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18BSA026 - Principles of Law > L2 - Contract Law - Offer and Acceptance > Flashcards

L2 - Contract Law - Offer and Acceptance Flashcards

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1
Q

How is a contract defined?

A

A contract is an agreement made between two or more parties which is legally binding on them. (Jones, 2017)

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2
Q

What are the fundamentals of a contract?

A
  • Offer from one party

- Acceptance from another

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3
Q

What is an Offer?

A
  • Statement (or expression) of willingness to contract on certain terms made … (tangible action)
  • Basically you give me the terms i willing to contract on
  • With the intention that when accepted a binding agreement will exist…. (corresponding mental element)
  • Can be made to a single person; a group of people; or to the whole world like a reward (e.g. lost dog)
  • Essentially, a willingness to be bound by the offer.
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4
Q

How do you make an offer?

A
  • Orally (verbally) – ‘I will buy this used textbook from you for £5’
  • In Writing – usually for more complex transactions –property/business/university/mobile phone/bank accounts etc
  • Implied by action – buying something from a shop
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5
Q

What is the difference between an Offer and Invitation to Treat (I2T)?

A
  • An invitation to another person to make an offer to contract.
  • ‘These are the term is will accept if you offer them’
  • It is not capable of being accepted by the other party.
  • It is an indication that the party is open to negotiation.
  • Meal Deal –> bringing to the till is actually a Invitation to Treat
  • Whereas if i brought an item to the till this like a bottle of water that is a offer
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6
Q

What case has been about an Offer versus Invitation to Treat?

A
  • Gibson v Manchester City Council (1979)
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7
Q

What was the case of Gibson v Manchester City Council (1979)?

A

Case:

  • Council had a policy of selling council houses to tenants
  • Gibson was in the negotiating stage and had a letter from council saying that they “may be prepared to sell at a price of£ 2,725 less 20% freehold” stating that the letter was not a firm offer of a mortgage.
  • Gibson completes and returns application form.
  • Policy changes after election and sale doesn’t happen.
  • Gibson sued the council.
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8
Q

What was the issue of Gibson v Manchester City Council (1979)?

A

Issue:

Do the words “may be willing to sell” consist of a contract?

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9
Q

What was the ruling of Gibson v Manchester City Council (1979)?

A

Ruling:

“May be willing to sell” did not constitute an offer from the council, and so no binding contract had yet been formed.

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10
Q

What are the two cases about Offer versus Invitation to Treat when Displaying Goods for Sales?

A
  • Pharmaceutical Society of Great Britain (PSGB) v. Boots (1953)
  • Fisher v Bell (1961)
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11
Q

What was the Case of Pharmaceutical Society of Great Britain (PSGB) v. Boots (1953)?

A

Case:

  • Boots operated a self-service system where customers put goods in their baskets and took them to the till where there was a registered pharmacist.
  • It was an offence to sell goods without a pharmacist.
  • The Society argued that displays of goods were an “offer” and when a shopper selected and put the drugs into their shopping basket, that was an “acceptance“ as no pharmacist had supervised the transaction at this point.
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12
Q

What was the Issue of Pharmaceutical Society of Great Britain (PSGB) v. Boots (1953)?

A

Issue:

Offer or invitation to treat?

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13
Q

What was the Ruling of Pharmaceutical Society of Great Britain (PSGB) v. Boots (1953)?

A

The Court held that the display of a product in a store with a price attached is not sufficient to be considered an offer, but rather is an invitation to treat.

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14
Q

What was the Case of Fisher v Bell (1961)?

A

Case:

  • The defendant displayed a flick knife in the window of his shop next to a ticket bearing the words Ejector knife – 4s (shillings).
  • It was illegal to sell this knife under section 1 of the Restriction of Offensive Weapons Act 1959 .
  • Shopkeeper charged with the offence of offering to sell
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15
Q

What was the Issue of Fisher v Bell (1961)?

A

Issue:

  • Offer or invitation to treat?
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16
Q

What was the Ruling of Fisher v Bell (1961)?

A

Ruling:

The Court held that the display of the knife was an invitation to treat and not an offer to sell, so no offence had been committed. If shopkeeper had said yes then it is illegal.

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17
Q

Is it an Offer or an Invitation to Treat when a Website is selling goods?

A
  • Same principles apply to a shop shelf and window

- still an Invitation to Treat

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18
Q

Is an Advert an Offer or an Invitation to Treat?

A
  • Same principles apply to bricks and mortar stores and websites.
  • Generally, they are invitations to treat NOT offers.
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19
Q

What is the case of Offer versus Invitation to Treat when looking at Advertisements?

