Offer Flashcards
In contract law, how do courts determine if an agreement exists, and what happens if a party’s intentions differ from the apparent meaning of their words or actions?
Courts use the objective test, assessing what a reasonable person would understand from the parties’ words and conduct. Even if a party’s actual intention differs, the objective meaning prevails, as seen in Tamplin v. James, where the court ruled based on the reasonable interpretation of the defendant’s conduct.
What is the legal definition of an offer in contract law, and how does it differ from a preliminary step in negotiations?
An offer is a statement or conduct expressing a willingness to contract on specific terms, intending it to be binding upon acceptance. As highlighted in NTHC Ltd v. Antwi, it’s a clear indication of the offeror’s readiness to be bound, unlike an “invitation to treat,” which lacks this finality.
How does contract law differentiate between an offer and an invitation to treat, and why is this distinction important? B
An offer is a clear expression of willingness to be bound upon acceptance, whereas an invitation to treat is a preliminary step to solicit offers. This distinction, highlighted in NTHC Ltd v. Antwi, is important because it establishes the point at which a contract can be formed.
Are tender notices considered offers that create a binding contract with the highest bidder?
No, tender notices are generally considered invitations to treat, not offers. As illustrated in Spencer v. Harding, the court held that a circular advertising the sale of goods by tender is merely a solicitation for offers, not a promise to accept the highest tender. The tenders submitted in response to the notice are the actual offers.
In a tender for the supply of goods over a period, where the buyer places orders as needed, does the seller’s tender constitute a standing offer, and is the seller bound to fulfill those orders?
Yes, the seller’s tender can be considered a standing offer. In Great Northern Railway v. Witham, the court held that the tender was a standing offer, which was converted into a series of contracts by the company’s subsequent orders, and the seller was bound to supply the goods ordered.
When a government accepts a tender for the supply of food items to a hospital for a fixed period, is this agreement a binding contract, and is the government obligated to purchase all required items from the tenderer?
Yes, the acceptance of such a tender constitutes a binding contract. In Perbi v. Attorney General, the court held that the government was bound to buy and pay for all the goods that were in fact needed, and there would be a breach of contract if the government purchased the items elsewhere.
In a self-service shop, is the display of goods considered an offer to sell?
No, the display is an invitation to treat. As seen in Pharmaceutical Society of Great Britain v. Boots Cash Chemists, the offer is made by the customer when they present the goods for purchase.
How do courts determine the existence of an agreement, as illustrated in Falck v. Williams, and what principle is applied when the parties’ intentions differ from the objective meaning of their words?
Courts use the objective test to determine if an agreement exists. In cases like Falck v. Williams, where the words used are capable of different interpretations and parties intended different things, the court may find no contract if no single reasonable objective meaning can be established. The objective test focuses on what a reasonable person would infer from the parties’ words and conduct, rather than their actual intentions.
What is the significance of Scriven Bros v. Hindley in the context of the objective test
Scriven Bros v. Hindley highlights that if one party is misled by the other’s conduct into misunderstanding the offer, the misleading party cannot enforce the contract according to their own intentions.
Are advertisements generally considered offers or invitations to treat, as seen in Partridge v. Crittenden?
: Generally, advertisements are invitations to treat. Partridge v. Crittenden established that advertisements are invitations to the public to make offers.
In Gibson v. Manchester City Council, what was the court’s view on the council’s communication regarding the sale of houses?
In Gibson v. Manchester City Council, the court had to examine written correspondence to determine whether a contract was formed, highlighting the need to distinguish between preliminary negotiations and a firm offer. More over the statement “may be prepared” made by the Council derived the offer of its finality making it an invitation to treat not an offer.
What did Dormenyor v. Johnson Motors Ltd say about the status of car repair advertisements?
In Dormenyor v. Johnson Motors Ltd, the court ruled that car repair advertisements do not in themselves constitute valid binding agreements.
In auction sales, as per Harris v. Nickerson, is an advertisement of an auction a binding contract to hold the auction?
A: An advertisement of an auction is merely a statement of intention and not a binding contract to hold the auction, as held in Harris v. Nickerson.
When does the offer and acceptance occur in an auction, and what does the Sale of Goods Act, 1962 (Act 137) say about this?
In an auction, the auctioneer’s call for bids is an invitation to treat, and each bid is an offer. The auctioneer accepts the offer by the fall of the hammer.
