CONTRACT LAW L4 - Offer & Acceptance - TERMINATION OF A CONTRACT Flashcards
What happens when an offer comes to an end? (2)
It loses its legal effect and becomes incapable of acceptance.
What are the three ways that an offer can come to an end? (3)
Rejection, lapse or revocation.
What happens once an offer has been rejected? (2)
It cannot then be accepted unless the offeror makes the same offer again. The rejection does not take place until it is actually communicated to the offeror.
What happens when an offeree makes a counter-offer? (2)
The original offer is deemed to be rejected and cannot be subsequently accepted.
What happens if an offeree responds seeking further clarification or to see if the offeror would consent to changing certain ancillary aspects of the offer? (2)
The offeree’s request may be construed as a request for further information and since there has been no counter-offer the original offer remains open for acceptance.
What did the case of STEVENSON, JACQUES & CO V MCLEAN 1880 demonstrate? (5)
The defendant offered to sell to the claimant 3,800 tons of iron at 40’s cash per ton open till monday.
Claimant responded please wire whether you would accept 40 for delivery over a two month or if not the longest limit you would give.
Having received no reply the claimant despatched a telegram accepting the original offer.
The court held that the claimant’s response was not a counter-offer bur rather an enquiry which did not serve to reject the offer.
A binding contract was made when the claimant sent the telegram accepting the offer.
When may an offer lapse? (2)
By passage of time or by death of one of the parties.
When will an offer lapse through passage of time? (2)
Where acceptance is not made within the period prescribed by the offeror and where no period is prescribed and acceptance is not made within a reasonable time.
When will an offer lapse due to death of one of the parties? (2)
If the offeror dies and the offeree is aware of the death then the offer will lapse but if they are not the offer will not lapse. If the offeree dies the offer will lapse so that the offer cannot be accepted after the offeree’s death by the offeree’s representatives.
When can an offeror revoke their offer? (1)
Anytime before acceptance.
What is the postal rule in terms of revocation? (1)
When revocation is communicated by post it takes effect from the moment the offeree receives it and not from posting.
Can a third party communicate revocation on behalf of the offeror? (2)
Yes as long as clear intention has been shown and revocation has reached the offeree.
When is acceptance received in terms of unilateral contracts? (2)
As soon as the complete performance of the act required by the terms of the offer and it is possible to revoke the offer any time prior to the completion of the required act.
What does the case of ERNINGTON V ERNINGTON WOOD 1952 demonstrate? (3)
A father agreed to give his house to his son and daughter-in-law if they paid off the mortgage on the house.
The act required was paying off a building society mortgage loan and the couple had made several payments when the father wished to revoke the offer.
The court held that the promise could not be revoked after the couple had started to pay the instalments as long as they continued to be paid.
