Offer & Acceptance Flashcards
Definition of Offer
What is Clark’s definition?
A clear and unambiguous statement of the terms on which offeror is willing to contract
Definition of Offer
Dooley v Egan [1938]:
A quote for the sale of a cabinet state ‘for immediate acceptance only’ was deemed a valid offer. Must be clear, unambiguous and final.
Offer v ITT - Ads
Partridge v Crittenden [1968]
A magazine advertised “bramble finches for 25 shillings each”. Illegal to sell wildlife at the time.
However, the court held this was not an offer, just an invitation to treat and thus not illegal.
Offer v ITT - Ads
Leonard v PepsiCo [1999]
TV ad showed items you could get if you got a number of Pepsi points (T-shirts were 75 points)
A fighter jet appeared saying 7 million Pepsi points. The ad also ran with a catalogue which said if a consumer didn’t have enough points, once you have 15 you can buy more at 10c per point.
Teenager ordered the jet with 15 points and a cheque for $700k. Pepsi refused to supply.
Held ad wasn’t sufficiently definite to constitute an offer as it reserved the details of the offer to the catalogue. Even if the catalogue referred to the Jet, it wouldn’t be an offer as it had no words
of limitation like ‘first come-first served’. Clear from ad it wasn’t meant to be taken seriously.
Offer v ITT - Ads - Unilateral Offers
Carlill v Carbolic Smoke Ball Co [1893]
CS advertised a “carbolic smoke ball” for sale in the papers and claimed it was so effective that they’d pay £100 to anyone who bought it and used as directed and got influenza
The ad stated they had deposited £1,000 in the bank as evidence of their sincerity.
C bought it, contracted it despite using it as directed. Sued claiming unilateral offer & owed £100
CS argued no acceptance. Held with a unilateral contract, performance constituted acceptance
CS argued no consideration. Held buying and using the product correctly was consideration.
Held as the def had deposited cash in bank this proved the ad was not mere sales puff but constituted an offer and thus the plaintiff was entitled to the £100.
Offer v ITT - Ads - Unilateral Offers
Browne v Iarnod Eireann [2013]
June, IE circulated notice inviting interest for vol redundancy. June: B sent email stating interest.
9 Aug: IE sent B an estimate figures but said they are ‘unable to guarantee the redundancy’
B happy to proceed. Then got letter entitled ‘Vol Sev Offer’ w ‘inability to guarantee’ removed
Communicated acceptance and signed in Sept. Held IE made unilateral offer + B validly accepted
Offer v ITT - Ads - Unilateral Offers
Billings v Arnott [1945]
A issued notice offering ½ salaries (up to £2 p/w) to any employees who joined the defence forces
B told A he intended to accept their offer. A said not possible as other employee from his dept already joined so they couldn’t spare him also. B joined anyways and then sued for half his salary.
Held the notice was clear and unconditional and thus went beyond a statement of intention – it was a unilateral offer and acceptance was completed when B signed up to the defence forces.
Offer v ITT - Ads - Unilateral Offers
Leftkowitz v Great Minneapolis Store [1957]
Put ad in newspaper offering to sell 3 furs worth $100 for $1, Sat 9am, first come first served.
G refused to sell a fur to L on the basis the ad was only intended for women.
Held the ad was sufficiently clear and definite and left nothing for negotiation, thus a valid offer
Offer v ITT - Display of Goods
Pharmaceutical Society of GB v Boots Chemist [1953] UK
Pharmacy Act made selling certain pharmaceutical products in the absence of a qualified chemist illegal. Boots stocked its open shelves w drugs listed as poisons in the Act.
Held the display here merely constituted an ITT; the offer to buy the goods happened when the buyer brought the goods to the cashier where they could accept or reject in presence of a chemist.
Offer v ITT - Display of Goods
Fisher v Bell [1960] UK
B displayed flick knife in window. Charged w offence of offering an offensive weapon for sale.
Display held to be invitation to treat, not an offer; no offence committed
Offer v ITT - Display of Goods
Minister for Industry v Pimm [1966] IRE
Offence to offer goods on credit terms w/o clearly setting out the terms. P prosecuted for offering a coat in window w tag w price and ‘credit terms available’ on it. Merely invitation to treat.
Offer v ITT - Auctions
General rule?
