Offer & Acceptance Flashcards
The general rule is that acceptance must be communicated. Which type of contract does this not apply to? Why?
Unilateral contracts
To accept a unilateral offer, you simply have to perform the act asked of you. This does not require communication
What does the mirror image rule state?
- The acceptance of an offer must be a mirror image of the offer
- This means the acceptance must be made in the same way as the offer was given
- If the acceptance is not exactly the same as the offer, it is not an acceptance at all. Instead, it is a counteroffer
An offer can be terminated in 7 ways. Name them
- Rejection
- Lapse of specified time
- Counter-offer
- Failure of a pre-conditon
- Resonable time passed
- Revocation
- Death
What does the postal rule state?
- The postal rule states that when posting a letter of acceptance, it is effective from the moment of posting, even if it never reaches the offeror
- It only applies to letters of acceptance
Why was the postal rule created?
It was argued there was a lapse of time between when letters were sent and when they were received. It covers the lapse of time if the letter gets lost
When can the postal rule be excluded?
- The postal rule can be excluded if the offerer states that the offer is only effective upon receipt of an acceptance
- The postal rule does not apply to incorrectly addressed letters
Weeks v Tybald [1605]
Facts: A man said he would give his daughter’s suitor £100 to marry her
Held: This was not a contract because the language is too ambiguous. What classes as a suitor? It was an invitation to treat
Confetti Records v Warner Music [2003]
Facts: A company sought to use a copyrighted track and this was agreed subject to contract. The copyright owners changed their minds and said the song was not to be used in the meantime. It was used
Held: There was no contract due to the “subject to contract” clause
In what 3 ways can an offer be made?
- Orally
- In writing
- By conduct
Who can an offer be made to?
- An individual
- A group
- The world
What must an offer be in order to be valid?
- Clear
- Precise
- Capable of acceptance as it stands
Harvey v Facey [1893]
Facts: A prospective buyer asked a seller “will you sell… Telegraph lowest price”. Seller telegraphed lowest price, and buyer said “we agree to buy for…”
Held: This was a statement of price, not an offer
Partridge v Crittenden [1968]
Facts: Crittenden was charged for offering to sell a protected species of birds by way of an advertisement
Held: This was not an offer to sell, but rather an invitation to treat
Fisher v Bell [1961]
Facts: Bell displayed a flick knife with a price tag in his shop window. This was an offence under the Restriction of Offensive Weapons Act 1959
Held: This was an invitation to treat, not an offer to sell
Pharmaceutical Society of GB v Boots Cash Chemists [1953]
Facts: Boots had opened self-service stores. Under the Pharmacy and Poisons Act 1933 certain goods had to be ‘sold’ under the supervision of a registered pharmacist
Held: Goods on shelf are NOT ‘offers to sell’ but simply ‘inviting’ customers to take them to till to make an ‘offer to buy’
Clifton v Palumbo [1944]
Facts: A property seller wrote to a potential buyer I am prepared to offer you… my estate for…” The seller later decided against this
Held: The statement of preparation was not an offer, but rather an invitation to treat
British Car Auctions v Wright [1972]
Facts: A dealer was charged with offering to sell an unroadworthy car at an auction
Held: There was no offer to sell, just an offer to buy. It was an invitation to treat
Taylor v Laird [1856]
Facts: The captain of a ship gave up his position during a voyage and worked as a crewmate instead. He sought to claim wages for his work. The owner was not made aware of this
Held: He was not entitled to wages. The owner could not accept the offer to work as a crewmate so there was no contractual basis
Foley v Classique Coaches [1934]
Facts: Foley sold part of his land to Classique Coaches on the condition that the company purchase all of their fuel from him. There was no agreed price. Classique complied with the terms of this agreement for three years until they stopped
Held: The agreement was not void. Classique had performed their agreement for several years so the contract could not simply be repudiated. The length of time implied the price was reasonable
Routledge v Grant [1828]
Facts: Grant made an offer to sell his house which should remain open for 6 weeks. He terminated the offer and withdrew it in writing. Routledge saught to accept the offer after its withdrawal
Held: The offer was validly withdrawn and was no longer open
Byrne v Van Teinhoven [1880]