A

Partridge v Crittenden (1968)

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20
Q

What was the Case of Partridge v Crittenden (1968)?

A

Case:
Partridge placed an advert in “Cage and Aviary Birds“ magazine for the sale of Bramblefinch cocks at 25s each.
In no place was there any direct use of the words “offer for sale”.
Partridge was charged with illegally offering for sale a live wild bird contrary to the 1954 Protection of Birds Act.

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21
Q

What was the Issue of Partridge v Crittenden (1968)?

A

Issue:

Offer or invitation to treat?

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22
Q

What was the Ruling of Partridge v Crittenden (1968)?

A

Ruling:

The Court held that the advertisement was an invitation to treat and not an offer to sell, so no offence had been committed.

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23
Q

Why does the court take the approach of Advertisements as an Invitation ot Treat?

A

What would happen if 50 million people all wanted this TV

  • Offers to the world
  • Limited supply
  • Has to be invitation to treat or millions of contracts will be broken.
  • That’s why stores can not sell you something or put a limit on what you can buy
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24
Q

What is a Unilateral Contract?

A
  • This is the exception to the usual rule that contracts are bilateral – ie when accepted BOTH parties are under a legal obligation to perform their duties.
  • Pet Owner offers a reward (offer)
    Nobody is obliged to find the dog, there is no DUTY to perform the action.
  • If someone chooses to carry out the action and return the dog, then they have accepted the offer and the pet owner has to pay the reward.
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25
Q

When is the case of Offer versus Invitation to Treat with when an advertisement is a Unilateral Offer?

A

Carlill v Carbolic Smoke Ball Ltd (1893)

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26
Q

What was the Case of Carlill v Carbolic Smoke Ball Ltd (1893)?

A

Case:

  • The advert promised £100 (equiv to £10k in 2016) to anyone that contracted flu after using the smokeball in accordance with the guidelines on the packaging.
  • As ‘evidence of sincerity’ £1,000 was deposited in the bank to pay any claims.
  • Carlill used the medicine as directed, caught the flu, but the company refused to pay. Carlill sued for £100.
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27
Q

What was the Issue of Carlill v Carbolic Smoke Ball Ltd (1893)?

A

Issue:

Offer or invitation to treat?

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28
Q

What was the Ruling of Carlill v Carbolic Smoke Ball Ltd (1893)?

A

Ruling:

The Court of Appeal held that the advertisement was a unilateral offer to the world at large.
Communication of acceptance not necessary, only performance.
£1,000 showed that CSB intended to pay claims.

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29
Q

What was the Company’s defence of the Case of Carlill v Carbolic Smoke Ball Ltd (1893)?

A

1 –> You cannot make an offer to the world as commercially unrealistic (eg Partridge v Crittenden) – but no practical reason why not, so dismissed (maybe £1,000 deposited).
2 –>Trading Puffery (exaggerated the claim to sell things) – dismissed, saying it was part of the offer not a boast.
3 –> Didn’t state duration – CoA said that as long as you are using it, that period MUST be the one you are claiming against.
4–> Essentially a reward for buying the smokeball and it failing.

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30
Q

What is Tenders?

A
  • A tender is where a person seeking to have work carried out issues a statement asking parties to submit the terms on which they are prepared to carry out this work.
  • The tender is an I2T.
  • The inviter is under no obligation to accept any offer, even if it is the highest tender (or lowest price).
  • If the outcome is specified, then that tender is classed as an offer (e.g. lowest/highest price)
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31
Q

What are the Cases of Offer versus Invitation to Treat when looking at Tenders?

A
  • Spencer v Harding (1870)

- Harvela v Royal Trust Co (1985)

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32
Q

What was the Case of Spencer v Harding (1870)?

A

Case:

  • The defendants were selling stock and sent a circular asking for offers, to be opened at a set time and date.
  • The Defendants did not promise to sell the stock to the highest bidder.
  • The Claimants sent a tender to the Defendants which, following the submission of all tenders, was the highest tender.
  • The Defendants refused to sell the stock to the Claimants.
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33
Q

What was the Issue of Spencer v Harding (1870)?

A

Issue:

Offer or invitation to treat?

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34
Q

What was the Ruling of Spencer v Harding (1870)?

A

Ruling:

  • The circular was not an offer, but merely an invitation to gather tenders, upon which the Defendants were entitled to act.
  • It was stated ‘Obiter’ that if the tender had said ‘highest bidder’ then it is an offer.
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35
Q

What was the Case of Harvela v Royal Trust Co (1985)?