Putting item up is an invitation to treat, bids constitute the offer. S.58(2) SGA 1893: a sale by auction is complete when the auctioneer announces its completion (normally by fall of the hammer).
Offer v ITT - Auctions
Harris v Nickerson [1873]
Auctioneer advertised furniture would be auctioned on a certain day. H sued for damages for loss of time when he travelled to the auction to find the furniture had been withdrawn for sale.
Rejected: this did not constitute an offer.
Offer v ITT - Auctions
What is the without reserve exception?
This may change the invitation to treat into a unilateral offer to sell to the highest bidder
Offer v ITT - Auctions - Without Reserve
Warlow v Harrison [1859]
Auction was stated to be without reserve. W bid 60 guineas for a mare. The owner bid 61.
W discovered identity & refused to bid more. When W tried to claim the mare, the owner refused.
Held bc it was w/o reserve the highest bona fide bidder can sue auctioneer for breach of contract.
If owner caused the auctioneer to be in breach, then auctioneer can claim indemnity from owner
Note: McDermott says this is unsatisfactory. P should be able to sue owner directly.
Offer v ITT - Auctions - Without Reserve
Tully v Irish Land Commission [1961]:
Kenny J confirmed that by starting a without reserve auction, the auctioneer is making a unilateral offer to all bidders there and will sell to highest bona fide bidder.
Offer v ITT - Tenders
General rule and Spencer v Harding [1870]
General Rule: Invitation to treat. Tenders are like written auctions.
H invited tenders for the purchase of stock. Highest bidder’s bid (S) declined, so S sued.
Held the invitation did not amount to an offer, thus no obligation to accept the highest bid.
Offer v ITT - Tenders - Stipulating Acceptance of Highest/Lowest Bid
Harvela Investments v Royal Trust of Canada [1985]
R invited bids to purchase shares and offered to accept the highest bid. Bid came in lower than H but added a referential clause: they would pay $101k more than any higher submitted. Accepted.
Held H bona fide highest bidder: It was an implied term that referential bids are excluded.
Offer v ITT - Tenders - Stipulating Acceptance of Highest/Lowest Bid
Howberry Lane v Telecom Éireann [1999] Different in Ireland
TE invited bids for Cablelinks. H made de facto highest bid, but 3rd def made referential bid of 15% more than the highest bid. TE requested new bids, 3rd def won after making highest bid
H argued 3rd defs first referential bid was invalid and also the second round of bidding was improper, and even if it was proper, 3rd def should have been excluded.
Rejected Harvela: Held the tendering docs contained an express term that the seller reserved the right to sell to any person and that it was under no obligation to accept the highest bid, or any.
Offer v ITT - Privilege Clauses
General rule?
Permits owner to accept or reject any bid in its discretion. Referential bids can only be made to tenders expressly permitting them.
Offer v ITT - Privilege Clauses
Smart Telecoms v RTE [2006]
RTE stated it was seeking a sponsor for weather forecasts and that it would accept the best offer in the form of a sealed bid, clearly stating the offer was to be a figure incl agency commission.
S made bid saying ‘a sum equal to 5% above highest bid’. Was this a valid response to the offer?
Held no: RTE’s offer required parties to submit their best offer clearly outlining the price.
Approved Harvela to the effect referential bids will only be valid where expressly permitted.
Offer v ITT - Quotations
Harvey v Facey [1893]
H telegraphed ‘will you sell us Bumper Hall Pen? Tele back the lowest cash price’. F sent back £900. H indicated they’d pay that. F refused to sell, so H sued claiming a valid contract made. Rejected: merely indication of price they’d be willing to accept if they decide to sell
Offer v ITT - Lotteries
Carroll v An Post National Lottery [1996]:
Held the lotto playslip constitutes an offer by An Post: it offers to sell lotto tickets to members of the public who complete the slips in acc with the rules. The offer is accepted when a person completes the slip and gives it to the Lotto agent w the money for it
Termination of an Offer
What four ways can an offer be terminated?
(i) Revocation (ii) Rejection (iii) Delay/Lapse of time (iv) Death
Termination of an Offer - Revocation
What is this?
