Establishing Agreement Flashcards
Does agreeing to something mean there is a binding contract?
No, there must also be consideration and intent to create legal relations.
What does consensus ad idem mean?
A meeting of minds.
Historically, what did the courts look for to find agreement? What did it change to?
Consensus ad idem, a meeting of minds. This was a subjective approach (focusing on what the parties themselves thought) and was difficult to implement.
Now, the courts apply an objective approach (focusing on factual evidence), showing what the parties intended to agree, as viewed by a reasonable person looking at things and said by the parties involved.
Courts now try on a offer and acceptance.
Give examples of cases which questioned whether there was an offer to be accepted?
Gibson v Manchester City Council, where the words ‘may be prepared to sell’ did not count as an offer.
Goodwood v Thyssenkurpp, where ‘subject to the approval of the Board Director’ similar circumstances applied.
Define the offeror and the offeree
Offeror is the one making the offer and the offeree is the person to whom the offer is being made.
Through which means may an offer be made?
Orally
In writing
By conduct
How certain must an offer be?
If a purported offer contains a term that is central to the contract, but is so uncertain that it can not be interpreted or ‘resolved’, the agreement may fail.
E.g. Scammell v Ouston 1941, where five different judges reached five different interpretations of a term stating that a van should be acquired on ‘hire purchase terms’. Judgement was that no valid agreement was found due to phrase being too vague.
When looking at contract law, what do judges usually try to do?
The courts will usually try to give effect contracts, wherever it is possible to do so.
‘The role of the court in a commercial dispute is to give legal effect to what parties have agreed to, not to throw its hands in the air and refuse to do so, because the parties have not made its task easy.’’
What happens if there is uncertainty on one minor point of the contract?
Strike out that time and leave the rest of the contract standing, if it will still make sense.
Nicolene v Simmons [1953], where the court of appeal decided that a statement by the defendant that ‘the usual conditions of acceptance apply’ was meaningless, because there were no ‘usual conditions of acceptance’.
What is a unilateral contract?
A promise in return for an act.
What is a bilateral contract?
A promise for a promise.
What is the case law for a unilateral contract?
Errington v Errington Woods (1952), when a father-in-law bought a house for his son and daughter-in-law in father’s name. If the couple paid the mortgage instalments, he would transfer the legal title to them. Father died, son went to live with mother. Mother inherited house and tried to kick wife out. Court held that the wife could stay in the house due to the unilateral promise that he’d transfer the legal title if they paid mortgage instalments (the Act) and wife was in process of accepting the offer by continuing to make mortgage payments.
Can a unilateral contract be revoked once it has started?
No, if the offeree has started performance of an act specified in a unilateral offer, then it may not be revoked, even if the act is incomplete.
E.g. Errington v Errington Woods (1952)
If Emma found her friend’s cat without seeing the £25 reward, would she be able to claim the reward?
No, the offeree must know about the offer, because they clearly can’t accept something of which they are not aware.
What is the case law around successfully communicating an offer to the offeree?
Taylor v Laird [1856] when a ship’s captain resigned from his post and carried on working on the ship. The employers didn’t agree to pay him as they weren’t aware he was still working on the ship and therefore there was no contract. They could object to it and choose not to pay him for his work.
Williams v Carwardine [1833], the claimant was induced by other motives to give information, she was aware of offer and therefore could still claim the reward.
R v Clarke [1927], contract wasn’t upheld when it was unclear whether Clarke had the reward in mind or not when he provided information that led to a conviction of a murderer.
Can an offer be made to the whole world?
Yes. Carlill v Carbolic Smoke Ball Co Ltd [1893], the defendants, in this case, were the makers of a smoke ball which they claimed could cure and prevent several illnesses, including influenza. They promised a reward of £100 to anyone who used the smoke ball as directed and caught influenza and said that to show their good faith, they had put £1,000 in the bank to pay any claims. Mrs Carlill used the smoke ball as directed and developed influenza, but the defendants refused to pay the reward claiming, among other things, that there was no contract because it was impossible to have a contract with the whole world. In the Court of Appeal, Bowen LJ dealt with this point as follows: “[An advertisement] is not a contract made with all the world … It is an offer made to all the world …”.
