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Contract Law > Offer & Acceptance > Flashcards

Offer & Acceptance Flashcards

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1
Q

To make an offer, and offeror must make a what?

A
  • A clear and unequivocal statement that he will regard himself as legally bound to perform his promise if the other party accepts his offer.
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2
Q

What is not an offer? (3)

A
  • Invitation to Treat
  • Supply of Information
  • Statement of Intention
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3
Q

Invitation of Treat: Example?

A
  • Goods on a store shelf in not an offer, takes place at the till.
  • We can return it otherwise
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4
Q

Supply of Information: Example?

A
  • This is how much it is worth, if you make an offer, I may accept it.
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5
Q

Statement of Intention: Example?

A
  • Parties sometimes communicate that they intend to do something.
  • the communication is not intended to be binding
  • There is no offer
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6
Q

Goods on display in a shop are what kind of offer?

A
  • Not an Offer

- They are an invitation to treat

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7
Q

Are Advertisements offers?

A
  • Generally no

- Invitation to Treat

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8
Q

Advertisement case law? (1)

A

Partridge v Crittenden

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9
Q

Partridge v Crittenden (1968)

A
  • Hens and cocks for sale in advertisement
  • they were protected birds, making it illegal to offer to sell them
    Held:
  • Not guilty
  • It was not an offer
  • Invitation to treat
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10
Q

Is supplying information an offer?

A
  • No

- Supply of information

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11
Q

Is a Statement of Intention an offer?

A
  • No

- the communication is not intended to be binding, thus there is no offer

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12
Q

What is a Bilateral Contract?

A
  • They are contracts where there is an outstanding obligation on either side
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13
Q

What is a Unilateral Contract?

A
  • A contract where only one party has an obligation from the outset
  • ex: Missing cat reward, no obligation to accept, only to pay
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14
Q

Carlill v Carbolic Smoke Ball Co. (1893) (Issue)

A
  • Unilateral Contracts
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15
Q

Carlill v Carbolic Smoke Ball Co. (1893) (facts)

A
  • Carlill purchased a smoke ball to get rid of the flu
  • Carlill used it according to the directions
  • D offered a reward to anyone that was still sick after using it for so long (£100)
  • Carlill sought the reward
    Held:
  • It was a unilateral offer
  • Carlill fulfilled the terms and accepted it
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16
Q

Termination of an offer?

A
  • Unless acceptance happens, there is no contract
  • Acceptance must occur in order for the contract to be binding
  • Offer is still open if these do not happen
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17
Q

Methods of Terminating a Contract? (4)

A
  • Revocation
  • Rejection
  • Expiry
  • Lapse
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18
Q

Termination By Revocation?

A
  • Must be communicated to the Offeree or an intermediary
  • Offeree must actually receive the revocation
  • Cannot accept if revoked
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19
Q

What if the offeree is not aware of the revocation and accepts the offer?

A
  • revocation is no good
  • there is a binding contract
  • Offeree must actually receive the revocation
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20
Q

What if the offeree began the act of acceptance for a unilateral offer?

A
  • Cannot be revoked

- Once acceptance has started, cannot revoke the offer

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21
Q

Rejection?

A
  • Offer may be rejected by the offeree
  • Expressively or by counter-offer
  • If there is a condition in the offer that is not fulfilled, the offer terminates
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22
Q

How can an offeree reject an offer? (2)

A
  • Expressively

- Counter-offer

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23
Q

What happens if a condition in the offer is not fulfilled?

A
  • Offer terminates
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24
Q

Lapse & Death

A
  • Offer may lapse for want of acceptance

- Offeror dies, offer may lapse

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25
Q

Acceptance

A
  • Must be communicated
  • There is no contract until offer is accepted
  • Revocation cannot take place after offer is accepted
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26
Q

Exception to acceptance? (3)

A
  • Postal Acceptance Rule
  • Prescribed mode
  • Via Third Party
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27
Q

Acceptance in response?

