Contract Law - 1 Offer and Acceptance

Question 1

Storer v Manchester City Council [1974] 1 WLR 1403 - importance

Answer 1

Court is not concerned with inward mental intent but rather with what a reasonable man would say was the intention.
Lord Denning “In contracts you do not look into the actual intent in a man’s mind. You look at what he said and did. A contract is formed when there is, to all outward appearances a contract. A man cannot get out of a contract by saying: ‘I did not intend to contract’ if by his words he has done so.

Question 2

Court not concerned with inward mental state of the parties - rather with what a reasonable man would say was the intention.

Answer 2

Storer v Manchester City Council [1974] 1 WLR 1403

Question 3

Gibson v Manchester City Council [1979] 1 WLR 294 - case

Answer 3

City Treasurer wrote to tenant saying council may be prepared to sell house to you for £2,725 less 20% - £2,180. If you want to make formal application complete form.
Tenant completed the form.
Council changed its policy and advised the tenant they could not proceed with his application.
Held (by HoL) no binding contract because never an offer - merely first step in negotiation.

Question 4

Offer must be clear and certain

Answer 4

Gibson v Manchester City Council [1979] 1 WLR 294

Question 5

Gibson v Manchester City Council [1979] 1 WLR 294 - importance

Answer 5

Offer must be clear and certain

Lacked the intention to be legally bound

Question 6

Storer v Manchester City Council [1974] 1 WLR 1403 - case

Answer 6

‘If you will sign the agreement and return it to me I will send you the agreement signed on behalf of the corporation in exchange. Did demonstrate intention to be legally bound

Question 7

Partridge v Crittenden [1968] 1 WLR 1204 - importance

Answer 7

General rule regarding adverts is that they are invitations to treat.

Question 8

General rule is that adverts are invitations to treat

Answer 8

Partridge v Crittenden [1968] 1 WLR 1204

Question 9

Carlill v Carbolic Smoke Ball Co (1893) 1 QB 256 - case

Answer 9

Carbolic Smoke Ball issued an advert which offered £100 to any person who used their smoke ball in a specified manner for a specified period and still contracted influenza.
They proclaimed that they had deposited £1,000 in a named bank to show sincerity.
Plantif bought a ball, did as they said and still contracted influenza.
Held: plaintif was entitled to recovered the sum as they were bound to pay. Advert was a unilateral offer with clear prescribed act, performance of which consituted evidence. Defendants intention was clear by the £1000 deposit and certainty of the language.

Question 10

Advert constituiting unilateral contract

Answer 10

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

Question 11

Fisher v Bell [1961] 1 QB 394

Answer 11

Price-marked goods in a shop window are not an offer for sale but an invitation to treat

Question 12

Price-marked goods in a shop window are not an offer for sale but an invitation to treat

Answer 12

Fisher v Ball [1961] 1 QB 394

Question 13

Spencer v Harding (1870) LR 5 CP 591

Answer 13

Inviting parties to tender is considered an invitation to treat

Question 14

Inviting parties to tender considered invitaton to treat

Answer 14

Spencr v Harding (1870) LR 5 CP 591

Question 15

Harvela Investments Ltd v Royal Trust Co. of Canada Ltd [1985] Ch 103

Answer 15

Exception to general rule that invitation to tender is invitation to treat is when tender expressly contains an undertaking to accept highest or lowest bidder

Question 16

Exception to general rule that invitation to tender is invitation to treat is when tender expressly contains an undertaking to accept highest or lowest bidder

Answer 16

Harvela Investments Ltd v Royal Trust Co. of Canada [1985] Ch 103

Question 17

When tender is unilateral contract

Answer 17

Harvela Investments Ltd V Royal Trust Co. of Canada [1985] Ch 103

Question 18

Blackpool & Fylde Aero Clouc Ltd v Blackpool Borough Council [1990] 1 WLR 1195 - importance

Answer 18

Held that invitation to tender could give rise to binding contract to consider tenders where:
- tenders been solicited from specified parties known to the requesting party
- there was an absolute deadline for submission
- party requesting tender had lain down and absolute and non-negotiable conditions for submission.
Bingham LJ held: contractual duty to consider those tenders which had complied with conditions for submission

Question 19

When tender could give rise to binding contract to consider submissions

Answer 19

Blackpool & Fylde Aero Club v Blackpool Borough Council [1990] 1 WLR 1195

Question 20

Payne v Cave [1789] 3 Durn & E 148

Answer 20

Auctioneer’s request for bids is an invitation to treat. Bidder makes an offer which the auctioneer is free to accept / reject.
Marks acceptance by the fall of his hammer.
The offerer make revoked his offer at any time before acceptance

Question 21

Auctioneer’s request for bids is an invitation to treat.

