Contract Law - 1.1 - Intro to Contracts Flashcards

Question

When is a tender not an invitiation to treat?

Answer 1

When the invitation to tender expressly contains an undertaking to accept the highest or the lowest bid. This is a Unilateral Contract **Harvela Investments Ltd v Royal Trust Co. of Canada (CI) Ltd [1985] Ch 103)**

Answer 2

**LJ Bingham** Invitation to tender can give rise to binding contractual obligations to **consider tenders** when: 1) tenders were solicited from specific known parties 2) no absolute deadline for submission 3)party requesting tenders had laid down absolute and non-negotiable conditions for submission

Answer 3

Auctioneer’s request for bids is an invitation to treat. Acceptance of the bidder's offer is indicated by the fall of the hammer. (Payne v Cave (1789) 3 Durn & E 148).

Answer 4

a sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner; and until the announcement is made any bidder may retract his bid

Answer 5

Bilateral contract: usual bid acceptance or rejection Unilateral contract: promise to the highest *bona fide* bid

Answer 6

- Compensation by damages - Not entitled to the goods, as this is dictated by the **bilateral contract for sale** Approved by CA in **Barry v Davies [2000] 1 WLR 1962.**

Answer 7

If the sale of the item in question is expressed to be ‘without reserve’ the auctioneer may be sued for breach of contract if they refuse to sell to the highest bona fide bidder.

Answer 8

- Is not an offer - Is the first step in negotiations - Cannot be accepted as a binding contract - Advertisements are invitations to treat, unless they relate to unilateral offers

Answer 9

An offer can come to an end by: rejection, lapse or revocation. Offer loses its legal effect and becomes **incapable of acceptance.

Answer 10

An offer is terminated by rejection. A rejection does not take effect until it is actually communicated to the offeror as only then will the offeror know that they are free from the offer.

Answer 11

Where an offeree makes a counter-offer, the original offer is deemed to have been rejected and cannot be subsequently accepted **(Hyde v Wrench (1840) 3 Beav 334).**

Answer 12

A contract did not exist because the counter-offer operated as a rejection of the original offer. There was therefore no offer to accept.

Answer 13

Last shot fired wins

Answer 14

RFI = - an offeree responds seeking clarification of the extent and terms of the offer, - or to ascertain if the offeror would consent to changing ancillary aspects of the offer **Not a counter offer** **Stevenson, Jacques & Co. v McLean (1880) 5 QBD 346**

Answer 15

No specific wording to indicate that it was a counter offer or rejection. This was in contrast to Hyde v Wrench. This meant that the offer made by the defendant was still valid and the second telegram by the complaint formed a binding contract.

Answer 16

An offer may lapse and thus become incapable of acceptance: (a) By passage of time; (b) By the death of one of the parties.

Answer 17

An offer will lapse through passage of time in the following circumstances (a) Where acceptance is not made within the period prescribed by the offeror; (b) Where no period is prescribed and acceptance is not made within a reasonable time. What is reasonable will depend on the circumstances of the case.

Answer 18

- if the offeree knows that the offeror has died, the offer will lapse; - if the offeree is unaware of the offeror’s death, it probably will not. - death of the offeree will cause the offer to lapse and so that the offer cannot be accepted after the offeree’s death by the offeree’s representatives.

Answer 19

The offeror may withdraw (ie revoke) their offer at any time before acceptance (Payne v Cave(1789) 3 Durn & E 148). An offer cannot be revoked after acceptance.

Answer 20

Defendant made the highest bid for the plaintiff’s goods at an auction sale, but he withdrew his bid before the fall of the auctioneer’s hammer. It was held that the defendant was not bound to purchase the goods. His bid amounted to an offer which he was entitled to withdraw at any time before the auctioneer signified acceptance by knocking down the hammer. Note: The common law rule laid down in this case has now been codified in s57(2) Sale of Goods Act 1979.

Answer 21

Revocation of an offer is effective only upon actual notice of it reaching the offeree. **not from the time of posting** (Byrne v Van Tienhoven (1880) 5 CPD 344).

Answer 22

withdrawal of the offer was ineffective as a contract had been constructed between the parties on October 11 when the plaintiffs accepted the offer in the letter dated October 1. On this basis, it was held that an offer for the sale of goods cannot be withdrawn by simply posting a secondary letter which does not arrive until after the first letter had been responded to and accepted

Answer 23

Provided the offeror has shown, by words or conduct, a clear intention to revoke their offer and notice has reached the offeree, the revocation is effective. Even by a third party Dickinson v Dodds (1876) 2 Ch D 463).

Answer 24

The court stated that a communication by a friend or other party that an offer had been withdrawn was valid and would be treated as if it came from the person themselves.

