Offer Flashcards
What is the definition of an offer in contract law?
An offer is an expression of willingness to contract on specified terms, made with the intention that it is to become binding as soon as it is accepted by the person to whom it is addressed. Professor Trietel
What test do the courts apply when deciding whether someone intended to be bound by their offer?
The courts apply an objective test. If a reasonable person would believe that the alleged offeror implied by either his words or conduct that he intended to be bound this is sufficient for the offer to be valid in law.
Smith v. Hughes 1871
What is the difference between an offer and an invite to treat?
An invite to treat is an expression of willingness to consider offers for contract. Unlike an offer it does not need to be specific.
E.g. Harvey v. Facey 1893
Are goods on display an offer for sale or an invitation to treat?
Generally these are invites to treat.
Pharmaceutical society of Great Britain v. Boots cash chemist 1953
Fisher v. Bell 1967
Where goods or services are advertised does this constitute an offer or an invite to treat?
Generally an invite to treat
Partridge v. Crittenden 1968
Although where the advert was a unilateral contract it may be an offer
Carlisle v. Carbonic smoke ball company ltd 1893
What is the difference between a unilateral and a bilateral contract?
A bilateral contract involves a promise being made by each contracting party.
I.e. I promise to give you my car and you promise to give me £5000.
A unilateral contract only involves a promise on one side in return for a particular action. For example offers of reward in return for information.
The agreement in these contracts is the completion of the required action, and therefore the advert/ notice is the offer
What is the difference between a unilateral and a bilateral contract?
A bilateral contract involves a promise being made by each contracting party.
I.e. I promise to give you my car and you promise to give me £5000.
A unilateral contract only involves a promise on one side in return for a particular action. For example offers of reward in return for information.
The agreement in these contracts is the completion of the required action, and therefore the advert/ notice is the offer
Routledge v. Grant 1828
The defendant offered to buy the claimants house for a set price. He told the claimant they had 6 weeks to give a definitive answer.
Within that 6 weeks the defendant change his mind and withdrew his offer. The claimant took action stating the offer should have been kept open for 6 weeks as agreed.
The courts found for the defendant, it is not possible for one party to be bound without the other.
The exception to this rule is if a party gives some form of consideration to keep the offer open for a certain period - e.g. Mountfort v. Scott 1975
When is a sale by auction complete?
According to s.57(2) of the Sale of Goods Act 1979 a sale is completed at auction at the fall of the auctioneers hammer.
When an auctioneer calls for bids this is an invite to treat, an offer is then made when the bid is made. Bids can be withdrawn at any time prior to acceptance.
Most auctions will have a reserve price set on them (s.57(3) sales of goods act 1979). This means that unless an item hits a certain price it cannot be sold.
British car auction v. Wright 1972
Are invitations for tenders offers or invitations to treat?
Generally they are invitations to treat, this allows people to gain a number of quotes for work without being bound by any of them.
Spencer v. Harding 1870
How may an offer be terminated?
- Revocation : Routledge v. Grant 1828
- Rejection by the offeree.Hyde v. Wrench 1846
- Lapse of time : Ramsgate Victoria hotel co ltd v. Montefiore
- Failure to comply with a condition: Financing ltd v. Stimson 1962
- Death of one of the parties.
Does an offer need to be communicated to be valid?
Yes, this applies to both unilateral and bilateral contracts.
Inland revenue v. Fry 2001
How is a bilateral contract revoked?
- It must be communicated. Byrne v. Van Tienhoven 1880
2. Can be communicated by a reliable 3rd party. Dickinson v. Dodds 1876
Can a unilateral offer be revoked?
Yes.
To revoke a unilateral offer the offeror must take reasonable steps to notify those likely to accept the original offer. E.g. If the offer was made in a local newspaper the revocation should be of a similar size and in the same newspaper.
When can an offer be terminated due to lapse of time?
If an offer contains an express condition that states it will lapse after a specified time then any acceptance after that time will not be valid. Ramsgate Victoria hotel v. Monte