Answer 21

Payne v Cave [1789] 3 Durn & E 148

Question 22

Warlow v Harrison [1859] 1 E&E 309

Answer 22

Obiter dicta:
if sale of an auction item listed without reserve - auctioneer may be sued for breach of contract if do not sell to highest bona fide bidder.
When without a reserve - two contracts;
1) bilateral - usual for an auction and determines who is entitled to the goods
2) unilateral - based on the promise that the auction will be without a reserve.

Question 23

Auction without a reserve = 2 contracts

Answer 23

obiter dicta:

Warlow v Harrison [1859] 1 E&E 309

Question 24

Barry v Davies [2000] 1 WLR 1962

Answer 24

Approved the approached in Warlow v Harrison [1759] 1 E&E 309 that an auction without a reserve is two contracts

Question 25

Approved the approach in Warlow v Harrison

Answer 25

Barry v Davies [2000] 1 WLR 1962

Question 26

Hyde v Wrench [1840] 3 Beav 334

Answer 26

Where an offeree makes a counter offer the original offer is deemed to have been rejected and is therefore no longer valid. Acceptance must be unqualified and correspond exactly with the terms of the offer

Question 27

Counter offer deems original offer rejected and invale

Answer 27

Hyde v Wrench [1840] 3 Beav 334

Question 28

Stevenson, Jacques & Co v McLean [1880] 5 QBD 346 - case

Answer 28

Defendant offered to sell 3000 tons of iron at 40s net cash per tin, open til Monday. Claimant responds: Please write whether you would accept 40 for delivery over two months, or if not the longest limit you would give. Having received no reply, accepted the original offer. Court held that claimant's response was not a counter offer - rather an enquiry which did not serve to reject the original offer

Question 29

An enquiry does not serve to reject the original offer

Answer 29

Stevenson, Jacques & C v McLean [1880] 5 QBD 346

Question 30

Financings Ltd v Stimson [1962] 1 WLR 1184

Answer 30

Lapse of an offer: subject to fulfilment of a condition. Customer offered to take car under a hire purchase agreement (offer being made to a finance company). Car stolen from dealers & damaged. Dispute as to whether customer's offer subject to an implied term that the car remained in same condition. Held: customer's offer subject to implied term

Question 31

Offer makes offer subject to fufilment of a condition

Answer 31

Financings Ltd. v Stimson [1962] 1 WLR 1184

Question 32

An offerer may revoke his offer at any time before acceptance

Answer 32

Payne v Cave [1789] 3 Durn & E 148

Question 33

Dickinson v Dodds [1876] 2 Ch D 463

Answer 33

The offeror is not bound to keep an offer open for a set amount of time even if stipulated. Unless, the offeree has given something of value in return. Then, there is a separate binding contract known as an option & revocation within the period will be in breach of that contract Revocation is effective even if communication by a third party

Question 34

If offeree gives something of value in return for offer being held open for stipulated amount of time

Answer 34

Then there is a separate binding contract known as an option & revocation Dickinson v Dodds [1876] 2 Ch D 463

Question 35

Bryne v Van Tienhoven [1880] 5 CPD 344

Answer 35

When revocation is communicated by post it only takes effect once it is received by the offeree

Question 36

When revocation is communicated by post it only takes effect once it is received by the offeree

Answer 36

Bryne v Van Tienhoven [1880] 5 CPD 344

Question 37

Means of communication a revocation do not matter - will be effective even if via a third party

Answer 37

Dickinson v Dodds [1876] 2 Ch D 463

Question 38

Great Northern Railway Company v Witham [1873]

Answer 38

It remains possible to revoke a unilateral offer at any time before the completion of the required act

Question 39

Remains possible to revoke a unilateral offer at any time before the completion of the required act

Answer 39

Great Northern Railway Company v Witham [1873]

