Contract - Topic 1 - Agreement

Question 1

Define “offer”

Answer 1

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)

Question 2

Distinguish “offer” from “invitation to treat”

Answer 2

Invitation to treat made without intention to be bound by specific terms.

Question 3

Offer or i2t?

Self-service display in a shop i.e. products on shelves

Answer 3

Invitation to treat - Pharmaceutical society of GB v Boots cash chemists (unsupervised drug purchasing, not held as display as not an offer)

Question 4

Offer or i2t?

Goods on display

Answer 4

Invitation to treat - Fisher v Bell (flick knife)

Question 5

General tender

Answer 5

Invitation to tender - Blackpool & Fylde Aero Club ltd v Blackpool BC (tenders submitted must be considered)

Question 6

Tender with specified terms e.g. specified to the highest bidder

Answer 6

Offer for unilateral contract - Harvela Investments (bid plus 1)

Question 7

Offer or i2t?

Advertisements

Answer 7

Invitation to treat - Partridge v Crittendden (birds)

Question 8

Offer or i2t?

Advertisements - exceptions

Answer 8

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.

Question 9

Rules for Auctions

Answer 9

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.

Question 10

Three elements of a contract

Answer 10

Agreement (offer & acceptance)

Intention to create legal relations

Consideration

Question 11

Define acceptance

Answer 11

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

Question 12

Acceptance must be communicated by…

Answer 12

Offeree - Entores v Miles Far East Co. ( instantaneous communication & the postal rule)
or
Authorised agent - Powell v Lee ( Headmaster job application decision reversal)

Question 13

Acceptance or counter offer? - general rule & qualification

Answer 13

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)

Question 14

Battle if the forms - general rule

Answer 14

General rule: “Last shot wins” - Butler Machine Tool v Ex-Cell-O (exchange of incompatible terms)

Question 15

Postal rule - general rule

Answer 15

Letter if acceptance becomes binding when posted - Adams v Lindsell

Question 16

Postal rule - conditions

Answer 16

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

Question 17

Postal rule - wrong address

Answer 17

If offeree posted acceptance to the wrong address, acceptance only valid once received - Getreide-Import Geselschaft v Contimar

Question 18

Instantaneous communication

Answer 18

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.

Question 19

Office hours

Answer 19

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)

Question 20

Revoking an offer - general

Answer 20

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

Question 21

Revoking a unilateral offer

Answer 21

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)

Question 22

How must an offer be revoked?

Answer 22

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

Question 23

Offeror preventing performance…

Answer 23

There is an implied obligation for the offeror not to prevent offeree performance - Daulia v Flour Mill Bank