electronic communication enters an information system, or the first information system, outside the control of the originator, then, unless otherwise agreed between the originator and the addressee, it is taken to have been sent when it enters such information system or first information system.

Question 44

emails

Answer 44

The Courts have held that e-mails are strictly speaking not instantaneous as it operates through a service provider; however, the same rules for instantaneous communication apply. i.e. the contract is complete when the acceptance is received by the Offeror.