A

Case:
-The defendants invited offers by sealed tender for shares in the company and undertook to accept the highest bid..
- Harvela bid $2,175k, Sir Leonard Outerbridge bid $2,100k or $101k higher than any other offer.
- Royal Trust accepted the latter, essentially £2.276k.
Harvela sued.

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36
Q

What was the Issue of Harvela v Royal Trust Co (1985)?

A

Issue:

Tenders - Referential Bids

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37
Q

What was the Ruling of Harvela v Royal Trust Co (1985)?

A

Ruling:

  • Outerbridge was not entitled to submit a ‘referential bid’ so found for Harvela.
  • When a sum of money, a referential bid is generally not allowed, but does depend on the wording.

As a strategy very risky for business anyway – eg Harvela could have offered $2bn. What about Ebay?

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38
Q

What is the Difference between an Offer or Request for Information?

A
  • An offer must be distinguished from a statement made by a party which is merely giving information to the other party or expressing an intention to do something in the future.

-Eg, Will you do A if B happens?
Eg 2. In a week’s time I intend to sell my house for £1
Are these offers?

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39
Q

What are the Cases of Offer versus Request for Information?

A
  • Harvey v Facey (1893)

- Clifton v Palumbo (1944)

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40
Q

What was the Case of Harvey v Facey (1893)?

A

Case: The defendant, had been carrying on negotiations with the Mayor and Council of Kingston to sell a piece of property in Jamaica.

  • 1 “Will you sell us Bumper Hall Pen? Telegraph lowest cash price-answer paid“
  • 2 Facey replied on the same day: “Lowest price for Bumper Hall Pen £900.”
  • 3 “We agree to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you. Please send us your title deed in order that we may get early possession.”
  • Facey refused to sell. Harvey sued.
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41
Q

What was the Issue of Harvey v Facey (1893)?

A

Issue:

Offer or Request for Information?

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42
Q

What was the Ruling of Harvey v Facey (1893)?

A

Ruling:

Court of Appeal - The second telegraph wasn’t an offer but a statement. The offer came from Harvey which Facey refused.

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43
Q

What was the Case of Clifton v Palumbo (1944)?

A

Case:

  • The claimant (Clifton) wrote several lines offering his land/estate to Palumbo for a price of 600,000 pounds sterling. There were no other details except the name of the property and the offered price.
  • “I also agree that a reasonable and sufficient time shall be granted to you for the examination and consideration of all the data and details necessary for the preparation of the schedule for completion”
  • Clifton changed his mind.
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44
Q

What was the Issue Clifton v Palumbo (1944)?

A

Issue:

Offer or Request for Information?

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45
Q

What was the Ruling Clifton v Palumbo (1944)?

A

Ruling:

The letter was not, “a definite offer to sell”; it was a preliminary statement as to price which in a transaction of that magnitude was, but one of the many things to be considered.

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46
Q

What must be done by the offering part before a party can accept?

A
  • An offer must be communicated to the other party before there can be acceptance.
  • You cannot accept an offer if you were not aware of it.
  • Could occur when there is a reward for something e.g. lost cat.
  • Cannot claim it retrospectively if you didn’t know about reward.
    Motive doesn’t matter (would have returned the cat for free) – still need to pay
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47
Q

What are the two Cases around Communication of Offer?

A
  • Bloom v American Swift Watch Co (1915)

- R v Clarke (1927)

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48
Q

What was the Case of Bloom v American Swift Watch Co (1915)?

A

Case:

Claimant gave information concerning a jewel thief. Tried to claim a reward later.

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49
Q

What was the issue of Bloom v American Swift Watch Co (1915)?

A

Issue:

Communication of an Offer?

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50
Q

What was the Ruling of Bloom v American Swift Watch Co (1915)?

A

Ruling:

The defendant was not legally obliged to pay the claimant.

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51
Q

What was the Case of R v Clarke (1927)?

A
  • Evan Clarke tried to claim the reward of £1000 for giving information that led to the conviction of a murderer.
  • Clarke gave the information in June while he was on trial himself as an accessory for murder.
  • The evidence was reported to be that he gave information to clear himself and not necessarily for the reward.
  • Essentially he had forgotten about the offer so gave the information for another reason.
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52
Q

What was the Issue of R v Clarke (1927)?

A

Issue:

Communication of an Offer?

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53
Q

What was the Ruling of R v Clarke (1927)?

A

Ruling:

The defendant was not legally obliged to pay the claimant.

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54
Q

When is an Offer Terminated?

