Contract - Offer & Acceptance Flashcards
What are the 2 requirements for a valid offer?
- Clear and Certain
- Display an intention to be bound
- If you sign the agreement and return it, i will return a copy signed by Company X -vs- may be prepared to sell
What are the required elements to form a contract?
- Offer
- Acceptance
- Consideration
- Intention to create legal relations (parties’ intention meet/match “ad idem”)
- Capacity
What are the different modes of intention to treat?
Advertisements,
Displays of goods,
Websites,
Auctions (the auctioneer is free to accept or reject incoming bids),
Invitations to tender (C requests workers to submit quotes to carry out work for fixed price).
Note: Auctions “without reserve” means that the highest bidder must win the auction and cannot be refused.
Note: Invitations to tender can amount to a unilateral offer, where for example, there is wording like “we will act the highest/lowest/cheapest tender/bid”.
What is the effect of the two following situations?
Scenario 1: Offer is made -> rejected -> counter-offer is made
Scenario 2: Offer is made -> rejected -> request for more information
Scenario 1: The original offer is extinguished / destroyed / invalid
Scenario 2: The original offer remains open
What are the requirements for a valid acceptance?
- It must be communicated,
- (Sometimes in a certain manner/mode, prescribed by offeror), and
- Be unqualified (i.e. exactly match the offer, with no extra conditions or requirements)
Explain the rules in a scenario where the offeror stipulates a certain mode/method of communicating acceptance:
1. if the method is for the benefit of the offeree
2. if the method is clearly mandatory / excludes all other methods
- The offeree can use any method to communicate acceptance
- The offeree’s acceptance is only valid if they use the required method
What is the postal rule, and what are its exceptions?
Rule: An acceptance via post is valid from the MOMENT IT IS POSTED (even if delayed).
Note: This only applies to acceptance, NOT rejections.
Exceptions:
1. It is not posted properly;
2. If using the post is manifestly absurd/inconvenient
3. It was not thought that post would be used
4. The letter is not address to the offer, or is misspelt.
5. The postal rule is ousted.
- When instant communication is used, what are the rules on acceptance?
- What if the acceptance was not received?
- What if the acceptance is sent outside of office hours?
- Rule: Instantaneous methods of communicating acceptance are valid WHEN RECEIVED by the offeror.
NOTE that revoking/removing an offer is ONLY valid when RECEIVED by the offeree (not when revoked by offeror). - WHEN THE ACCEPTANCE IS NOT RECEIVED:
- If the offeree (person sending the acceptance) is at fault, or no one is at fault: NO CONTRACT.
- If the offeror (person receiving the acceptance) is at fault: CONTRACT EXISTS. - The acceptance is deemed received from the next WORKING day.
- Note that the meaning of “office hours” depends on the context.
Explain the objective test when determining offer & acceptance.
What a reasonable person would say was the intention of the parties, having regard to all circumstances.
Advertisement are treated as “invitation to treat”, but there is an exception - what is it?
If the advertisement is drafted so as to amount to a UNILATERAL OFFER.
- see Carbolic Smoke Ball case where there was a clear intention to be legally bound and offered C £100 if they did a specific act.
How do we assess certainty when forming a contract?
All material terms must be certain and complete, which is judged objectively.
- Example: You can’t buy something on “hire-purchase terms” because there are many forms of hire-purchase.
- Example: The phrase “timber wood of fair specification” can be given a reasonable meaning, especially in light of the parties’ previous dealings (Hillas v Arcos)
The owner of a campervan sends an email to an interested buyer. Her email states, ‘I will sell my campervan to you for £15,000.’ The interested buyer responds, ‘I want to go ahead if your campervan has a full-service history.’
Which one of the following statements best describes the legal position?
The buyer’s request is a conditional offer or request for further information?
The interested buyer’s response is a request for further information. The campervan owner’s offer remains open for acceptance.
A request for further information does not terminate the offer (Stevenson Jacques v McLean [1880])
A valid acceptance must be UNCONDITIONAL (see Hyde v Wrench)
A counter offer must propose alternative terms for acceptance (Hyde v Wrench).
Can an offer be conditional?
What is the difference between a counter-offer vs request for information?
No - must be unconditional (Hyde v Wrench).
A counter offer must propose alternative terms for acceptance (Hyde v Wrench).
An auction without reserve - what sort of contract will this create?
Unilateral contract with the highest bidder.
(no “reserve”, or minimum bid/value).