Facts: Negotiations were made via post. D revoked the offer but C accepted before it arrived
Held: The revocation was not effective until it was received, so was not valid
Dickinson v Dodds [1876]
Facts: Dodds offered to sell his house and gave a deadline for acceptance. He sold the house before this deadline and asked a third party to inform Dickinson. Dickinson then saught to accept the offer seeking specific performance
Held: The offer had been validly revoked. No contract existed between the parties
Errington v Errington & Woods [1952]
Facts: A father purchased a house for his son and daughter-in-law to live in. He paid the deposit as a wedding gift and promised that if they paid the mortgage instalments, he would transfer the house to them. The father died. The mother inherited the house and the son went to live with her, but the wife didn’t so continued to pay the mortgage instalments. The mother brought an action to remove the wife from the house
Held: The father made a unilateral offer to the couple. The wife was performing an acceptance by meeting the mortgage payments
Ramsgate Victoria Hotel v Montefiore [1866]
Facts: M offered to purchase shares of the hotel. The hotel had accepted 6 months later when the shares had fallen
Held: There was no offer. It had lapsed after a reasonable time
Financings Ltd v Stimson [1962]
Facts: There was a hire purchase of a car where the agreement would not bind until the finance company accepted. The car was stolen and damaged before then
Held: There was a pre-condition that the car should remain undamaged before the offer. This failed so the offer lapsed
Hyde v Wrench [1840]
Facts: Negotiations took place regarding a sale. The potential buyer made a counter offer which was refused, then tried to accept the original offer
Held: A counter-offer destroys a previous offer, so the previous offer is no longer open for acceptance
Jones v Daniel [1894]
Facts: The defendant offered to sell his property to the claimant. The claimant wrote a letter accepting the offer, but this letter included additional terms that had not been included in the original offer
Held: There was not a contract because the acceptance contained additional terms, making it a counter-offer instead
Stevenson v Mclean [1880]
Facts: A merchant asked whether they could pay in instalments. The merchant accepted but the goods were already sold
Held: It was a request for information, so the original offer wasn’t cancelled
Heathcote Ball v Barry [2000]
Facts: Barry placed the highest bid on an item in auction which did not have a reserve. The auction house refused to sell the item
Held: Auctioning an item without reserve is a unilateral contract
Butler v Ex-Cell-O Co [1979]
Facts: Butler made an offer to sell with a condition all orders were accepted on the sellers terms which were to prevail over and terms & conditions in the buyers order. Ex-cell-O ordered the machine with new terms
Held: The offer to sell the machine on Butler’s terms was destroyed by the counter-offer. Butler signed the acknowledgement slip accepting those terms
Felthouse v Bindley [1863]
Facts: A nephew discussed buying a horse from his uncle. He offered to purchase the horse and said if I don’t hear from you by the weekend I will consider him mine. The horse was then sold by mistake at auction. The auctioneer had been asked not to sell the horse but had forgotten. The uncle commenced proceedings against the auctioneer for conversion
Held: The horse hadn’t been sold to the nephew as silence does not constitute an acceptance
What did Adams v Lindsell [1818] define?
A letter of acceptance is effective from the time of posting
Holwell Securities v Hughes [19174]
Facts: Dr Hughes granted Holwell Securities an option to purchase his house exercisable ‘by notice in writing’ within 6 months. Five days before the expiry, Holwell posted a letter exercising the option. This letter was never received by Hughes. Holwell sought to rely on the postal rule stating the acceptance took place before the expiry of the option
Held: By requiring ‘notice in writing’, the postal rule had been excluded
Household Fire Insurance v Grant [1879]
Facts: Grant applied for shares in a company and was allotted them. The contract was posted but he never received it. He never paid as a result. The company went bankrupt and Grant refused to pay his share
Held: There was a binding contract. The postal rule was applied
Entores v Miles Far East Co [1955]
Facts: A telex was sent outside of an office’s opening hours
Held: The postal rule does not apply to instantaneous methods of communication. The contract was valid when the office opened
When are acceptances via instantaneous forms of communication effective?
Upon receipt