A

An offer will continue until it is terminated in one of five ways:

1 - Acceptance
2 - Lapse of Time
3 - Death of the Offeror or Offeree
4- Rejection / Counter Offer
 5 - Revocation
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55
Q

What is Acceptance as a way to terminate an Offer?

A

1 - Unconditional agreement to all of the terms.

2 - It can be written, spoken, by conduct (action) or the fall of an auction hammer.

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56
Q

What was the Case of Acceptance as a way of Terminating an Offer?

A

Brogden v Metropolitan Railway Company (1877)

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57
Q

What was the Case of Brogden v Metropolitan Railway Company (1877)?

A
  • Brogden supplied coal for years without a contract.
  • A draft agreement was written which Brogden amended and signed, It was never returned.
  • A few years later when there was a dispute, Brogden argued that there had been no contract as his was a counter offer which had never been accepted.
58
Q

What was the Issue of Brogden v Metropolitan Railway Company (1877)?

A

Issue:

Termination of an Offer - Acceptance

59
Q

What was the Ruling of Brogden v Metropolitan Railway Company (1877)?

A

Ruling:

Returning the draft contract altered was a counter offer, but its terms were accepted by the actions of both parties.

60
Q

What is Lapse of time as a way to terminate an Offer?

A

1 - If there is a time limit then the offer is terminated at that point.

2 - If no time limit, then the offer will lapse after ‘a reasonable time).

61
Q

What was the Case of Ramsgate Victoria Hotel v Montefiore (1866)?

A

Montefiore offered to buy shares in June.

In November, the company accepted the offer (when the share price had fallen).

Montefiore no longer wanted the shares.

62
Q

What was the Issue of Ramsgate Victoria Hotel v Montefiore (1866)?

A

Issue:

Termination of an Offer – Lapse of time

63
Q

What was the Ruling of Ramsgate Victoria Hotel v Montefiore (1866)?

A

Ruling:

A reasonable time had already passed and the offer had therefore lapsed.

64
Q

What is Death as a way to terminate an Offer?

A

1 - You cannot accept an offer from a dead person.

2 - There is no-one to make the contract with.

65
Q

What is Rejection or Counter Offer as a way to terminate an Offer?

A

1 - Once an offer is rejected it ceases to exist.
2 - Trying to accept it once you have rejected it is essentially a new offer.
3 - Can reject by refusal or by counter-offer.
4 - A request for information about an offer is not a counter-offer.

66
Q

What are the two cases on Rejection or Counter Offer as a way to terminate an Offer?

A
  • Hyde v Wrench (1840)

- Stevenson v McLean (1880)

67
Q

What is the Case of Hyde v Wrench (1840)?

A
  • Wrench offered to sell his farm in Luddenham to Hyde for £1000 on 6th June, an offer which Hyde declined.
  • Hyde offered £950 on 27th June which Wrench rejected.
  • Hyde agreed to buy the farm on 29th June for £1000 without any additional agreement from Wrench, and after Wrench refused to sell the farm to him he sued for breach of contract.
68
Q

What is the Issue of Hyde v Wrench (1840)?

A

Issue:

Termination of an Offer – Rejection/Counter-offer

69
Q

What is the Ruling of Hyde v Wrench (1840)?

A

Ruling:

The original offer of £1000 was ended as soon as Hyde made the counter offer.

70
Q

What is the Case of Stevenson v McLean (1880)?

A
  • McLean offered to sell iron to
  • Stevenson at £2 cash per tonne.
    Stevenson telegraphed asking if it could be paid over two months and received no reply.
  • Stevenson telegraphed again saying he’d agree to buy it.
  • McLean had sold to a third party. Stevenson sued, McLean claimed the first telegraph was a counter offer which he had rejected.
71
Q

What is the Issue of Stevenson v McLean (1880)?

A

Issue:

Termination of an Offer – Rejection/Counter-offer

72
Q

What is the Ruling of Stevenson v McLean (1880)?

A

Ruling:

The first telegraph was a request for information as opposed to a counter offer, so the second telegraph was acceptance.

73
Q

What is Revocation as a way to Termination of an Offer?

A

1 - The offer to make a contract is withdrawn.
2 - May be revoked any time, even if it was originally for a fixed period.
3 - Can be revoked before acceptance.
4 - Must be communicated to the offeree.

74
Q

What are the Three Cases of Revocation as a way to Termination of an Offer?

A
  • Byrne v Van Tienhoven (1880)
  • Tenax Steamship Co v Owners of the Motor Vessel Brimnes [1974]
  • Dickinson v Dodds(1876)
75
Q

What was the Case of Byrne v Van Tienhoven (1880)?