Question 40

Errington v Errington & Woods [1952] 1 KB 290

Answer 40

Father agreed to give son and daughter-in-law his house if they paid off the mortgage. The couple had made several payments towards the paying off of the loan when the father revoked the offer. COurt held that the promise could not be revoked after the couple had started to pay the instalments as long as they contieues to be paid

Question 41

Cannot revoke an offer even if the act is only partly completed

Answer 41

Errington v Errington & Woods [1952] 1 KB 290 | - House mortgage

Question 42

Daulia v Four Mill Bank Nominees Ltd [1978] Ch 231

Answer 42

Lord Justice Goff ' the true view of a unilateral contract must.. be that the offeror is entitled to require full performance of the condition which he has imposed... subject to one important qualification, which stems from the fact that there must be an implied obligation on the part of the offeror not to prevent the condition becoming satisfied which obligation it seems to me must arise as soon as the offeree starts to perform

Question 43

Offeror is entitled to require full performance of a condition as long as the offeror does not prevent condition being satisfied

Answer 43

Daulia v Four Mill Bank Nominees ltd. [1978] Ch 231

Question 44

Offer can be made to the whole world and those embarking have no requirement to communicate their intention to accept the offer

Answer 44

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

Question 45

Shuey v United States [1875] 23 L ed 697

Answer 45

US (no english authority) When the offeror has no idea of who may be responding to the offer, revocation will be effective if reasonable steps have been taken to bring it to the attention of all those who may have read the offer

Question 46

If offer is made to the 'world' a valid acceptance may be made by any person with notice of the offer

Answer 46

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

Question 47

R v Clarke [1927] 40 CLR 227 - case

Answer 47

Reward offered for information leading to the arrest and conviction of the persons who committee the murders of two police offers. Clarke had seen this offer but only gave relevant info after he had been arrested for the crime and had forgotten the reward offer. Held: he had not acted on the faith of or reliance up on the offer.

Question 48

Act or promise constituting the acceptance must be given in the knowledge of the offer

Answer 48

R V Clarke [1927] 40 CLR 227 | Held: had not acted on the faith of or in reliance upon the offer

Question 49

Williams v Carwardine [1833] 5 C & P 566

Answer 49

If there's evidence of pre-requisite knowledge, it matters not that the act is performed for an entirely different motive which is quite unconnected with the terms of the offer

Question 50

Evidence of pre-requisite knowledge then doesn't matter if act if performed for a different motive

Answer 50

Williams v Carwadine [1833] 5 C & P 566

Question 51

Acceptance must be unqualified and correspond exactly with the terms of the offer

Answer 51

Hyde v Wrench [1870] 3 Beav 334

Question 52

Manchester Diocesan Council for Education v Commercial and General Investments [1970] 1 WLR 241

Answer 52

Buckley J explained that it's open to offeror to prescribe a mode of acceptance 'in terms insisting that only acceptance in that mode shall be binding'.

Question 53

If an offerer intends that he shall be bound only if his offer is acctped in some particular manner, it must be for him to make this clear

Answer 53

Buckley J: | Manchester Diocesan Council for Education v Commercial and General Investments [1970] 1 WLR 241

Question 54

Tinn v Hoffman [1873] 29 LT 271

Answer 54

Unless prescribed mode of acceptance is made mandatory, another mode of acceptance which is no less advantageous to the offerer will bind him

Question 55

Unless specified mode of acceptance is mandatory, other modes no less advantageous to offerer will be accepted

Answer 55

Tinn v Hoffman [1873] 29 LT 271

Question 56

Yates Building Co. Ltd v Pulleyn & Sons (York) Ltd [1975] 119 SJ 370 - significance

Answer 56

If method of acceptance is for the benefit of the offeree, the offeree can waive a stipulation and use an alternative mode if it doesn't not disadvantage the offere

Question 57

Yates Building Co. Ltd v Pulleyn & Sons (York) Ltd [1975] 119 Sj 370 - case

Answer 57

Acceptance was to be sent registered or recorded delivery. This was for the benefite of the offeree as provided proof of acceptnace. Offeree was therefore abvle to waive this requirement

Question 58

If mode of acceptance is chosen to benefite oferee, offerree can waive this benefit