A
  • Must be in response to the offer
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28
Q

Knowledge of Acceptance?

A
  • Knowledge of the offer is required

- Not sufficient that the wishes of the parties simply coincide through accident

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29
Q

Communication of acceptance?

A
  • Acceptance must be communicated to the offeror

- Offer cannot be accepted by silence

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30
Q

Exception to the need for communication?

case?

A
  • Where the offeror has waived the requirement for communication
  • Carlill v Carbolic Smoke Ball Co.
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31
Q

Postal Acceptance Rule?

A
  • Acceptance by post takes effect where and when letter is posted (Dispatch Rule)
  • Exception to rule that acceptance must be communicated
  • Risk of rule falls on offeror
  • Only applies if reasonable for offer to be accepted by post
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32
Q

Telegraph Acceptance Rule

A
  • Where it is reasonable to use telegraph

- Acceptance takes place when the acceptance is handed to the person authorised to take telegraphs

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33
Q

Telexes and telephones?

A
  • Postal rule does not apply to these
  • They are a form a instantaneous communication
  • Not an exception
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34
Q

Electronic Contract Formation?

A
  • General Contractual principles will be applied to issues raised by electronic correspondence
35
Q

Prescribed Method of Acceptance

A
  • an offeror may prescribe that acceptance is made in a certain way
  • Offeree must accept via the prescribed method if the offeror clearly states that he will only be bound if the prescribed method is followed
36
Q

Brogden v Metropolitan Railway Co. (Issue Topic)

A

Communication of Acceptance

37
Q

Brogden v Metropolitan Railway Co. (Facts)

A
  • Railway and Coal
  • Agent did not sign the contract
  • Had issues, referred to contract to resolve them
    -Sued and said there was no contract
    Held:
  • Contract was enforceable because they behaved as so
  • Can accept through behviour
38
Q

Brogden v Metropolitan Railway Co. (Principle)

A

Can accept a contract through behaviour

39
Q

Gibbons v Proctor (Facts)

A
  • Police officer unknowingly fulfilled a reward
    Held:
  • Court allowed officer to collect the reward
  • Exception to the rule
  • Must have knowledge of the offer to accept it
40
Q

Gibson v Manchester City Council (Issue Topic)

A

Invitation to treat

41
Q

Gibson v Manchester City Council (Facts)

A
  • Selling Council house
  • Council “may” be prepared to sell the house
  • Is it an offer?
    Held:
    -No
  • Not capable of being accepted
42
Q

Harris v Nickerson (Facts)

A
  • Said there was an auction that was selling office furniture
  • Did not actually sell the office furniture
    Held:
  • There was no offer
  • Statement of Intention
43
Q

Harvey v Facey (Issue Topic)

A

Supply of Information

44
Q

Harvey v Facey (Facts)

A

-Told Pen is around £900
- H agreed to buy it
- F argued that it was not an offer, he was only stating that he was willing to sell at
Held:
-It was not an offer
- It was a Supply of Information

45
Q

Partridge v Crittenden (Issue Topic)

A

Advertisement

Invitation to treat

46
Q

Pharmaceutical Society v Boots (Issue Topic)

A

Goods on Display

Acceptance

47
Q

Pharmaceutical Society v Boots (Facts)

A
  • Self Service Shop
  • when does acceptance take place?
    Held:
  • Offer is accepted when item is swiped and placed in bag
48
Q

Storer v Manchester City Council (Issue Topic)

A

Offer & Acceptance

49
Q

Storer v Manchester City Council (Facts)

A
  • S wanted to buy a council house
  • Signed the agreement and returned it to the council
  • Gov’t changed before the council signed it
  • New gov’t did not want to sign it
    Held:
  • S did everything he could to bind himself
  • Gov’t was bound to sell
50
Q

Thornton v Shoe Lane Parking (Facts)

A
  • Parking Facility
  • Does the offer occur when ticket machine was ready for payment or when money goes in?
    Held:
  • Acceptance was made when money was inserted
51
Q

Harris v Nickerson (Issue Topic)

A

Statement of Intention

52
Q

Intention to Create Legal Relations?

