Offer Flashcards
Offer definition
A clear proposal made by one party (the offeror) which shows intention to create legal relations and intent to be bound upon acceptance
Unilateral offer
A contract where one party (offeror) binds itself to perform a stated promise, for the performance of an act/condition by the offeree. The offeree gives no commitment to perform the act/condition, but is left to choose whether or not to perform.
Promise and performance occur at different points
Can be made to one/multiple parties, or entire world
E.g. posters/advertisements for a reward in return for the completion of an act
Bilateral offer
An offer made by one party to another, where the offeror promises something in exchange for a promise of something from the offeree
Exchange of promises takes place at the same time
What are the 4 ways an offer can be terminated?
Counter offer, death of offeror or offeree, lapse of time, revocation
Counter offer
Where the offeree responds to an offer with a change in terms (e.g. price, circumstances) which voids the original offer
Counter offers super-seed the original offer and can either be accepted or rejected by the party who made the original offer
Death of offeror or offeree
Would make performance of contract impossible
However, where the offeree responds is not of personal nature (such as selling furniture), offer can still remain open for acceptance
Lapse of time
If the offer entails a specific time limit to accept, after that time frame the offer will end
Where no specific time limit is stated, the offer will terminate after a reasonable lapse of time
What amounts to a reasonable period depends on the circumstances of the case
Revocation
An offer can be revoked/cancelled at any time before acceptance takes place
Revocation needs to be communicated to the offeree before acceptance takes
Postal rule does not apply to revocation of offer
Invitation to treat
Inviting/making a proposal for someone to negotiate or make an offer
Unlike an offer, there’s no certainty as to if a contact will be formed
E.g. goods on display in shops, advertisements in magazines/newspapers
What is the exception to the advertisements rule in ITT?
Unilateral offers (where a reward will be paid)
Battle of the forms
Pre-drafted set of contract terms make it easier and faster to conclude a contract. The battle is determining which party’s version of a contract/standard terms has precedence:
‘Last shot rule’ - ‘he who fires the last shot wins’ - the courts have ruled that the last party to put forward its standard terms (that were not expressly rejected by other party) before performance takes precedence
‘Knock out rule’ - terms which are common to both parties’ standard terms are kept, any inconsistent terms are ‘knocked out’ and won’t apply
Carlill v Carbolic Smoke Ball Company
Offer / goods/services advertised in media
The advert was an example of a unilateral offer - an offer can be made to anyone and by any method
Gunthing v Lynn
Certainty
An offer must be certain
Felthouse v Bindley
Communication
Offer must be communicated
Taylor v Laird
Communication
Wages could not be claimed as there was no communication of the offer, therefore no contract formed as offeree had no knowledge
Pickfords v Celestica
Counter offer
The counter offer super-seeded and terminated the original offer
Hyde v Wrench
Counter offer
Counter offers super-seed the original offer
Ramsgate Victoria Hotel v Montefiore
Lapse of time
The sheer length of time between offer and acceptance was extreme and has lapsed over a reasonable amount of time
Dickinson v Dodds
Revocation
An offeror is free to withdraw an offer at any time before acceptance
Routledge v Grant
Revocation
Offeror had the right to retract offer at any time during the six weeks before acceptance
Byrne v Van Tienhoven
Revocation
Lindley J ruled that an offer is only revoked by direct communication with the offeree, and postal rule does not apply in revocation
Butler machine tool v Ex-Cell-O Cop Ltd
Battle of the forms - Final offer’s terms apply
Lord Denning criticized the last shot rule, arguing that it’s crucial for courts to look at all communications involved and examine their conduct, then decide whether an agreement has been made. But it was seen that the last shot rule has a degree of certainty.
Fisher v Bell
Invitation to treat
Goods on display in shop windows are invitations to treat
Pharmaceutical Society of Great Britain v Boots
Invitation to treat
The display of controlled drugs at the pharmacy was an invitation to treat. The contract was formed when goods were presented at the till.
Partridge v Crittenden
Invitation to treat
The court held that the advertisement did not amount to an offer, but was merely an invitation to treat
Thornton v Shoe Lane Parking
Coin operated/ traditional machinery
Coin-operated machinery is seen as the offer, and putting money into the machine is the acceptance
Offer plan
Issue - Has valid offer and acceptance been made?
Offer definition
Unilateral - Carlill v Carbolic Smoke Ball Co
Certainty - Gunthing v Lynn
Communication - Felthouse v Bindley, Taylor v Laird
Termination of offer:
- Counter offer - Pickfords v Celestica, Hyde v Wrench
- Death of offeror or offeree
- Lapse of time - Ramsgate Victoria Hotel v Montefiore
- Revocation - Dickinson v Dodds, Routledge v Grant, Byrne v Van Tienhoven
- Apply
Invitation to treat - NOT an offer
- Display of goods - Fisher v Bell, Pharmaceutical Society of GB v Boots
- Advertisements - Partridge v Crittenden
- Exception is unilateral offers where a reward will be paid
- Apply
Battle of the forms
- Last shot rule - Butler machine tool v Ex-Cell-O Cop Ltd
Conclusion - if both offer and acceptance exist, the contract is valid