A

1/10 – VT wrote to B offering to sell them 1000 boxes of tinplates.

8/10 – VT wrote to revoke the offer.
11/10 – B received original offer letter and accepted the offer by telegram.

15/10 – B confirmed acceptance by letter.

20/10 – B received the letter of revocation

76
Q

What was the Issue of Byrne v Van Tienhoven (1880)?

A

Issue:

Termination of an Offer – Revocation

77
Q

What was the Ruling of Byrne v Van Tienhoven (1880)?

A

Ruling:

The offer withdrawal is only effective when it is received. The contract was confirmed on 11/10.

See the postal rule for acceptance – contradictory to this

78
Q

What was the Case of Tenax Steamship Co v Owners of the Motor Vessel Brimnes [1974]?

A
  • The ship called Brimnes belonged to the defendants,.
    They agreed to sell her to the complainant, which was on the condition that the ship would be time-chartered back to them.
  • On several occasions, the hire payment was made later than agreed.
  • In response, the complainant sent a message by Telex, which gave notice of withdrawal of the ship from service.
  • This Telex message was sent during normal office hours.
    However, the defendant did not read it until the next day and had already made payment.
79
Q

What was the Issue of Tenax Steamship Co v Owners of the Motor Vessel Brimnes [1974]?

A

Issue:

Termination of an Offer – Revocation

80
Q

What was the Ruling of Tenax Steamship Co v Owners of the Motor Vessel Brimnes (1974)?

A

Ruling:

It was held that the withdrawal was effective when Telex message was received, not when the message was read. As it was sent during normal office hours, the staff neglected to pay attention to the Telex machine

81
Q

What was the Case of Dickinson v Dodds (1876)?

A
  • Dodds offered to sell his house to Dickinson.
  • Offer open until 9am Friday.
  • Before Dickinson accepted, Berry told him that Dodds had sold his house to Allan.
  • Dickinson sued Dodds.
82
Q

What was the Issue of Dickinson v Dodds (1876)?

A

Issue:

Termination of an Offer – Revocation / 3rd Party

83
Q

What was the Ruling of Dickinson v Dodds (1876)?

A

Ruling:

An offer can be withdrawn at any time before acceptance and that withdrawal can be communicated by a third party.

84
Q

What is Revocation of Offer in Unilateral Contracts as a Way of Terminating an Offer?

A

1 - A promise to do A in return for doing B - on performing an act (eg Reward for lost dog).
2 - Acceptance valid when the act is ‘fully’ performed.
3 - Logically offer is revocable up to completion of the act.
4 - Harsh if nearly completed though
5 - If you have started to perform the act it cannot be revoked.

85
Q

What are the two cases of Revocation of Offer in Unilateral Contracts as a Way of Terminating an Offer?

A
  • Errington v Errington and Woods (1952)

- Daulia v Four Millbank Nominees (1978)

86
Q

What was the Case of Errington v Errington and Woods (1952)?

A
  • A father bought a house for his son and daughter-in-law (d.i.l) to live in.
  • He paid the deposit, his son and d.i.l. were to pay the mortgage.
  • He promised the house should stay with the son and d.i.l. as long as they kept up payments. Then it was theirs when all payments had been made.
  • When the father died, he left the house to his widow and she claimed possession.
  • All payments had been made on time.
87
Q

What was the Issue of Errington v Errington and Woods (1952)?

A

Issue:

Termination of an Offer – Revoc’n of unilateral offer

88
Q

What was the Ruling of Errington v Errington and Woods (1952)?

A

Ruling:

The father’s promise was a unilateral contract. It could not be revoked once the couple entered performance.

The couple were entitled to have the property transferred to them if they continued payments.

89
Q

What was the Case of Daulia v Four Millbank Nominees (1978)?

A
  • Daulia, wanted to purchase property from the defendants, Four Millbank Nominees.
  • The parties had agreed terms orally, but there was no written contract between them.
  • Four Millbank Nominees promised the complainant that if a banker’s draft was arranged for the deposit and this was completed before 10am on the 22nd December, a written contract would be drawn up.
  • Daulia proceeded to fulfil this request, but the defendants refused to complete the sale of the property.
90
Q

What was the Issue of Daulia v Four Millbank Nominees (1978)?

A

Issue:

Termination of an Offer – Revoc’n of unilateral offer

91
Q

What was the Ruling of Daulia v Four Millbank Nominees (1978)?