Answer 25

It remains possible to revoke the offer at any time prior to the completion of the required act (Great Northern Railway Company v Witham (1873)). There is an exception

Answer 26

The Courts deem the contract to be created at the time the tender is accepted. Performance of the contract will not take place until the tender is called upon to perform and supply the goods or services. The tenderer however, may be allowed to give reasonable notice to withdraw their set prices, and thus withdraw their offer

Answer 27

where the offeree has partly performed the obligation and is willing and able to complete. Errington v Errington & Woods [1952] 1 KB 290

Answer 28

In obiter, the father made an offer of unilateral contract could not be revoked after the couple started paying off the mortgage

Answer 29

revocation will be effective if the offeror takes **reasonable steps** to bring the revocation to the attention of all those who may have read the offer. eg Carlill v Carbolic Smoke Ball Co

Answer 30

- Acceptance must be in response to the offer - Acceptance must be unqualified - May be necessary to follow a prescribed mode of acceptance - Acceptance must be communicated.

Answer 31

Only the party to whom an offer is made (the offerees) can accept the offer. Unless the offer is made to the world at large

Answer 32

Acceptance must be unqualified and correspond exactly with the terms of the offer. This is sometimes called the **"mirror image rule"**. Hyde v Wench (1840) Courts will examine correspondence to see if parties have expressly or implied assented to all terms. **Assent qualified in any way does not take effect as acceptance**.

Answer 33

May be communicated in any manner. Unless the offeror has prescribed a manner - then only that will suffice.

Answer 34

1970 Buckley J Open to the offeror to prescribe a mode of acceptance "in terms that insisting that only acceptance in that mode shall be binding".

Answer 35

1873 Unless the prescribed mode of acceptance is made mandatory, another mode of acceptance which is no less advantageous will bind them

Answer 36

General rule is that acceptance must be communicated to the offeror. Acceptance occurs the moment it is communicated.

Answer 37

The offeror may not stipulate that silence in the face of an offer amounts to acceptance.

Answer 38

It is possible if made with authority form the offerees. No contract will arise if the communication is made by way of 3rd party authority to the offeree.

Answer 39

An arbitary rule - places burden on the offeror. - Applies even if the letter is delayed - Does not apply if it was not contemplated that post would be used - Does not apply to letters revoking offers

Answer 40

**Adams v Lindsell 1818** Laid down the postal rule An exception to the rule that acceptance must be communicated to the offeror. Held that where post is deemed to be proper, acceptance takes place from the moment it is properly posted (letter box/official)

Answer 41

Household Fire and Carriage Accident Insurance Co v Grant 1879

Answer 42

**Henthorn v Fraser 1892** Only applies if reasonable in all circumstances to have used post.

Answer 43

Byrne v Van Tienhoven 1880

Answer 44

Y - if acceptance is delayed by post N - not contemplated that post would be used N - revocation of offers N- Letters incorrectly addressed N - Disapplied by the offeror

Answer 45

Offeror can address the imbalance of the postal rule ie they can **oust** the posta; rule **Holwell Securities v Hughes 1974**

Answer 46

Courts held that when an offer stipulated "notice in writing" - it is implied that acceptance is on receipt, ousting the postal rule.

Answer 47

Occurs on receipt of the email server. If acceptance is sent and not received due to an error by offeree or an unknow error - acceptance does not apply. If acceptance is not received due to fault of offeror it is deemed to be accepted.

Answer 48

1955 Acceptance on receipt Denning LJ - person sending message ought to know whether message received.

Answer 49

**Thomas v BPE Solicitors** Blair J Postal rule is not effective when sent, but when received by email server

Answer 50

**The Brimnes 1975** If sent in ordinary working hours it is effective of receipt. Office hours will depend on particular context of communications

Answer 51

**Mondial Shipping and Chartering BC v Astarte Shipping Ltd [1995]** Message sent at 23:41 on Friday was held that not received until Mondau 5th December

Answer 52

Communication of acceptance is waived in unilateral contracts Eg Carllil and Carbolic Smoke Ball An act may be enough for acceptance

Answer 53

- Only offeree can accept - Must be unqualified and mirror acceptance ie same terms - if a mode of acceptance is prescribed, unless clearly mandatory then an alternative mode can be used if not disadvantageous to offeror - Acceptance from communication; except Postal Rule - Silence does not constitute acceptance even if offeror indicates it will. - Third party can communicate acceptance if authorised.

Answer 54

- if a mode of acceptance is prescribed, unless clearly mandatory then an alternative mode can be used if not disadvantageous to offeror

Answer 55

A binding contract requires all **material terms** to be certain and complete. Only and agreement which is sufficiently certain can be enforced by a court

Answer 56

Objective Test Have the parties agreed all the terms they considered to be a precondition to creating legal relations. If incomplete/uncertain - may not be enforceable **RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Company KG**

Answer 57

Where a contract is negotiated “subject to contract” and work begins before the final contract is executed, it depends on the circumstances whether the parties had waived the subject to contract term. In the instance case, the unequivocal conduct of the parties led to the conclusion that they had made a binding agreement to waive the “subject to contract” provision.

Answer 58

1941 An agreement on "hire purchase terms" was too uncertain to be enforced. Court considered there were too many different terms this agreement was to vague to be an enforceable contract. Courts will not enforce an agreement if it is too vague, reflecting the intentions of the parties.

Answer 59

1932 Agreement to buy "timber of a fair specification" was enforceable. Court considered the words could be given reasonable meaning (in light of the parties previous dealings) and the agreement was binding.

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Contract Law - 1.1 - Intro to Contracts Flashcards

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