OFFER

Question 1

What is an offer?

Answer 1

“An offer may be described as the indication by one person to another of his or her willingness to enter into a contract with that other person on certain terms” (Carter, Peden and Tolhurst)

Question 2

Gibson v Manchester Council - Issue

Answer 2

Whether Council’s letter to Mr. Gibson was their offer to sell the house and Gibson’s return of the application was his acceptance of the offer
OR Gibson’s return of application was his offer to buy, and no acceptance was made by the Council

Question 3

Gibson v Manchester City Council - principle

Answer 3

Letter not an offer to sell due to the ambiguity and vagueness of wording. Offer must be clear.

Question 4

What is a “mere puff”?

Answer 4

What companies and businesses say to attract business or interest but, which they do not intend to be binding. Generally advertisements, which use vague statements, not intended to be binding.

Question 5

Carlill v Carbolic Smoke Ball Company - issue

Answer 5

• Whether the advertisement was an offer or a “mere puff”
• Whether Carlill accepted the offer
• Could an offer be made to the world?

Question 6

Carlill v Carbolic Smoke Ball Company - principle

Answer 6

• Anyone who perform the conditions accepts the offer acceptance need not be notified in unilateral contracts
• Not puff due to specifics of offer

Question 7

Bilateral contract

Answer 7

2 parties to the contract

Both parties exchange a promise or set of promises for each to do something in the future

Question 8

Unilateral contracts

Answer 8

2 parties to the contract
Only 1 promise is made
Acceptance occurs through performance, usually involves some kind of reward

Question 9

Ticket cases General Rule

Answer 9

Ticket is the offer which the client can accept or reject after she or he has had reasonable opportunity to accept of reject
Acceptance occurs by retention without rejection in ticket cases

Question 10

MacRobertson Miller Airline Services v Commissioner of State Taxation

Answer 10

Issue- Whether an airline ticket was an agreement or memorandum of agreement for taxation purposes
Example of illusory offer
Ticket not a memoranda of agreement, but the terms of an offer

Question 11

Offers distinguished from Invitation to Treats

Answer 11

An invitation to treat is a communication by one person inviting another to make an offer or enter into negotiations relating to a potential agreement.
Not an offer because lacks sufficient indication of willingness to be bound
Involves advertisements, goods displayed in shops, auction, invitations to tender, goods offered for sale online

Question 12

Pharmaceutical Society of Great Britain v Boots Cash Chemists - issue

Answer 12

Whether the contract is formed when an item is placed in a customer’s basket, or at the checkout

Question 13

Pharmaceutical Society of Great Britain v Boots Cash Chemists - principle

Answer 13

Goods in shop are invitation to treat, offer not accepted until there is acceptance of the price at the checkout

Question 14

Auctions - what is the offer?

Answer 14

Auction is the invitation to treat
Bid is the offer, not binding until the bid is accepted
No distinction between a sale by auction with or without reserve
Auctioneer accepts the offer on the final bid by the fall of the hammer

Question 15

AGC v McWhirter - Issue

Answer 15

Whether McWhiter’s bid for land at an auction had to be accepted by the auctioneer

Question 16

AGC v McWhirter - principle

Answer 16

No distinction between a sale by auction with or without reserve
Bidder no more than offeror, offers not binding until the auctioneer signifies their assent

Question 17

Tenders

General rule

Answer 17

Tender submitted for consideration is the offer and the call for tenders is an invitation to treat

Question 18

Exception- to the tender rule

Answer 18

sometimes the “call for tenders” may really be an offer, referred to as a “tender process contract”

Question 19

Hughes Aircraft Systems International v Airservices Australia - issue

Answer 19

Whether or not CAA evaluated both tenders in accordance with the stipulated evaluation criteria

Question 20

Hughes Aircraft Systems International v Airservices Australia - principle

Answer 20

Letter calling for tenders not an invitation to treat because it was a binding statement of the procedures to be followed and the criteria to be applied
CAA breached the Tender Process Contract, did not evaluate the tenders fairly

Question 21

Harvela Investments Ltf v Royal Trust Co of Canada - issue

Answer 21

Whether or not Sir Leonard’s referential bid is permissible

Question 22

Harvela Investments Ltf v Royal Trust Co of Canada - principle

Answer 22

Invitation to tender the offer because the vendor promised to accept the highest bid
Referential bids not permissible, one bidder would never be able to buy

Question 23

Electronic Transactions: Goods offered online

Answer 23

invitation to treat

Question 24

Electronic Transactions: If someone makes an error in the course of online transactions they can…?