A

Ruling:

  • It was held that a unilateral contract did exist, but this could not be effective as it did not comply with section 40(1) of the Land of Property Act 1925.
  • The court stated that until performance, an offeror can revoke the offer he has made at any time. There would be no binding contract between the two parties.
  • However, once the offeree has begun performance, the offer comes into effect and it can no longer be revoked by the offer or to the contract.

Essentially two separate offers:
1 the main offer
2 a collateral offer keeping the main offer alive once performance of the act has begun.

92
Q

What is Revocation of Offers to the World as a way of Terminating an Offer?

A

1 - Very difficult to expect an offeror to communicate the revocation to everybody.

2 - See Carlill for offers to the world.

3 - Sufficient for the offeror to revoke the offer through the same channel in which the offer was first communicated with ‘the same notoriety’ (size and emphasis)

93
Q

What was the Case of Revocation of Offers to the World as a way of Terminating an Offer?

A

Shuey v US (1875)

94
Q

What is the Case of Shuey v US (1875)?

A
  • US posted reward ($25,000) for info leading to Suwatt’s arrest. (Suwatt was an accomplice of Booth. Booth was President Lincoln’s assassin. )
  • 7 months later, US posted notice to revoke offer, in the same manner.
  • Marie, unaware of revocation provided information on criminal which lead to apprehension.
  • Shuey, Marie’s executor, sued to claim reward ($25,000) due Marie.
95
Q

What is the Issue of Shuey v US (1875)?

A

Issue:

Termination of an Offer – Rev’n – offer to the world

96
Q

What is the Ruling of Shuey v US (1875)?

A

Ruling:

Notice of revocation was communicated in same method as notice of offer. Revocation received same notoriety as offer, hence it was validly communicated.
Though plaintiff was genuinely ignorant of revocation, it is immaterial.

97
Q

How is Acceptance defined?

A

‘A final unqualified expression of assent to all the terms of an offer’. Treitel (1991).

  • It must be an unconditional yes to an offer.
  • Acceptance must be absolute and unqualified.
  • If acceptance introduces any new terms it is a counter-offer.
98
Q

How is Acceptance Communicated?

A

General rule: acceptance must be reasonably communicated to the offeror

  • Oral
  • In Writing (including email)
  • Conduct (Brogden v Metropolitan Railway Company 1877)

What about silence?

  • You cannot assume that silence is assent.
  • Can it ever be assent?
  • Silence can be classed as assent if the assent is backed up by action – ie performance is started.
99
Q

What was the Case of Acceptance in the form of Silence?

A

Felthouse v Bindley (1862)

100
Q

What was the Case of Felthouse v Bindley (1862)?

A
  • Felthouse wanted to buy a horse from his nephew.
  • After a discussion he said “If I hear no more about him, I consider the horse mine at £30.15s”
  • The nephew didn’t reply but he told Bindley (the auctioneer) not to sell the horse. By accident Bindley did.
  • The uncle sued Bindley.
  • Bindley argued that the contract for the horse hadn’t been accepted by the nephew.
101
Q

What was the Issue of Felthouse v Bindley (1862)?

A

Issue:

Can silence be acceptance?

102
Q

What was the Ruling of Felthouse v Bindley (1862)?

A

Ruling:

  • There was no contract even though the nephew intended the uncle to have the horse.
  • It was held that the uncle had no right to impose upon the nephew a sale of his horse and as the nephew had not communicated acceptance in any way, the horse wasn’t the uncles.
103
Q

What are different Modes or Methods of Acceptance?

A
  • If the offeror doesn’t state a method of acceptance then any ‘reasonable’ method can be used.
  • When the offer states that it can only be accepted in a certain way (ie fax, post, email etc) the acceptance will only be valid if it is made that way.
  • When will a stipulated way of acceptance be deemed mandatory or discretionary?
104
Q

What was the Case of Yates Building Co Ltd v Pulleyn & Sons (1975)?

A
  • Pulleyn offered Yates an option to buy some building plots exercisable in writing between 6th April and 6th May 1973.
  • Pulleyn said the option was “exercisable by registered or recorded delivery”
  • Yates replied by normal post in the timeframe.
  • Pulleyn refused to sell saying they had not followed the post option correctly.
105
Q

What was the Issue ofYates Building Co Ltd v Pulleyn & Sons (1975)?

A

Issue:

Is stipulated way of acceptance deemed to be mandatory or discretionary

106
Q

What was the Ruling of Yates Building Co Ltd v Pulleyn & Sons (1975)?

A

Ruling:

Court originally agreed with Pulleyn.
CoA (Denning) disagreed saying the mode was permissive not mandatory. It was no less advantageous to Pulleyn and the method was for the benefit of the offeree.