The offeror has withdrawn the offer. Can be done any time before accepted. Unless there is a separate enforceable contract (supported by consideration) to the effect that the offer will remain open until a certain date, the offeree has no cause of action if revoked before this date
Termination of an Offer - Communicating Revocation
Dickinson v Dodds [1876]
Def offered to sell property to P for £800 and stated the offer would be open until 9am Fri 12 June
On Thursday, P was told by a third party the property was sold to someone else.
P knew this, and handed in their letter of acceptance on Thursday, then sued for breach of contract
Held reasonably communicated and was valid even though only heard from third party, not def.
Note: this imposes a responsibility on the offeree to determine whether the source is reliable.
Termination of an Offer - Revoking Unilateral Offers
Errington v Errington [1952]
Dad made agreement w son and son’s wife that he’d pay 1/3 of purchase price of a house in cash if they paid the balance of the mortgage. He’d then convey the house to them once the final instalment was paid. He died, leaving the house to his widow who sought possession of the house.
Held that revocation of the offer wasn’t possible once they began performance (paying installs)
Termination of an Offer - Revoking Unilateral Offers
Byrne v Tienhoven [1880]:
Revocation by post is only effective once the letter is received.
Termination of an Offer - Rejection
Hyde v Wrench [1840]
W offered to sell property to H for £1k. But H replied by indicating he’d only pay £950. W refused to sell for 950, H then tried to accept first offer. Held offer terminated by counter-offer
Termination of an Offer - Rejection
Stevenson, Jacques & Co v McLean [1880]
Telegram sent in response to offer as to whether delivery might take place over 4 months.
Held to constitute a mere inquiry and not a rejection or counter-offer.
Termination of an Offer - Delay or Lapse of Time
Parkgrange Invesments v Shandon Park [1991]:
Carroll J held that a purchaser who ignores a time limit for accepting an offer runs the risk that the offer will lapse
Termination of an Offer - Delay or Lapse of Time
Commane v Walsh [1983]
Where no express deadline, acceptance must take place within a reasonable time.
What is a reasonable time depends on each case, and where there is a pre-existing contractual relationship bw parties, what is ‘reasonable’ is likely to be more lenient than first time contractors
Termination of an Offer - Delay or Lapse of Time
Ramsgate Victoria Hotel v Montefiore [1860]
M applied to buy shares in Rs company in June. Heard nothing until Nov when he was told shares had been allotted to him and he was required to pay the balance owed.
Held his refusal was justified on basis his offer wasn’t accepted within a reasonable time period.
Given the volatile nature of share prices, June to November was considered excessive.
Termination of an Offer - Death of Offeror
What happens if the offeror dies before and after the acceptance?
After acceptance Case-by-case basis, but generally two options:
The contract is capable of being performed from the estate of the deceased.
The death of one of the parties has the effect of frustrating the contract.
Before acceptance Usually revokes an offer. However, if the offeree is unaware it may be different
Termination of an Offer - Death of Offeror
Coulhart v Clementson [1879]:
Notice of death to the offeree constitutes revocation of the offer.
Termination of an Offer - Death of Offeror
Re Whelan [1897]:
A continuing guarantee was not automatically terminated by the death of the guarantor and only ended when the offeree became aware of the death. Depends on contract’s nature.
Termination of an Offer - Death of Offeree
Re Irvine [1928]
Father received an offer to buy some of his land. Went some of the way towards acceptance, but died a few hours later. Before he died, he asked his son to post acceptance to the buyer’s solicitor.
Held since, in accordance w the postal rule, acceptance by post takes place when the letter is posted, acceptance was not complete when the father died.
Friel: “An offer is made on the assumption that it is to living people and is not made to dead people”
Acceptance
What is acceptance and what two components are necessary?
Acceptance: A response to offer that completes a contract & a final and unequivocal expression of agr to the terms. two parts to acceptance: (1) Fact of Acceptance and (2) Communication of Acceptance
Acceptance - Fact of Acceptance
Parkgrange Investments v Shandon Park Mills [1991]
This is the act of and intention behind accepting. Acceptance is invalid without intention to accept.
Seller didn’t sign with intention of accepting the offer but to get a capital gains tax certificate in case the sale didn’t go ahead. Also did not communicate acceptance to the offeror
Fact of Acceptance - Express Acceptance
Hyde v Wrench [1840]:
Acceptance is accepting the terms of the offer without varying them. Attempts to vary: counter-offer
Made counter-offer rendered the original offer incapable of acceptance.
