Contract - Topic 1 - Agreement Flashcards
Define “offer”
An expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed (Treitel, The Law of Contract - confirmed in Allied Marine Transport v Vale do Rio Doce Navegacco SA)
Distinguish “offer” from “invitation to treat”
Invitation to treat made without intention to be bound by specific terms.
Offer or i2t?
Self-service display in a shop i.e. products on shelves
Invitation to treat - Pharmaceutical society of GB v Boots cash chemists (unsupervised drug purchasing, not held as display as not an offer)
Offer or i2t?
Goods on display
Invitation to treat - Fisher v Bell (flick knife)
General tender
Invitation to tender - Blackpool & Fylde Aero Club ltd v Blackpool BC (tenders submitted must be considered)
Tender with specified terms e.g. specified to the highest bidder
Offer for unilateral contract - Harvela Investments (bid plus 1)
Offer or i2t?
Advertisements
Invitation to treat - Partridge v Crittendden (birds)
Offer or i2t?
Advertisements - exceptions
Clear and certain criteria, offered by manufacturers and limitless supply of goods - Grainger v Gough (detail required in advert)
Offering reward - Williams v Carwardine
Unilateral contract - Carlill v carbolic smoke ball co.
Rules for Auctions
With reserve price - Payne v Cave, contract between seller and bidder once the auctioneer completes the sale I.e. fall of the hammer.
Without reserve price - Barry v Davies (machinery), unilateral contact to accept highest bid, otherwise bidder can sue for damages.
Three elements of a contract
Agreement (offer & acceptance)
Intention to create legal relations
Consideration
Define acceptance
An unconditional expression of assent to the terms of an offer.
a) mirror image of the offer - Hyde v Wrench (negotiating farmers)
b) Communicated by the offeree in response to the offer - Bulton v Jones
Acceptance must be communicated by…
Offeree - Entores v Miles Far East Co. ( instantaneous communication & the postal rule)
or
Authorised agent - Powell v Lee ( Headmaster job application decision reversal)
Acceptance or counter offer? - general rule & qualification
General rule: a new provision makes a counter offer, imply rejection of original offer - Hyde v Wrench (negotiating farmers)
Qualification: Questions about an offer do not reject it, offer may still be accepted - Stevenson Jacques & Co. v McLean (telegram discussion)
Battle if the forms - general rule
General rule: “Last shot wins” - Butler Machine Tool v Ex-Cell-O (exchange of incompatible terms)
Postal rule - general rule
Letter if acceptance becomes binding when posted - Adams v Lindsell
Postal rule - conditions
The following must be satisfied:
- it was reasonable to use post - Henthorn v Fraser
- it was properly posted - Re London and. Northern bank. ex p Jones
- the offeror did not exclude the postal rule impliedly/expressly - Howell v Hughes
If all the above are satisfied then offeror cannot reject offer once acceptance posted - Byrne v Van Tienhoven, even if letter lost or destroyed in post - Household fire insurance v Grant
Postal rule - wrong address
If offeree posted acceptance to the wrong address, acceptance only valid once received - Getreide-Import Geselschaft v Contimar
Instantaneous communication
Acceptance occurs when communication is received - Entores v Miles FE Co
If offeror doesn’t receive and offeree is aware, they need to resend
If offeror doesn’t receive and offeree isn’t aware, and offeror doesn’t ask again, then offeror responsible for acceptance.
Office hours
If received during office hours, but offeror doesn’t read, still accepted (The Brimnes)
If received outside of office hours, counted as accepted at start of next office hours - Mondial Shipping BV v Astarte Shipping)
“Office hours” can vary by situation (Thomas v BPE Solicitors)
Revoking an offer - general
offer can be revoked at any time even if offeror has agreed to leave it open - Routledge v Grant, unless offeree has given consideration to keep it open - Mountford v Scot
Revoking a unilateral offer
Revocation not possible once the act of acceptance has begun - Errington v Errington & Woods
communicated through the same channel as offer provided it has the same prominence - Shuey v US (US law)
How must an offer be revoked?
Revocation must be communicated:
by offeror - Byrne v Van Tienhoven
by reliable third party - Dickenson v Dodds
unless offer was received but not read and it could be reasonably assumed that staff were at work - The Brimnes
or
Made to public at large - in which case revocation made through same channel - Shuey v US
Offeror preventing performance…
There is an implied obligation for the offeror not to prevent offeree performance - Daulia v Flour Mill Bank