107
Q

How can Post be used as Acceptance?

A
  • A quirk of English Law
    Where it applies, acceptance by post is valid from the time of posting if correctly stamped and addressed.
  • Has to be posted in a letter box or handed over a counter at the Post Office.
  • Not when it is received (contrary to revocation of an offer).
  • Why?
  • Maybe the person if he knew you had sent a letter could tell you he’d revoked it before it arrived, or made sure it was intercepted and destroyed before it arrived.
108
Q

What was the two Cases of Postal Acceptance?

A
  • Adams v Linsdell (1818)

- Household Fire Insurance v Grant (1879)

109
Q

What was the Case of Adams v Linsdell (1818)?

A
  • On 2 September, the defendants wrote to the plaintiffs offering to sell them fleeces of wool and requiring an answer in the course of post by 7 September.
  • The defendants misdirected the letter so that the plaintiffs did not receive it until 5 September.
  • The plaintiffs posted their acceptance on the same day but it was not received until 9 September.
  • On 8 September, the defendants, not having received an answer by 7 September as they had expected, sold the wool to someone else.
110
Q

What was the Issue of Adams v Linsdell (1818)?

A

Issue:

When was the acceptance?

111
Q

What was the Ruling of Adams v Linsdell (1818)?

A

Ruling:

  • Acceptance valid on the day of posting. (5th)
  • The delay was the defendants mistake so were in breach of contract.
112
Q

What was the Case of Household Fire Insurance v Grant (1879)?

A
  • Grant applied for shares in the Household Fire and Carriage Accident Insurance Company.
  • The company allotted the shares to the defendant, and duly addressed to him, posting a letter containing the notice of allotment.
  • The letter was lost in the post and he never received the acceptance.
  • Later the company went bankrupt, and asked Mr Grant for the outstanding payments on the shares, which he refused saying there was no binding contract.
  • The liquidator sued.
113
Q

What was the Issue of Household Fire Insurance v Grant (1879)?

A

Issue:

When was the acceptance?

114
Q

What was the Ruling of Household Fire Insurance v Grant (1879)?

A

Ruling:

There was a valid contract, because the rule for the post is that acceptance is effective even if the letter never arrives

115
Q

When does Acceptance by Post apply?

A
  • When does it apply?
    When it is ‘reasonable’ to post the acceptance.
  • Whether the offeror states that acceptance may be by post.
  • Whether previous dealings between the parties were by post.
  • The offer was posted
  • Postal rule can be displaced by contrary intention (Holwell 1974)
  • The postal rules only apply to acceptance of an offer and not to the offer itself or a revocation of an offer.
116
Q

What are the two Cases about whether or not Acceptance by Post is Reasonable or When it is Excluded?

A
  • Henthorn v Fraser (1892)

- Holwell Securities v Hughes (1974)

117
Q

What was the Case of Henthorn v Fraser (1892)?

A
  • The defendant and the claimant were situated at Liverpool and Birkenhead respectively.
  • The defendant called at the office of the claimant in order to negotiate the purchase of some houses.
  • The defendant handed the claimant a note giving him the option to purchase some houses within 14 days. On the next day, the defendant withdrew the offer by post, but his withdrawal did not reach the claimant until 5 P.M.
  • Meanwhile, the claimant responded by post with an unconditional acceptance of the offer, which was delivered to the defendant after its office had closed. The letter was opened by the defendant the next morning.
118
Q

What was the Issue of Henthorn v Fraser (1892)?

A

Postal Rule - When is reasonable?

119
Q

What was the Ruling of Henthorn v Fraser (1892)?

A

Ruling:

The fact that both parties were living in different towns justifies that a letter may be used to accept the offer.

120
Q

What was the Case of Holwell Securities v Hughes (1974)?

A
  • Hughes granted Holwell an option to purchase land (the offer)
  • The option had to be exercised by giving ‘notice in writing’ within six months.
  • Holwell replied in writing but it was lost in the post.
121
Q

What was the Issue of Holwell Securities v Hughes (1974)?

A

Issue:

Postal Rule - When is it excluded?

122
Q

What was the Ruling of Holwell Securities v Hughes (1974)?

A

Ruling:

The law accepting the offer had to be ‘received’ because the offer had said ‘notice in writing’

123
Q

When is Acceptance By Near Instantaneous Communication and Email?