Answer 24

withdraw the portion of the communication in which the error was made as soon as possible provided they have not received any material goods.

Question 25

Termination of an offer (5 ways)

Answer 25

1. Revocation or withdrawal of offer by offeror
2. Lapse of time: if no time prescribed after a reasonable time
3. Death of offeror
4. Failure of a condition/ change of circumstances
5. Rejection by offeree

Question 26

Revocation or withdrawal - when can/does it occur?

Answer 26

Can occur at any time before acceptance (even if the offeror promised to keep it open)
Withdrawal is effective when it reaches (communicated to) the offeree

Question 27

When can an offer not be withdrawn?

Answer 27

If consideration has been given by the promisee in return for the promise, the promise to keep the offer open is binding- (option contract)
If unilateral contract and performance (acceptance) has occurred
Where the offeror does not know that the offeree has begun performance
Commencing performance is offeree’s own risk, know that the offeror could revoke at any time
Notion of “commencement of performance of the act” of acceptance is problematical

Question 28

Goldsborough Mort & Co v Quinn - issue

Answer 28

Whether Quinn could revoke his offer for the purchase of land to Goldsborough given that Goldsborough had given him money

Question 29

Goldsborough Mort & Co v Quinn - principle

Answer 29

If there is consideration to keep the offer open, then the promise is binding and the offer cannot be revoked

Question 30

Mobil Oil v Wellcome Intl Pty Ltd - issue

Answer 30

Whether Mobil could withdraw their incentive scheme after 4 years, given that the franchises had already been participating in it
Could withdraw it as the offeror should not be bound to keep an offer open when they are not aware if the offeree will perform

Question 31

Mobil Oil v Wellcome Intl Pty Ltd - rule

Answer 31

No universal proposition that an offeror is not at liberty to revoke the offer once the offeree commences or embarks on performance of the sought act of acceptance

Question 32

When will an offer be revoked due to lapse of time?

Answer 32

Offer may be subject to specific period, and in that case will lapse at the end of that period
If no period of time specified contract will lapse after reasonable time- depends upon context

Question 33

Death of an offeror

General Rule

Answer 33

The death of the offeror will terminate the offer

but the offeree must know that the offeror has died, before acceptance has been communicated

Question 34

Exception to the general rule towards death of an offeror

Answer 34

Option contracts might still be enforced against the deceased estate, unless personal services of the deceased were required, or the intent of option was that it not be exercisable after death

Question 35

Fong v Cilli - rule

Answer 35

Vendor died before one of the purcashers signed, they had notice of the death therefore the offer lapsed
Offer could have still been accepted before the purchaser had notice of the death provided no personal services of the deceased were required

Question 36

Failure of condition and changed circumstances

Answer 36

• Offer may be subject to a stipulated or implied condition, which must be fulfilled before the offer can be accepted
• If the conditions are not satisfied any attempt by the offeree to accept the offer is futile, as the attempt to accept does not create a legally binding contract.
• Offer may be subject to a express or implied condition that may lapse upon the happening of a certain event
• When there is a substantial change of circumstances consider whether an offer lapses
• Depends on whether there was an implied condition that the offer would lapse in those circumstances

Question 37

Dysart Timbers Limited v Nielsen - issue

Answer 37

Whether Nielsen’s offer to settle could be revoked given that his leave application was successful, and Dysart tried to accept the settlement offer

Question 38

Dysart Timbers Limited v Nielsen - rule

Answer 38

Offer could be accepted, Nielsen did not provide that the offer would terminate if leave application decided
• An offer would lapse in circumstances not expressly provided for in the offer if they constituted a fundamental change in the circumstances on which the terms of the offer were based

Question 39

Rejection and Counter Offer

Answer 39

Once an offer has been a rejected it is no longer available for acceptance
A counter offer is treated as a rejection

Question 40

Inquiry v counter offer

Answer 40

A mere inquiry is distinguished from a counter offer and not a rejection ( e.g. “is there room for movement…” “would you consider…”)