Contract Law- Offer & Acceptance

Question 1

What is a contract

Answer 1

A contract is a voluntary agreement between two individuals that the law will enforce

Question 2

Definition of Offer ?

Answer 2

An offer is a statement of terms by which one is prepared to be legally bound

Question 3

What is an offer ?

Answer 3

Offer must be clear, precise and made to an identifiable person

Question 4

Who can an offer be made by ?

Answer 4

Person
Business
Machine (Case of Thornton V Shoe Lane parking)

Question 5

What is an invitation to treat ?

Answer 5

It is the willingness to enter negotiations

Question 6

Self Service displays are always I2T, give a case to back this

Answer 6

Pharmaceutical Society of GB v Boots
Held : Goods in self-service always I2T because customers make the offer and decision would be made by the shop-keeper as to whether it is appropriate to sell to that person

POL: This is to protect shop-keepers/ businesses from breaching contracts

Chapelton v Barry
Held: Pile of deckchairs available for hire on the beach was an offer customers could accept

Question 7

Goods displayed in a shop window are always I2T, give a case to back this

Answer 7

Fisher V Bell
It was illegal to offer for sale a flick knife, shop-keeper wasn’t guilty as the display was only an I2T, it allowed a culpable D escape liability

Question 8

Machines can make an offer, give a case

Answer 8

Thornton v Shoe Lane

Ticket from automatic machine is an offer, customer accepts by putting money in the machine

Question 9

Request for Information is an I2T and not an offer, give a case to back this

Answer 9

Harvey v Facey

Question 10

Wording in letters can be I2T and not actual offers, give a case to back this

Answer 10

Gibson v Manchester City Council
Held: An offer is not an offer unless it is communicated in definitive terms. The word ‘may’ used in this letter suggested it was an I2T and not an offer.

Question 11

Adverts in a newspaper are always I2T because they are made to the whole world, give a case

Answer 11

Partridge V Crittenden
It was on offence to offer birds for sale, he was charged however it was squashed as adverts are I2T and not classed as offers.

Question 12

Reward can be classed as offer as soon as a person has performed, give a case to back this

Answer 12

Carlill v Carbolic Smoke Ball Co
Company offered a £100 reward to anyone who used smoke ball correctly and still caught influenza, when Mrs Carlill tried claiming this they said the offer was a ‘marketing puff’

Question 13

Auctions and things advertised in an auction catalogue are I2T, explain this and back with a case

Answer 13

Payne V Cave
The auction catalogue and the call for bids by the auctioneer are all I2T, the bid is the offer and the fall of the hammer is acceptance

Question 14

What are the rules of communication ?

Answer 14

An offer cannot be accepted unless the person seeking to accept it knows it exists

Question 15

How can an offer be ended ?

Answer 15

Lapse of Time
Revocation
Rejection
Counter-Offer

Question 16

What is lapse of time and give a case

Answer 16

If an offer has an expiry date, it will cease to exist after that time
Ramsgate Victoria Hotel V Montefiore
Held: Offer was no longer open after 6 months as it lapses after a period of reasonable time

Question 17

What is revocation and give cases to support this

Answer 17

A person can withdraw or revoke an offer at any point but must give notification to the other party receiving the offer.

Routledge v Grant
Grant made offer to buy Routledge’s house, offer would remain for 6 weeks, he revoked after 3 and Routledge tried accepting 2 weeks later.

Dickinson V Dodds
Held that revocation of an offer can be made by a reliable 3rd party if they inform the person that the offer has ended

Question 18

Rejection ? and give a case

Answer 18

Person doesn’t get 2nd chance once offer rejected it can’t be accepted, failure to reply doesn’t mean offer has been rejected

Case of Stevenson

Question 19

Counter-offer ? Case?

Answer 19

A counter-offer rejects the original offer and creates a new one

Hyde V Wrench
This case established that original offer ends once counter-offer made so original offer cannot be accepted

Question 20

What is acceptance

Answer 20

An agreement to an offer made

Question 21

What ways can acceptance be communicated, support with cases

Answer 21

Verbally - this is established as long as acceptance is clear and heard.
Case of Entores V Miles Far East

Through conduct- Case of Carlill V Carbolic Smoke Ball Co
By using the smoke ball Mrs Carlill’s conduct was acceptance of the offer thus she was owed the £100 they promised

Question 22

What cannot be acceptance ? case ?

Answer 22

Silence cannot be acceptance, some form of action is necessary
Felthouse V Bindley
Held that a positive act is required, one cannot presume the offer is accepted without communication from the other party

Question 23

What must acceptance be

Answer 23

Acceptance must be unconditional and a mirror image of the original offer
If the offer includes a mandatory instruction on how acceptance should be communicated, there will be no acceptance if the party uses a different method

Question 24

Offeree has to be aware of the existence of the offer, give a case to support this

Answer 24

Ireland Revenue Commissioners V Fry

Question 25

Communication of the acceptance must be made by an authorised person, what case supports this

Answer 25

Powell V Lee
It was held that there was no contract, the ruling established that acceptance of an offer must communicated to offeror by offeree himself or authorised agent

Question 26

What is the postal rule ? Support with a case

Answer 26

Acceptance takes place at the moment of posting

Case of Adams v Lindsell
It was held that there was a contract in existence even though the letter had not yet been received by the D

Question 27

What are the rules of the postal rule ? Give cases where necessary

Answer 27

1 - If the letter is lost and never delivered this does not affect the validity of the acceptance

Case of Household Fire Insurance V Grant
Made an offer to accept shares, he posted acceptance it was never received, company went bankrupt, he was held liable even though he was unaware he became a shareholder

Question 28

Does postal rule apply to Instant form of communications

Answer 28

No, cases supporting this are:
Telex machines - In Entores the court held acceptance by telex machine was made when telex was received
(Electronic Commerce Regulations 2002 states that online acceptance occurs when the website acknowledges that they have received acceptance

Emails/texts/calls - postal rule had to develop to keep up with technology.
If acceptance is communicated out-of-hours, it is only effectively communicated when the office opens the next days as in the case of Brinkibon Ltd