What are the implications of an auction being “without reserve,” as in Warlow v. Harrison?
In an auction “without reserve,” the auctioneer makes a contract with the highest bona fide bidder to sell the goods at the bid price.
How are bilateral and unilateral contracts defined?
A bilateral contract involves an exchange of promises by both parties, while a unilateral contract involves a promise by one party in exchange for an act by the other.
How does the case of Gibson v Manchester City Council relate to offer
Material facts:
b
Manchester city council adopted a policy to sell council houses to tenants. Gibson wrote to the
council requesting information on the price and terms of mortgage. Manchester City Council
C
replied Gibson stating that the city council “may be
T prepared to sell the house…” to Gibson at a
specified price. The reply from the City Council also mentioned that the letter should not be regarded as
N
a firm offer. A change in the administration of the n
City Council led to the cancellation of the policy,
S
and the consequent refusal to sell to Gibson.
Gibson sued for breach of contract and for an order
of specific performance.
With legal authorities explain how counter offer works
Counteroffers – Summary & Key Principles
• A counteroffer is a response to an offer that introduces new terms, thereby rejecting and terminating the original offer. Once a counteroffer is made, the original offer cannot be later accepted unless it is renewed by the offeror.
• Key Principle: A counteroffer kills the original offer.
•. Case: Hyde v Wench: Hyde made a counter offer which Wench refused, Hyde later accepted the offer but Wench refused to sell the land to him. Wench sued Hyde but the court ruled in favour of Wench since Hyde’s counter offer terminated the initial offer.
• Case: Stevenson, Jacques & Co. v. McLean
The court distinguished between a mere inquiry and a counteroffer.
• Held: A request for clarification without introducing new terms (e.g., asking about delivery) is not a counteroffer, so the original offer remains valid.
With legal authorities explain how the postal rule works.
Postal Rule – Summary & Key Cases
• Principle: When acceptance is sent by post, it is effective once posted, not when received. This holds even if it is delayed or never arrives.
• Key Case: Adams v. Lindsell
• Held: Acceptance was valid when posted, even though it arrived late and the offeror had sold the goods elsewhere.
• Result: A binding contract was formed upon posting.
• Key Case: Household Fire Insurance v. Grant
• Held: Acceptance never reached the offeror, but since it was properly posted, a contract was formed.
• Court emphasized: Posting = acceptance under postal rule.
• Exception to Postal Rule:
Where the offer specifies that acceptance is only valid upon receipt, the postal rule does not apply.
• Case: Holwell Securities Ltd v. Hughes
• Held: Since the offer required acceptance to be “received” by the offeror, postal rule was excluded.
• No contract was formed until actual communication.
NB: The postal rule only works for acceptance
With legal authorities explain the concept of revocation of offers
Revocation of Offers – Summary & Key Cases
• General Rule:
An offer may be revoked anytime before acceptance, but not after. For revocation to be valid, it must be:
1. Before acceptance, and
2. Effectively communicated to the offeree.
- Firm Offers & Consideration
• A firm offer is one kept open for a specified time.
• At common law, if the offeree gives no consideration, the offeror may revoke the offer before acceptance.
• Case: Routledge v. Grant – Firm offer was revoked before the time expired; held valid due to lack of consideration.
• Ghanaian Law – Contract Act, 1960 (Act 25)
• Section 8(1): If an offer is stated to be open for a specified period, it cannot be revoked during that time just because the offeree provided no consideration.
• Overrides the common law position and protects firm offers. - Postal Rule – Acceptance vs. Revocation
• Acceptance:
• Under the postal rule, acceptance is effective upon posting, even if delayed or never received.
• Revocation:
• Postal rule does not apply to revocation.
• Revocation is only effective when it is received and brought to the notice of the offeree.
• Case: Byrne & Co. v. Leon Van Tienhoven
• Revocation posted before acceptance but received after acceptance was posted.
• Held: Revocation was ineffective; contract formed on posting of acceptance. - Third-Party Revocation
• Revocation can be validly communicated by a third party, provided it is reliable and reaches the offeree before acceptance.
• Case: Dickinson v. Dodds
• Offeree was informed by a third party of the offeror’s sale to another.
• Court applied an objective test: Was the third-party information reasonably reliable?