Fact of Acceptance - Express Acceptance
Swan v Miller:
Offer to sell for £4750, offer to buy for £4450. Held a counter-offer, not acceptance.
Fact of Acceptance - Battle of the Forms
Background?
Commercial firms normally have standards forms upon which they conclude their contracts. Sometimes it’s difficult to establish whether acceptance has occurred or a counter-offer was made.
Fact of Acceptance - Battle of the Forms
Butler Machine Tool Co v Ex-Cell-O Corp [1979]
Sellers made offer to sell tool at £75k on a standard form that included a price variation clause.
Buyers responded by placing an order on their own order form which didn’t contain such a clause.
S didn’t object: returned part of B’s form acknowledging the contract took place but on S’ terms
Held for buyers: the seller’s original communication was an offer to which the buyer responded with a counter-offer. S returned the slip, accepting the offer and making the slip the terms.
Importance: Not analysed by offer and acceptance – analysed each communication. Contrast with:
Fact of Acceptance - Battle of the Forms
Chichester Joinery v Mowlem [1987]
C have a quote incorporating its own standard T&Cs. These T&Cs were countermanded by a purchase order from M which incorporated its own T&Cs.
In turn, C sent acknowledgment of order based on their (Cs) T&Cs and proceeded to delivery the joinery which M thus accepted on delivery. Held to be an acceptance on those (Cs) terms.
Importance: Even where forms don’t correspond, acceptance can be inferred from conduct.
Fact of Acceptance - Battle of the Forms
Trentham Ltd v Archital [1993]
T was main contractor in building contract. Entered into contract w subcontractors (A) who installed doors under the main contract. Work was completed and paid for.
T became liable to penalties under main contract and wanted contribution from A under the sub-contract. A denied a contract existed bw A and T. Held contract existed based on T’s terms.
The fact a contract is performed and paid for is of importance and precludes argument of no intention to create legal relations. Can exist even w/o being analysed in O&A terms.
Fact of Acceptance - Implied Acceptance (Through Conduct)
Brodgen v Metropolitan Railway Co [1877]
B was delivering coal to M for years. M decided to put the agreement on a formal footing and sent a written contract to B setting out the terms of the contract. B made changes, signed, returned
M never signed but B proceeded to deliver on the contract terms (his) and M accepted the coal.
Held M accepting the coal was tacit acceptance of Bs terms.
Fact of Acceptance - Implied Acceptance (Through Conduct)
Anglia Television v Clayton [1989]:
Need two factors: (1) Clear and unambiguous offer and (2) Subsequent conduct by way of acceptance applicable exclusively to the offer.
Fact of Acceptance - Implied Acceptance (Through Conduct)
Western Electric Ltd v Welsh Development Agency [1983]
WE were made an offer re occupation of a premises. Didn’t respond and accept, but began performing under the terms of the offer by going into occupation of the premises.
Held by occupying the premises WE was offering to contract on the terms of WD’s earlier letter.
Note: This may be a one off as it is irreconcilable with the rule allowing an offeree to decline/accept.
Fact of Acceptance - Silence as Acceptance
Felthouse v Bindley [1862]
Uncle wrote to nephew offering to buy a horse at a fixed sum. Letter said “if I hear no more about him, I’ll consider the horse mine at that price”. Auctioneer for nephew mistakenly sold the horse.
Uncle sued auctioneer claiming a contract existed. Court rejected: silence insufficient acceptance
Fact of Acceptance - Silence as Acceptance
Russell and Baird v Hoban [1922]
R sent sale note to H in post offering to sell oatmeal. Note indicated if there was no response in 3 days, it would be deemed acceptance. Held no: no man can impose such conditions upon another.
Fact of Acceptance - Silence as Acceptance
Sale of Goods and Supply of Services Act 1980, s.47
Concerns unsolicited goods being sent to someone without their consent/request. Two options:
If seller doesn’t seek return within 6 months and receiver doesn’t prevent him, the recipient can treat them as an unconditional gift.
Recipient can send written notice stating they’ve 30 days to take them back. If sender
fails to get them, they are an unconditional gift.