A
  • Agreements will not be enforced unless the parties intended to create contractual relations
53
Q

Balfour v Balfour (1919) (facts)

A
  • Came with wife to England
  • He left, she stayed
  • He gave her money to stay
  • They got divorced
  • Does he have to continue to pay her the £?
    Held:
  • No
  • Agreements made while still spouses are generally not enforceable
  • Family Members
54
Q

Are Social/Domestic Arrangements Binding?

A
  • Agreement entered into in domestic context
  • Presumption is that the parties did not intend to create legal relations
  • Generally, no
55
Q

Jones v Padavattan (1969) (Principle)

A
  • Agreements in domestic situations are typically non binding
56
Q

Jones v Padavattan (1969) (facts)

A
  • Mother to pay maintenance
  • They fought
  • J sued her own daughter
  • Is there a binding contract?
    Held:
  • No
  • Not sufficient evidence
57
Q

Parker v Clark (1960) (Principle)

A
  • Agreements entered into in domestic situations can be binding if the agreement is contractual in nature
58
Q

Parker v Clark (1960) (Facts)

A
  • P to live with C to take care of them
  • Agreed to give house to P when die
  • C changed will
  • Was the agreement binding?
    Held:
  • Yes
  • Agreement was contractual in nature
59
Q

Intention and Reasonable Expectation

test?

A
  • Test is objective

- If reasonable person concludes that there is an intention to contract, than person making promise would be bound

60
Q

Commercial Agreements? Binding?

A
  • General assumption that there is an intention to create legal relations
61
Q

Kleinwort Benson Ltd v Malaysia Mining Corp. Bhd (1989) (Facts)

A
  • M subsidiary approached K for a loan
  • K gave loan, wanted guarantee from M
  • M said they won’t guarantee, but it is part of their public policy to repay loans
  • M wrote a letter of comfort (not an agreement)
  • M took the loan
  • M did not pay K back
    Held:
  • No legal effect
  • Comfort letter is not a guarantee
62
Q

Kleinwort Benson Ltd v Malaysia Mining Corp. Bhd (1989) (Issue Topic)

A
  • Commercial Agreements
63
Q

What is Certainty?

A

o In order to constitute a valid contract, the parties must express themselves that their meaning can be determined with a reasonable degree of certainty

  • Must be reasonably clear
  • They both meant the same thing
64
Q

Cases regarding Certainty? (3)

A

May & Butvcher v R (1945)

Hillas v Arcos (1932)

Foley v Classique Coaches (1934

65
Q

May & Butvcher v R (1945) Facts

A
  • Was there a contract in the case?
  • Price is important
  • They said they would agree upon a price in the future
  • Used tents
  • Did R have to sell the excess of tents to P?
  • Courts said no
  • Price was too vague, so not really a contract
66
Q

Hillas v Arcos (1932) Facts

A
  • Contract for sale of timber
  • Gave option to buy more timber in the following year
  • Because it gave the quantity, it was a valid contract
  • Is it reasonable to set a price/amount?
  • What is reasonable given the circumstances
67
Q

Foley v Classique Coaches (1934 Facts

A
  • Supply of Petrol
  • Price agreed by parties in writing and from time to time
  • Binding without a specific price?
  • Held: it was a binding agreement
  • Why different from other case?
  • Petrol price changes all the time. More flexible regarding price. Tents don’t change.
68
Q

Ambiguity, vagueness, incompleteness cases? (4)

A

Scrammell v. Ouston (1941)

Nicolene v Simmonds (1953)

Winn v Bull Chancery Division (1877)

Raffles v Wichelhaus (1864)

