Contract - Offer and Acceptance Flashcards
Contract
A contract is a legally binding agreement between two or more parties which is essentially commercial in nature. Not all agreements are considered legally binding. For an agreement to be considered legally binding, the parties must intend legal consequences to follow their actions.
Offer
An offer may be defined as a clear statement of the terms on which the offeror is prepared to do business with the offeree. An offer may be bilateral (i.e. a promise made in return for a promise) or unilateral (i.e. a promise made in return for the completion of a specified act).
Acceptance
This is an agreement to be bound by all the terms of the offer.
Gunthing v Lynn
Have clearly stated terms (it must be definite)
Carlill v Carbolic Smoke Ball
Co. Ltd.
The offeror must have an intention to do business
Hyde v Wrench
Be exactly on the same terms of the offer and must not be varied otherwise it would be considered a counter offer
Powell v Lee
Be communicated in the manner implied or expressed in the offer and this may be
verbal, in writing or by conduct
Postal Rule
Adams v Lindsell & Household Insurance v Grant
Notice in Writing
Holwell Securities v Hughes
Elements of an Offer
- Have clearly stated terms (it must be definite) Gunthing v Lynn
- The offeror must have an intention to do business Carlill v Carbolic Smoke Ball
Co. Ltd. - The offer must be communicated
Elements of an Acceptance
1. Be exactly on the same terms of the offer and must not be varied otherwise it would be considered a counter offer – Hyde v Wrench
2. Be certain and definite
3. Be communicated in the manner implied or expressed in the offer and this may be
verbal, in writing or by conduct –Powell v Lee, Brogden v Metropolitan
Railway, Entores v Miles Far East Corp.
Termination of contract - By refusal and counter offer
Hyde v Wrench
Termination of contract - By refusal and counter offer
Stevenson v McLean
Termination of contract - By lapse of time
Ramsgate Hotel v Montefiore
Termination of contract - By revocation
Dickinson v Dodds
Routledge v Grant c.f. Dickenson v. Dodds
The effect of a promise to keep the offer open for a certain time or to give someone the right of first refusal- This will not be legally binding unless the offeree gave some payment to the offeror in return for the promise
Brogden v Metropolitan
Railway, Entores v Miles Far East Corp.
Alt. for: Be communicated in the manner implied or expressed in the offer and this may be
verbal, in writing or by conduct
Silence does not mean consent
Felthouse v Bindley
Blackpool v Blackpool Council
Invitation to submit tenders are generally considered invitation to treat, although it may also be considered an offer by the advertisers to consider any offer submitted to them.
Elements of Consideration
- Must not be passed
- Must move form promisee to promisor
- Must be suffiraient but need not be adequate
- Must not be illegal or vague
Consideration (definition)
Benefit to one party or a detriment to the other parts (Currie v Misa)
Or
Price one party pays for the act or promise of the other party (Dunlop v Selfridge)
