Element 1 : Agreement (Offer and Acceptance)

Question 1

What is required for an agreement to exist?

Answer 1

1. Offer
2. Acceptance of the offer

Question 2

What is an offer?

Answer 2

Promise, undertaking or commitment
Definite and certain terms
Communicated to offeree

Question 3

What is acceptance?

Answer 3

Communication of acceptance of offer
No termination by revocation, rejection or operation of law

Question 4

What is the objective standard for determining if there is an agreement (meeting of minds)?

Answer 4

Did words OR conduct manifest an intention to contract

Question 5

What expectation must an offer create in the mind of the offeree?

Answer 5

Reasonable expectation that the offeror is willing to contract on material terms of the offer

Question 6

What are the elements of an offer?

Answer 6

1. Promise/undertaking/commitment
2. Definite & certain terms
3. Communication to offeree

Question 7

What is the difference between an offer and an invitation to treat?

Answer 7

An offer is a definite intention to contract, an invitation to treat is an invitation to begin negotiations

Question 8

Explain the element of an offer requiring definite and certain terms?

Answer 8

Terms must be capable of enforcement
- Not vague, uncertain, incomplete

Question 9

Explain the communication element of an offer?

Answer 9

The offeree must have knowledg of the offer

Question 10

What communications do not amount to an offer?

Answer 10

1. Responses to requests for information
2. Invitations to treat (adverts, shop sales, price lists, tenders, auctions, price quotations)

Question 11

Someone sends me an email asking if I will sell them my car and asks me what my best price is, I respond saying it is R7,000. Is this an offer?

Answer 11

No, it is a response to a request for information

Question 12

If I ask Mishka if she would be interested in buying my car for R7,000, is this an offer?

Answer 12

No, it is an invitation to Mishka to make an offer (i.e. to treat)

Question 13

Is an advert an offer or an invitation to treat?

Answer 13

An invitation to treat because a shop would not be able to fulfil the contract if everyone accepted the “offer”

Question 14

Are goods displayed in shop windows or shelves offers or invitations to treat?

Answer 14

Invitations to treat because the customer makes the offer to buy at the tillpoint and is accepted when the shopkeeper rings up the sale

Question 15

Are price lists offers or invitations to treat?

Answer 15

Invitations to treat because the person issuing the price list would be obliged to sell to anyone who accepted the offer despite not having enough stock

Question 16

What is a tender and is it an offer?

Answer 16

It is an invitation to parties to submit bids setting out terms on which they will do work. It is not an offer but the submissions are offers

Question 17

Is an auction an offer?

Answer 17

Nope, it is an invitation to treat. The offerors are the bidders and they can withdraw their offer any time before the hammer falls. Falling of the hammer is acceptance of the offer

Question 18

Is a price quotation an offer or an invitation to treat?

Answer 18

Depends on the prior correspondence

Question 19

Unilateral contracts are the exception to the rule that adverts are not offers, explain what they are and why?

Answer 19

When the offeror promises to do something if the offeree does something in return, and that offeree actually does what was asked (e.g lost dog reward)

One party assumes an obligation and the other accepts by performance

Question 20

As a general rule, can an offer be accepted after the offer has been terminated by an act of either party or by operation of law?

Answer 20

No

Question 21

How can an offer be terminated?

Answer 21

1. Revocation
2. Termination by offeree expressly, by making a counteroffer, rejection of collateral contract or lapse of time

Question 22

What is termination of an offer by revocation?

Answer 22

When offeror retracts the offer directly or indirectly.

Question 23

How does an offeree know if the offeror has indirectly revoked the offer?

Answer 23

He receives correct information from a reliable source of the offerors acts which indicates to a reasonable person that the offeror no longer wishes to make the offer.

Question 24

When is revocation effective?

Answer 24

When received by the offeree

Question 25

What is the time limit for revocation of an offer?

Answer 25

Any time before acceptance

Question 26

Can you revoke an offer even if you promise not to revoke it?

Answer 26

Yes

Question 27

When can you not revoke an offer?

Answer 27

1. Collateral contract
2. Beginning performance under an offer for unilateral contract

Question 28

What is a collateral contract?

Answer 28

The offeree gives consideration to offeror to not revoke an offer (for example, 100 bucks to not sell your car for 5 days)

Question 29

In a unilateral contract, when can you not revoke an offer?

Answer 29

Once performance has begun

Question 30

In what way can a bilateral offer be accepted?

Answer 30

By promise or performance

Question 31

When can a bilateral offer not be revoked?

Answer 31

When performance begins and the offeror does not stipulate a method of acceptance

Question 32

How can an offeree terminate an offer?

Answer 32

Expressly (by rejection) or implied (like a counteroffer of effluxion of time)

Question 33

When is a rejection by an offeree effective?

Answer 33

When received by the offeror

Question 34

Is making a counteroffer rejection of the offer?

Answer 34

Yes, and the counteroffer is a new offer

Question 35

Is a request for more information a rejection of an offer?

Answer 35

No, it is not a counter offer

Question 36

Does rejection/counteroffer to a collateral contract (agreement to keep an offer open) terminate the offer for the main contract?

Answer 36

No

Question 37

When does an offeree reject an offer due to time?

Answer 37

1. If time for acceptance specified lapses
2. If no acceptance within a reasonable period

Question 38

How does an offer terminate by operation of law?

Answer 38

1. Death of a party
2. Destruction of the subject matter
3. Supervening illegality
4. Failure of a condition in the offer

Question 39

What is acceptance of an offer?

Answer 39

Unqualified assent to terms of the offer

Question 40

Is acceptance with a caveat to vary a term still acceptance?

Answer 40

No, it is a counteroffer

Question 41

Who can accept an offer?

Answer 41

The person or class of persons to whom the offer is directed

Question 42

Can an offeree’s right to accept an offer be assigned?

Answer 42

No, but an agent can be appointed by them

Question 43

What key knowledge must the offeree have in order for there to be valid acceptance?

Answer 43

The offeree must know of the offer

Question 44

How can an offer be accepted?

Answer 44

1. Method specified
2. Any medium reasonable under the circumstances

Question 45

If the offeror specifies a method of acceptance as e-mail, and I send him a whatsapp message, is there acceptance?

Answer 45

Yes - rule that the different method is no less advantageous to the offeror

Question 46

Is silence acceptance of an offer?

Answer 46

No, positive steps must be taken

Question 47

What is acceptance of an offer for a unilateral contract?

Answer 47

Completion of performance

Question 48

Is an offeree of a unilateral contract obliged to complete performance?

Answer 48

No

Question 49

For a unilateral contract, is notice required to the offeror by the offeree for performance being initiated?

Answer 49

No, only within a reasonable time after completion of performance

Question 50

An offeree cannot accept by silence, but what about by conduct?

Answer 50

Yes IF offeror is aware of the offeree’s conduct (commnunication)

Question 51

For bilateral contract, acceptance must be COMMUNICATED, but when can this requirement be waived?

Answer 51

Expressly or implied by behaviour

Question 52

What is the postal rule for acceptance?

Answer 52

Acceptance by post occurs AT THE MOMENT OF POSTING

Question 53

When does the postal rule not apply?

Answer 53

1. Letter is improperly addressed and stamped
2. Not reasonable for acceptance to be communicated by post
3. Offer stipulates (express or implied) that acceptance is not effective until recieved

Question 54

When is rejection of an offer effective, and when is acceptance effective?

Answer 54

1. Rejection = at the time of rejection being communicated
2. Acceptance = at the time of communication UNLESS post = at the time of posting

Question 55

What is the last shot rule in the battle of the forms?

Answer 55

Battle is won by person who fires the last shot