Answer 58

Yates Building Co. Ltd v Pulleyn & Sons (York) Ltd [1975] 119 SJ 370

Question 59

Felthouse v Bindley [1862] 11 CB (NS) - case

Answer 59

F offered to buy his nephews horse for £30 15s. In the letter with the offer F wrote ' If i hear no more I consider him mine for £30 15s" Nephew didn't reply, sold the horse to someone else. F alleged there was a binding contract. Court help that the nephew had not communicated his intention to sell the horse to F and so no contract

Question 60

Felthouse v Bindley [1862] 11 CB (NS) - importance

Answer 60

Acceptance has to be communicated

Question 61

Acceptance has to be communicated

Answer 61

Felthouse v Bindley [1862] 11 CB (NS)

Question 62

Powell v Lee [1908] 99 LT 284 - case

Answer 62

P applied to a commitee of school managers for post of headmaster. Committee decided to appoint P but did not inform him. One member, without authorisation, informed P had been selected. Committee change of mind and selected a different person. P contended breach of contract. Held: No contract because committee had not communicated an acceptance.

Question 63

Purported acceptance, made with authority is not binding

Answer 63

Powell v Lee [1908] 99 LT 284 - case

Question 64

Adams v Lindsell [1818] 1 B & Ald 681

Answer 64

Laid down the postal rule. Further acceptance to the rule that acceptance has to be communicated to the offereor. Where post is deemed proper means of acceptance, the acceptance takes effect from the moment the letter is properly posted. This is when it is put into an official letter box or into the hands of an employee of the PO authorised to receive letters

Question 65

Postal rule - acceptance in effect once properly posted

Answer 65

Adams v Lindsell [1818] 1 B & Ald 681

Question 66

London and Northern Bank, ex p. Jones [1900] 1 Ch 220

Answer 66

Letter not properly posted by putting into the hands of a postman only authorised to deliver letters

Question 67

Letter not properly posted by putting into the hands of a postman only authorised to deliver letters

Answer 67

London and Northern Bank, ex p. Jones [1900] 1 Ch 220

Question 68

Household Fire and Carriage Accident Insurance Co. V Grant (1879) 4 Ex D 216 - relevance

Answer 68

Postal rule applies even where the acceptance is delayed or lost in the post.

Question 69

Household Fire and Carriage Accident Insurance Co. V Grant (1879) 4 Ex D 216 - case

Answer 69

G applied for shares of the plaintiff company. Company accepts via letter but it never arrived. Company into liquidation, liquidator on behalf of the company sued for the balance outstanding. G contented not bound to pay since he had not received a reply. Held: contract was made at the moment the letter was posted

Question 70

Contact made at the moment the letter was posted

Answer 70

Household Fire and Carriage Accident Insurance Co. V Grant (1879) 4 Ex D 216

Question 71

Henthorn v Fraser [1892] 2 Ch 27

Answer 71

Postal rule only applicable where reasonable for the offeree to use post. Held to be unreasonable to use the post when im[lied condition that prompt acceptance required

Question 72

unreasonable to use the post when implied condition that prompt acceptance required

Answer 72

Henthorn v Fraser [1892] 2 Ch 27

Question 73

Postal rule only applicable where reasonable for the offeree to use post.

Answer 73

Henthorn v Fraser [1892] 2 Ch 27

Question 74

Quenerduaine v Cole [1883] 32 WR 185

Answer 74

Fact that counter-offer was made by telegraph indicated implied condition that prompt acceptance was required. Purported acceptance by letter, which reached the counter-offer after the counter-offer had lapsed, was ineffective

Question 75

Counter-offer was made by telegraph indicated an implied condition that prompt acceptance was required

Answer 75

Quenerduaine v Cole [1883] 32 WR 185

Question 76

Holwell Securities v Hughes [1974] 1 WLR 155

Answer 76

Lawton LJ stated that postal rule will not apply where it would lead to 'a manifest inconvenience or absurdity'

Question 77

Postal rule does not apply when would lead to inconvenience or absurdity

Answer 77

Lawton LJ | Holwell Securities v Hughes [1974] 1 WLR 155

Question 78

Bryne v Van Tienhoven [1880] 5 CPD 344

Answer 78

Postal rule only applies to letters of acceptance not revocation

Question 79

Postal rule only applies to letters of acceptance not revocation

Answer 79

Bryne v Van Tienhoven [1880] 5 CPD 344 | Henthorn v Fraser [1892] 2 Ch 27

Question 80

Henthorn v Fraser [1892] 2 Ch 27

Answer 80

Postal rule only applies to letters of acceptance not revocation

Question 81

Henthorn v Fraser [1892] 2 Ch 27

Answer 81

Day 1: F makes offer and H recieves to seel certain giuse with the offer to remain open for 14 days. H recieves the offer in person. Day 2: F posts revocation Day 2 (later): H posts acceptance Day 3: H receives revocation Day 3 (later) F receuves acceptance Held: contract was made when H posted his letter of accepteptance