Fact of Acceptance - Silence as Acceptance - Exceptions
Re Selectmove Ltd [1985]:
Both parties expressly agree silence will constitute acceptance.
Parties both agreed that silence would constitute acceptance.
Fact of Acceptance - Silence as Acceptance - Exceptions
Rust v Abbey Life Assurance [1979]
As a result of previous business dealings, there is a legitimate expectation that silence will constitute acceptance
Fact of Acceptance - Silence as Acceptance - Exceptions
Western Electric Ltd [1983]
Silence will not constitute acceptance where the contract in question involves a service which, by nature, cannot be returned once given:
Fact of Acceptance - Acceptance in Ignorance of an Offer
Tansey v College of Occupational Therapists [1995]
P was enrolled in a prep course for Cs Diploma exams. C published a manual providing exam details and that two re-sits were permitted. A year after T joined the course, C change it to one.
A page with this update was in some, but not all of the manuals handed out the year T enrolled.
T failed twice: claimed C had a contractual relationship w here and she was entitled to more resits
Held while an exam board could make a unilateral offer, T was not aware of any offer re exam re-
sits when she enrolled. The manual only amounted to provision of info, not terms of a contract.
Communication of Acceptance - Mode of Communication Stipulated by Offeror
Walker v Glass [1979]
If he requires it by email, post won’t suffice. Only suffice if it’s an equally effective method.
G offered to sell property for £400k. Specified acceptance to be done using form attached to offer
Also specified the form had to be delivered to his solicitors with a deposit before 13 March.
W signed the acceptance and rang G’s solicitors on 2 March to inform. G withdrew offer that day.
Held revocation was valid as it took place before an effective acceptance of the offer took place.
Communication of Acceptance - Acceptance by Telephone, Telex etc.
Entores v Miles Far East [1955]
An acceptance is effective once it has been received by the offeror:
E sent offer via telex from London to M’s Amsterdam office. Where was acceptance received?
Held offer is only accepted when the offeror learns of or receives the acceptance. If acceptance is not received by the offeror (& not their fault) & the offeree is aware of this, then it’s not effective
Communication of Acceptance - Acceptance by Telephone, Telex etc.
Parkrange Investments v Shandon Park [1991]
Adopted the Entores rule in Ireland.
Communication of Acceptance - Acceptance by Telephone, Telex etc.
Brinkibon Ltd v Stahag [1983]
The Entores rule won’t give the most appropriate solution in cases where the telex is sent by/to an agent w limited authority or a telex arrives outside work hours. Must be resolved by reference to (i) parties’ intentions, (ii) sound business practice and (iii) a judgment as to where the risks lie.
Communication of Acceptance - Acceptance by Telephone, Telex etc.
Mondial Shipping v Astarte Shipping [1995]
Held where a telex was sent outside business hours, the sender can’t expect the recipient to have received the message until the open of business on the next working day.
Communication of Acceptance - Acceptance and Electronic Communications
The Electronic Commerce Act 2000
s.20 and 21 provide for the regulation of acknowledgement of receipt of electronic communications. However, they don’t resolve the issue of the postal rule as they use the words “when an email is sent” or “received” not offer or acceptance.
Communication of Acceptance - Acceptance and Electronic Communications
The EC Regulations 2003
provide that the order and acknowledgement of receipt are deemed to be received when the offeror is able to access them. But only applies to business contracts.
Communication of Acceptance - Acceptance and Electronic Communications
Postal Rule Proponents
Some argue the agreement is concluded once the acceptance is sent by email and does not matter when and where the offeror reads it, thus the postal rule applies.
They argue that email is technically not instantaneous as there is a lag between when the sender sends it and the receiver gets it while it goes through the server
Communication of Acceptance - Acceptance and Electronic Communications
Receipt Rule Proponents
Others argue the email only constitutes a valid acceptance once the offeror learns of it
They treat emails as instantaneous communication and thus Entores, Brinkibon and Mondial should apply i.e. acceptance takes place when the offeror learns of it (downloads the email).
Ultimately, the Q as to when a contract is concluded via electronic means is a question of fact.
