FORMATION CASES

Question 1

Carlill v Carbolic Smoke Ball Co HELD

Answer 1

• An advertisement is not an offer, instead an invitation to treat, because advertisements are too vague, puffery and made to all the world.

Question 2

Dysart Timbers v Nielsen HELD

Answer 2

• For a circumstantial change to be great enough to result in a lapse of offer, it must be explicitly included. (i.e. Nielsen must’ve made the offer valid contingent that he did not get his Supreme Court appeal granted).

Question 3

Boulder Consolidations v Tangaere HELD

Answer 3

-The list of available sections was an offer to treat (which is a form of communication that is not an offer).

• It was not reasonable for Mr. Tangaere to expect that Boulder was holding all sections for him until he choice one. His interest was to sell sections as soon as possible.

Question 4

Butler Machine Tool v Ex-Cell-O FACTS

Answer 4

• An offer to sell a machine with a price escalation clause was made.
• The buyers counter-offered, excluding the price escalation clause, and included a detachable receipt.
• The sellers signed and returned the receipt, stating they accepted on their original terms. - The machine was delivered, and buyers were invoiced with the price escalation clause.

Question 5

Butler Machine Tool v Ex-Cell-O HELD

Answer 5

-Contract was formed on buyers terms excluding price escalation clause.
- Battle of forms should be decided by traditional approach. -The parties terms were so materially different that the buyers made a counter-offer which kills the previous offer.
-contract was formed on buyers terms by virtue of the last shot doctrine.

Question 6

Goodman v Cospak FACTS

Answer 6

• Cospak sold glass bottles (acted as distributor, not manufacturer).
• Goodman trialed Cospak’s product.
• Goodman subsequently terminated the contract.
• Both Cospak and Goodman claimed wrongful termination of the agreement.

Question 7

Goodman v Cospak HELD

Answer 7

• The holistic approach applies when parties’ terms have no direct inconsistencies.
• In such cases, both parties’ shared intentions can be reflected by co-existing their terms.
• Both Goodman and Cospak’s terms acknowledged the contract included terms related to merchantable quality and fitness for purpose.

Question 8

Tekdata v Amphenol FACTS

Answer 8

• Tekdata manufactures cable assembly items and purchases harness connectors from Amphenol.
• They have had a long-term relationship for over 20 years.
• Tekdata claims Amphenol breached the contract by delivering late and providing inadequate quality products.
• Amphenol argues that the contract was based on their standard terms, which exclude liability for such issues, as stated in their order acknowledgment.

Question 9

Tekdata v Amphenol HELD

Answer 9

-Amphenol
Appeal allowed
- Trial judge wrongly used a global approach; should’ve applied offer and acceptance analysis.
- Focus on parties’ objective intent, not what they thought should happen.
- Long relationship matters but doesn’t override clear offer and acceptance.
- Certainty in commercial contracts needs traditional offer and acceptance.
- Traditional approach changes only if communication clearly shows both parties intended new terms.

Question 10

GHP Piling v Leighton Contractors FACTS

Answer 10

• GHP submitted a tender for a major piling contract, claiming this created a preliminary contract.
• Leighton awarded the job to a competitor.
• GHP sued, alleging Leighton breached the preliminary contract.
• GHP sought damages for lost profits.

Question 11

GHP Piling v Leighton Contractors HELD

Answer 11

• It was held that no contract was formed; the invitation to tender was an invitation to treat, not an offer.
• Consequently, no preliminary contract was established.
• The absence of formal contractual language is not fatal to the claim.
• A preliminary tender contract can exist if the inviter provides a clear process with certainty and formality, allowing for an identifiable offer capable of acceptance.

Question 12

South Waikato DC v Roading and Asphalt FACTS

Answer 12

• South Waikato DC invited tenders for solid waste disposal.
• The tender process had two stages.
• Three parties submitted bids; one was eliminated in stage one.
• The remaining two bids were evaluated based on the lowest price conforming method.
• RAL submitted the lowest price but did not receive the contract.
  The other tender was awarded the contract instead.
• RAL sued for breach of tender terms.

Question 13

South Waikato DC v Roading and Asphalt HELD

Answer 13

• The council reserved the right to reject the lowest offer.
• They considered other tenders as more economical for waste disposal.
• This decision was made to avoid a waste disposal levy.