Question 82

Revocation not valid until received, acceptance valid once posted

Answer 82

Henthorn v Fraser [1892] 2 Ch 27

Question 83

Gertreide-Import Gesellschaft v Contimar [1953] 1 WLR 207

Answer 83

Postal rule does not apply if incorrectly addressed

Question 84

Postal rule does not apply if incorrectly addressed

Answer 84

Gertreide-Import Gesellschaft v Contimar [1953] 1 WLR 207

Question 85

Holwell Securities v Hughes [1974] 1 WLR 155

Answer 85

Postal rule does not apply if disaplied by the offereor

Question 86

Postal rule does not apply if disaplied by the offeror

Answer 86

Holwell Securities v Highes [1974] 1 WLR 155

Question 87

Holwell Securities v Hughes [1974] 1 WLR 155 - case

Answer 87

Plaintiffs granted option by defendant 'excersiable by notice inw riting' an any time within 6 months of the date herof. 6 months later plaintiff wrote to defendant giving notice to exercise the option but letter didn't arrive Hled: option had not been validly exercised because actual communication was required by the use of the phrase 'by notice....to'

Question 88

Dunmore v Alexander [1830] 9 Shaw 190

Answer 88

Postal rule suggests B cannot retract acceptance by telephone of an offer he made by post the day before

Question 89

Postal rule suggests B cannot retract acceptance by telephone of an offer he made by post the day before

Answer 89

Dunmore v Alexander [1830] 9 Shaw 190 | Wenkheim v Arndt (NZ) [ 1861]

Question 90

Entores v Miles Far East Corporation [1955] 2 QB 327 confirmed by

Answer 90

Brinkibon v Stahag Stahl [1983] 2 AC 34

Question 91

Brinkibon v Stahag Stahl [1983] 2 AC 34 confirms

Answer 91

Entores v Miles Far East Corporation [1955] 2 QB 327

Question 92

Brinkibon v Stahag Stahl [1983] 2 AC 34

Answer 92

General rule - when acceptance received by instantaneous mode of communication, acceptance takes place at moment acceptance received

Question 93

General rule - when acceptance received by instantaneous mode of communication, acceptance takes place at moment acceptance received

Answer 93

Brinkibon v Stahag Stahl [1983] 2 AC 34 confirms Entores v Miles Far East Corporation [1955] 2 QB 327

Question 94

Entores v Miles Far East Corporation [1955] 2 QB 327

Answer 94

General rule - when acceptance received by instantaneous mode of communication, acceptance takes place at moment acceptance received

Question 95

The Brimnes [1975] QB 929

Answer 95

concerns communication sent during office hours. CoA concluded that a telex had been sent during ordinary office hours on a Friday but not been seen until following Monday . It was effective when it was received

Question 96

Telex received in usual working hours - effective when received

Answer 96

The Brimnes [1975] QB 929

Question 97

Mondial Shipping and Chartering BV b Astarte Shipping Ltd [1995] CLC 1011

Answer 97

Telex sent outside ordinary hours. Telex sent 23:41 Friday by ship owners to charterers informing them of their intention to withdraw vessel for non-payment of hire. They had until Friday midnight to pay Deemed that the telex was sent out of office hours so only came into effect the following Monday at which point charterers in breach of their contract.

Question 98

Telex sent outside ordinary hours.

Answer 98

Mondial Shipping and Chartering BV b Astarte Shipping Ltd [1995] CLC 1011

Question 99

Thomas v BPE Solicitors [2010] All ER (D) 306

Answer 99

What is office hours will depend on the particular context of the communications. Blair J expressed view that the postal rule is inapplicable to email communication. Email acceptance only effective when recieved.

Question 100

What is office hours will depend on the particular context of the communications.

Answer 100

Thomas v BPE Solicitors [2010] All ER (D) 306