In a unilateral contract, at which point does an offer become a contract?
An offer becomes a contract when someone performs the requirements outlined in the notice, or ‘performing the condition’ in Carlill.
What is an invitation to treat?
An invitation to others to make an offer or to open negotiations.
‘Are you interested in a bike? I’m looking for around £50’ - an offer or invitation to treat?
An invitation to treat, to open negotiations.
‘Yes I could buy it for £40’ is an offer.
What is the relevant case law for an invitation to treat?
Harvey v Facey [1893] Harvey sent a telegraph to Facey saying “will you sell me Bumper Hall Pen? Telegraph lowest cash price”. Facey replied “lowest price for Bumper Hall Pen “£900”. Harvey replied “we agree to pay “£900 for Bumper Hall Pen. When Facey refused to go ahead with the deal, Harvey brought an action against him. The action failed and the court found that Facey’s reply was a response to a request for information and not an offer. Facey was simply stipulating the price he would sell at if he decided to sell.
Also Gibson v Manchester City Council [1979], ‘may be prepared to sell’ - held as invitation to treat.
A ring is placed in a shop window with a price tag of £2700. Frank walks in and asks to buy it. Where is the offer?
The shop window is an invitation to treat.
Frank’s request to buy is the offer. The shopkeeping could reject Frank’s offer.
Which 5 situations usually involve some sort of invitation to treat?
Advertisements
Auctions
Requests for tenders
Display of goods for sale
Mere statements of price
What is the difference between the Partridge v Crittenden case and the Carlill case, both advertisements?
The RSPCA’s (Crittenden’s) case did not succeed as the bird advert was an invitation to treat and so he was not guilty of illegally selling birds.
In Carlill, they stated a unilateral offer in the advert ‘If it doesn’t work, you can have your money back’, so it was an offer instead of an invitation to treat.
If Tesco has put £2 for a box of chocolate as the price, instead of the £12 it should be, could we buy it for £2?
It is up to the seller’s discretion in cases where a mistake is made within the advert, such as displaying the wrong price.
E.g. Tesco selling iPads for £49.99, by accident. Many people tried to buy them, but Tesco decided not to honour the invitation to treat (the online price) and rejected the customers’ offers. As the price on the website is only an invitation to treat, they are entitled to not honour that price.
What is a ‘reserve’ in an auction?
A minimum price at which the item can sell for.
If an auction product does have a reserve, where does the invitation to treat and offer stand? Is this a bilateral or unilateral offer?
This is a bilateral contract.
Auctioneer requests bids for the item (invitation to treat). Bidder makes an offer, which the auctioneer accepts by bringing the hammer down.
E.g. In British Car Auctions v Wright [1972] the Divisional Court held that an auctioneer was not committing the crime of “offering for sale” an unroadworthy car when it was sold by auction.
If an auction product does not have a reserve, where does the invitation to treat and offer stand? Is this a bilateral or unilateral offer?
This is a unilateral offer.
Auctioneer promises to sell to the highest genuine bidder, therefore creating a unilateral contract between them and the person who does the Act of making the highest genuine bid.
What happens if an auctioneer refuses to sell a product without a reserve to the highest bidder?
They will be in breach of their contract with that person.
E.g. Barry v Heathcote Ball & Co (Commercial Auctions) Ltd [2000], where some machines were placed for auction without a reserve. When it became apparent that the highest bid would fall nowhere near the value of the machines, the auctioneer withdrew them from the sale. The claimant successfully contended that as the highest bidder, he was entitled to the machines for a price of £200 each even though their value was excessively higher.
What are the rules around eBay auctions?
By offering the goods on eBay, the seller has made a binding offer. They must later recognise the highest bidder as a contractual partner. Transferring the max bid serves as binding acceptance of the offer, so no further declaration of consent is necessary.