Dickie argues the postal rule should not apply to emails. Cheshire prefers the telex rule
Exceptions to the rule that Acceptance must be Communicated - Unilateral Contracts
Carlill v Carbolic SC [1893]
As they’re accepted through performing an act, comm unnecessary
Exceptions to the rule that Acceptance must be Communicated - Postal Rule
Adams v Lindsell [1818]
L wrote to A with offer to sell wool on 2 Sept 1817. Letter required postal acceptance.
As a result of L misdirecting the letter, A only got it on 5 Sept. A wrote letter of acceptance that did not arrived to L until 9 September. L expected reply by 7 Sept, so sold it on 8 Sept.
Court held the contract came into existence when the letter was posted
Exceptions to the rule that Acceptance must be Communicated - Postal Rule
Kelly v Cruise Catering [1994] Ireland
K employee on cruise ship going from Mexico to Texas. Employment contract sent from Oslo to
Dublin. He signed and posted it in Dub. Held acceptance complete when he posted it from Dub.
Exceptions to the Postal Rule - Prescribed Method of Acceptance
Holwell Securities v Hughes [1974]:
The contract provided that if HS wanted to exercise an option to buy a house owned by H, this would have to be done “by notice in writing” within 6 mths. HS sent letter in time but never arrived. As H had stipulated he needed to receive the letter, PR didn’t apply
Agreements Void for Uncertainty - Ambiguous Terms
What is an Ambiguous Term?
A term that can be interpreted in more than one way. The courts attempt to discern the true intentions of the parties, but where terms are so ambiguous, a court may decide there was no agreement reached
Agreements Void for Uncertainty - Ambiguous Terms
ESB v Newman [1933]
N agreed to discharge the accounts for electricity supplied to Mrs Waddington. MW had 4 premises. N claimed the term was only intended to cover one premises.
Court looked at true intentions: favoured the testimony of N: found he only intended one premises
Agreements Void for Uncertainty - Ambiguous Terms
Mackey v Wilde [1998]
Held an agreement re issuing of 25 annual fishing permits and ‘a few’ day tickets was too vague so held void. The number of day tickets to be made available was not sufficiently certain.
Agreements Void for Uncertainty - Ambiguous Terms - Commercial Agreements
Rooney v Byrne [1933]
A promise to buy a house ‘subject to getting an advance on the property’ held not to give the promisor a choice whether to apply for a loan or an advance.
Held he was obliged to make reasonable efforts to secure an advance on reasonable terms.
Agreements Void for Uncertainty - Ambiguous Terms - Parties not agreeing on Price
Black Country Housing Assoc v Shand [1998]
Held a term agreeing to set a ‘fair and reasonable price’ was enforceable as opposed to a situation
where they intended to set a price in the future. Future price is too uncertain, gives no indication.
Agreements Void for Uncertainty - Illusory Terms
Provincial Bank of Ireland v Donnell [1932]:
A guarantee to a bank re future loans to be advanced to another party was held void for uncertainty where BOI retained absolute discretion as to whether future loans would be granted.
Agreements Void for Uncertainty - Illusory Terms
O’Mullane v Riordan [1978]
O (purchaser) agreed to pay £1500 an acre or such greater price that could be varied by him.
Not illusory: it stated a min price & didn’t allow purchaser discretion as to whether he paid at all.
Agreements Void for Uncertainty - Incomplete/Concluded Agreements
Tolan v Connacht Gold Co-op [2016]:
Held a doc prepared and signed at the end of a meeting bw T and a rep of C did not constitute a binding agreement. Merely a note of what was discussed. On its face it may have been an agreement, but context: another meeting set to agree on outstanding issues.
Agreements Void for Uncertainty - Agreements to Negotiate
Triatic Ltd v Cork County Council [2006]
T & C negotiating re sale of land. If agreement reached, the sale goes to members of the CC for approval. T argued implied agreement that negs would continue til they’d reached an agreement.
Rejected on uncertainty: given the contract’s complexity, it’d be too diff to determine when they’d reached a formal agreement. T argued an implied duty on C to negotiate in good faith and not disengage until they had good reason. Rejected.
Agreements Void for Uncertainty - Agreements to Negotiate
Guardian of Kells v Smith [1917]
G advertised by tender for supply of meat. Ad said formal contract to be signed on a certain day.
S successful in his tender, but refused to sign the formal contract. Held liable on basis he’d entered into a valid contract to enter into a formal contract for the supply of meat.