69
Q

Scrammell v. Ouston (1941) Facts

A
  • D agreed to buy a van from P
  • Place higher purchase terms
  • Was there a contract based on higher purchase terms?
  • Held: no, not specific enough
  • If no certainty, then there is nothing for the court ot interpret.
70
Q

Nicolene v Simmonds (1953) Facts

A
  • One term at the end. Very vague and leacked meaning
  • Argued that the quality of the product was poor
  • P argued that they have a contract
  • Held: removed problematic clause
  • Severance of the problematic term in the contract
  • Court wants to do the least intrusive thing in order for the contract to continue
71
Q

Winn v Bull Chancery Division (1877) Facts

A
  • Lease a dwelling house.
  • If agreement is “subject to contract”, need a contract in order for the agreement to be enforceable
  • Term sheet is not a contract
72
Q

Raffles v Wichelhaus (1864) Facts

A
  • Unusual
  • P was supposed to sell cotton to D
  • Supposed to arrive on a ship called the peerless
  • There were more then one ship called this
  • P was ready to sell, D didn’t want it anymore
  • D said that he meant the peerless that arrived at a later date
  • Should D be bound?
  • Held: no binding contract unless the parties agree to the same thing
  • Too ambiguous
73
Q

Are Agreements to agree enforceable?

A

Generally, No

Walford v Miles (1992)
Petromec Inc. v Petroleo Brasileiro SA Petrobas (2005)

74
Q

Walford v Miles (1992)

Facts

A
  • Sale of photo item
  • P said that D said they wouldn’t go elsewhere
  • D did go elsewhere
  • Is this enforceable?
  • Problem: cannot make a promise for an indefinite amount of time
  • Limited in duration
  • Not enforceable
75
Q

Petromec Inc. v Petroleo Brasileiro SA Petrobas (2005) Facts

A
  • Pruchase of oil production platform
  • Anticipated that it need to be upgraded
  • Discovered new oilfield
  • Had to make changes to contract
  • 4 parties
  • 2 parties had agreement to negotiate in good faith regarding upgrade
  • Is this enforceable? (Negotiate in good faith)
  • Common law: do what you said you would in the contract
  • It was an agreement to agree
  • Can’t prove “lack of good faith”
  • Loss was quantifiable
  • Was termination made in good faith
  • Judge: good faith is not justification to terminate a contract
  • Agreement was enforceable
  • If sophisticated parties, we make it difficult for them to get out of contracts that they get into
76
Q

Modern Approach to Agreements to to agree? (case)

A 
Bear Stearns Bank v Forum (2007)
•	P owed D money
•	D would sell titles to P 
•	Court: valid agreemen
•	Pagnan v Feed Products (1987)
•	Parties are masters to their own contractual state
•	Should know consequences
77
Q

Implied Terms case?

A

British Steel v Cleveland Bridge & Engineering

78
Q

British Steel v Cleveland Bridge & Engineering Facts

A

• Letter of intent to supply with nodes
• Negotiated terms of contract
• No contract agreed originally
• Quantum Marowit?
• The amount the goods that we have provided to
• Made a contract claim, if not, thy provided goods which have a value
• D said no, they are not paying. Counter sued because of delay
• Question
• Type of contract?
o Executory contract: if do x, I will do Y
o Not applicable in this case
o No if
o Still in state of negotiations
o By deliverying nodes, does not enforce contract
• Held: D had obligation to pay P the value of nodes.
• D couldn’t claim damages because there was no contract

79
Q

General rule of Performance?

2 cases

A

Once performance has begun, court will usually enforce the agreement

oFoley v Classique coaches
oSudbrook Trading Estate Ltd v Eggleton (1983)

80
Q

5 Requirements to enter into a contract?

A 
Offer
Acceptance
Intention
Certainty 
Consideration (if not, promissory estoppel)
81
Q

Butler Machine Tools case Facts

A

?

82
Q

Butler Machine Tools case Principle

A

?

83
Q

New Zealand Shipping Co case Facts

A

?

Contract Law (12 decks)

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