Cotract Law

Question 1

What is an offer

Answer 1

A proposal showing a willingness to contract on firm and definite terms

Question 2

Who is the offeror

Answer 2

The person who makes the offer

Question 3

Who is the offeree

Answer 3

The person to whom an offer is made

Question 4

What is an invitation to treat

Answer 4

An indication that one person is willing to negotiate a contract with another but that they are not yet willing to make a legal offer

Question 5

Describe an offer

Answer 5

Starting point for a contract

Once an offer is communicated offeree can chose to accept it or not

Offer must be definite in its terms

Difficulty is in deciding whether statement amounts to offer or whether it is just a statement

An acceptance of the offer forms the basis of a valid contract

Question 6

Describe an invitation to treat

Answer 6

Not an offer

Can not be accepted

Gibson v Manchester City council

Question 7

Is an advert an offer?

Answer 7

Generally no it is only an invitation to treat

Partridge v Crittenden

Unless exceptional circumstances where advert indicates clear ‘offer’ court may decide its an offer

Usually occurs when contract is bilateral

Question 8

What is a unilateral contract

Answer 8

The offeror makes a promise in exchange for an act by another party

E.g a reward for a missing pet found
No one is under obligation to find the missing pet but there is an offer to pay reward to finder

Unilateral contract only arises when the offeree completely performs the required act

CARLILL V CARBOLIC SMOKE BALL

Question 9

What is a bilateral contract

Answer 9

There is an exchange of mutual promises

E.g to buy a loaf of bread for £1 both parties have an obligation to provide

One provides bread one provides moneh

Question 10

Is goods in a shop window/shelf an offer?

Answer 10

Goods on shelf are invitations to treat

Contents of basket becomes offer when customer presents to checkout operator
R v Morris

Shop then accepts or declined customers offer through scanning

Goods in shop window are also an invite
Fisher v Bell

Question 11

Is an auction an offer

Answer 11

The bidder makes the offer that the auctioneer accepts by banging its hammer.
This means lots available at auctions are invitation to treats

British Car Auctions v Wright

Question 12

Is a request for information an offer

Answer 12

A request for information and reply to request is not an offer
This may be a general enquiry such as when an item displayed for sale does not have a price in it

Harvey v Facey

Question 13

Who can make an offer

Answer 13

Anyone
An individual, partnership, limited company.
An offer can also be made through a notice or a machine as in
Thornton v Sloe Lane parking

Question 14

To whom can an offer be made too

Answer 14

A named individual (Gibson v Manchester City council)

A group of people

The world at large (carlill v carbolic smokeball)

An offer can be targeted at particular individuals and may be conditional on another contract being made

Question 15

How is an offer communicated

Answer 15

An offer comes into existence when it’s communicated to the offeree.

Communication requires the offeree to know of the existence of the offer

Taylor v Laird

Question 16

How can an offer end

Answer 16

Revocation
Rejection
Lapse of time
Death
Acceptance

Question 17

Explain Revocation

Answer 17

An offer can be revoked at any time before acceptance.
The offeror must communicate the revocation to the offeree before the revocation can take effect.

Routledge v Grant

This can have implications where there is an offer to the whole world
Carbolic Smokeball v Carlill

In cases where conduct indicates acceptance, the offer cannot be revoked when the expected conduct continues

Errington v Errington

Question 18

Explain rejection

Answer 18

Once an offer is rejected - offer ends

If the offer is made to more than one person rejection by one person does not mean the other offerees can no longer accept

Rejection must be communicated to the offeror before it takes effect as in revocation

Offer can be rejected in two ways:
1) specifically responding to the offer by saying ‘no’
2) making a counter offer HYDE v WRENCH

sometimes enquiries during negotiations are treated as requests for info not counter offers
Stevenson v McLean

Question 19

Explain lapse of time

Answer 19

Offer can end by lapse of time

Fixed period for the duration of the offer is stated - as soon as that expires - no offer to accept

Problem arises when no time is set. In this situation time is a reasonable time which varies depending on nature of the offer

Ramsgate v Victoria Hotel

Question 20

Explain death (offer)

Answer 20

If the offered dies- offer ends and those dealing with his estate cannot accept on his behalf

Offeror dies - acceptance can still take place until the offeree learns of the death of the offeror

This is not the case where the offer is to perform some personal service

Question 21

What is acceptance

Answer 21

Acceptance must be positive and unqualified

Must be acceptance of the whole offer and all it’s terms

There is acceptance if the response to the offer is ‘yes’

Acceptance can be seen when you tap ‘I agree’ to accept contract

Question 22

How do you accept an offer

Answer 22

Acceptance can be in any form provided it’s definite and communicated by the offeror
Email, text, letter
Acceptance can not be silence
Felthouse v Bindley

Offeror can require specific method for acceptance which must be complied with for valid acceptance
Yates v Pulleyn

Requirements of signature can cause problems where negotiations are conducted electronically
Neocleous v Rees

Similar problems when contracts made on telephone as no evidence
Wells v Devani

Question 23

When does acceptance take place

Answer 23

As in Stevenson v McLean the actual time of revocation of an offer is critical
Equally with acceptance

General rule is acceptance takes place when the acceptance is communicated to the offeror
3 ways of accepting
1) acceptance by conduct
2) acceptance by use of the post
3) electronic methods of communication

Question 24

What is acceptance by conduct

Answer 24

Seen in Carlill v Carbolic Smokeball

Reflects what occurs quite often in business contracts - the job begins before the formal contract is agreed in all its detail with numerous offers and counter offer

Question 25

What is acceptance by use of the post

Answer 25

Postal rules deal with problem of when a contract came into existence and where the loss should fall if a letter is not delivered correctly - rule also adapted the idea thag once you posted a letter you can not get it back.

• rules only apply if post is the usual expected means of communication
• the letter must be properly addressed and stamped
• offeree must be able to prove letter was posted

Acceptance takes place moment letter was posted
Adams v Lindsell

Question 26

Electronic methods of communication (offer)

Answer 26

Law struggled to deal with issues communication modern technology

Electronic signatures
BRINKIBON LTD V STAHAG STAHL

Offer is accepted provided
- person signing document intends to authenticate document

• formalities relating to executing that document are satisfied such as clicking on an icon on website accepting terms and conditions

Question 27

Is silence acceptance of an offer

Answer 27

Law of formation will consider what parties intended to do.

Court will decide if there is a contract
FELTHOUSE V BINDLEY