A
  • General rule - a Telex must ‘arrive’ at the far end to constitute an acceptance.
  • It doesn’t have to be read.
  • Must arrive during business hours for it to be communicated on that day, otherwise the day after.
  • Must be based on the business expectations of the company receiving the acceptance.
  • No legal cases for email and other forms of ‘new’ communication (Direct Messenging, Social Media, etc).
  • Likely to be on a case by case basis until a principle is establish but use the Telex rule as a starting point.
124
Q

What are the 3 Cases to do with Electronic Acceptance?

A
  • Entores v Miles Far East Corp (1955)
  • Brinkibon Ltd v Stahag Stahl (1983)
  • Mondial Shipping and Chartering BV v Astarte Shipping Ltd (1995)
125
Q

What is the Case of Entores v Miles Far East Corp (1955)?

A
  • Entores (London) made an offer to Miles FEC (Amsterdam) by telex.
  • Miles FEC accepted the offer by telex.
126
Q

What is the Issue of Entores v Miles Far East Corp (1955)?

A

Issue:

Telex rule – When was the contract formed?

127
Q

What is the Ruling of Entores v Miles Far East Corp (1955)?

A

Ruling:

The contract had been made in London when the acceptance had been received. Not in Holland when it had been sent

128
Q

What is the Case of Brinkibon Ltd v Stahag Stahl (1983)?

A
  • Brinkibon was a London company that bought steel from Stahag, a seller based in Austria.
  • Brinkibon sent their acceptance to a Stahag offer by Telex to Vienna.
  • Brinkibon later wanted to issue a writ against Stahag and applied to serve an out of jurisdiction party. They would only be able to do so if the contract had been formed in England.
129
Q

What is the Ruling of Brinkibon Ltd v Stahag Stahl (1983)?

A

Issue:

Telex rule – when was the contract was formed?

130
Q

What is the Case of Brinkibon Ltd v Stahag Stahl (1983)?

A

Ruling:

The contract had been made in Vienna where the acceptance was received, not where sent.
Agreed with Entores v Miles Far East

131
Q

What is the Case of Mondial Shipping and Chartering BV v Astarte Shipping Ltd (1995)?

A
  • The owners of a ship sent a telex notice to withdraw a ship from the charters for non-payment of the hire charge.
  • Telex sent at 23:41 on Friday 2nd Dec
  • Payment could be made up to 24:00 on 2nd Dec.
132
Q

What is the Issue of Mondial Shipping and Chartering BV v Astarte Shipping Ltd (1995)?

A

Issue:

Telex rule – when was the telex received?

133
Q

What is the Ruling of Mondial Shipping and Chartering BV v Astarte Shipping Ltd (1995)?

A

Ruling:

The notice was not communicated until 9am on Mon 5th Dec.

134
Q

How can you Accept an Offer by Conduct?

A
  • You do not necessarily have to give acceptance verbally if you perform the task (Carlill v Carbolic Smokeballs)
  • You can infer acceptance by the way parties conduct themselves (Brogden v Metropolitan Railway).
135
Q

What is Acceptance as a Battle of the Forms?

A
  • Standard terms and conditions for each company.
  • Strictly speaking, the latest will be the final ‘counter offer’
  • Usually the companies trade and ignore the differences.
  • Only when a dispute arises is there an issue.
136
Q

What was the Case of Acceptance as a Battle of the Forms?

A

Butler Machine Tool Ltd v Ex-Cell-O Corp Ltd (1979)

137
Q

What was the Case of Butler Machine Tool Ltd v Ex-Cell-O Corp Ltd (1979)?

A
  • Butler sent a standard form contract to Ex-Cell-O offering to sell tools for a fixed price. The standard terms said prices could fluctuate.
  • Ex-Cell-O replied with an order on their standard terms (no price variation) with a space for a signature and a tear-off slip.
  • Butler signed slip and returned, adding a letter saying original standard forms applied.
  • Nothing further said.
  • When goods delivered, Butler tried to claim more and sued when Ex-Cell-O refused.
138
Q

What was the Issue of Butler Machine Tool Ltd v Ex-Cell-O Corp Ltd (1979)?

A

Issue:

Battle of the forms.

139
Q

What was the Ruling of Butler Machine Tool Ltd v Ex-Cell-O Corp Ltd (1979)?

A

Ruling:

Ex-Cell-O entitled to have the goods at the fixed price. Their order was a counter offer which Butler accepted when they returned the slip.

140
Q

What was the Case of Lapse of Time as a way of Terminating an Offer?

A

Ramsgate Victoria Hotel v Montefiore (1866)

141
Q

What was the Case about the Method of Acceptance?

A

Yates Building Co Ltd v Pulleyn & Sons (1975)

18BSA026 - Principles of Law (13 decks)

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