Offer & Acceptance

Question 2

When is an agreement made?

Answer 2

• An agreement is made when one party accepts an offer made by the other party

Question 3

What is Consensus ad idem?

Answer 3

• Latin phrase meaning “meeting of the minds”
• When two of more parties full understand and agree on the same thing

Question 4

Martin Smith v Williams (1998)

Answer 4

• If the parties reach accord by means of offer and acceptance then they should be contractually bound

Question 5

New Zealand Shipping Co v Satterthwaite (1975)

Answer 5

• English law, having committed itself to a rather technical and schematic doctrine of contract in application, takes a practical approach, often at the cost of forcing the facts to fit uneasily into the marked slots of offer and acceptance

Question 6

Smith v Huges (1871)

Answer 6

• If whatever a mans real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to others party’s terms’

Question 7

What is an Offer?

Answer 7

• An offer is expression of willingness to contract on specified terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed

Question 8

What is an invitation to treat?

Answer 8

• A bilateral offer
• Statements which indicate the makers willingness to receive offers, they are not offers themselves
• A way to start negotiations with someone to propose a deal
• For ex: a store displaying products with tags (not an offer because the store would be legally obligated to sell the product to anyone who picks it up regardless fo pricing errors, stock availability, or the buyer’s suitability)

Question 9

What are advertisements considered?

Answer 9

• Invitations to treat
• If an ad were considered an offer, the seller could be overwhelmed with legal obligations to sell to everyone who responds

Question 10

What is a Bilateral offer?

Answer 10

• A promise in exchange for another promise

Question 11

Partridge v Crittenden (1968)

Answer 11

• An ad in a magazine offering bird for sale
• A bilateral offer

Question 12

What is a unilateral offer?

Answer 12

• An offer in exchange for a specific performance

Question 13

Carlill v Carbolic Smoke Ball Co (1893)

Answer 13

• An ad promising to pay £100 to anyone who used the smoke ball as directed and got sick
• Unilateral offer

Question 14

What were the 2 arguments made in Carlill v Carbolic Smoke Ball Co

Answer 14

1. No intention to create legal relations
2. Bound to contract to the whole world

Question 15

Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953)

Answer 15

• Concerned whether or not goods displayed on shelves in a self serve shop constitutes a legal offer or an invitation to treat
• The court ruled that the goods displayed on shelves is an invitation to treat and the contract is only completed at the point of sale

Question 16

Why goods in a self serve store considered an invitation to treat?

Answer 16

• Shopkeepers freedom of contract
• Practical implications for customer

Question 17

What is an Auction considered?

Answer 17

• An offer
• The contract is binding when the auctioneer accepts the bid (Sale of Goods Act 1979 section 57(2))

Question 18

Payne v Cave (1789)

Answer 18

• A bidder retracted his offer before it was accepted by the Auctioneer

Question 19

What is an Auction with a reserve?

Answer 19

• A bilateral contract governing the sale of the goods
• Bidders make a series of offers and the auctioneer accepts the highest offer above the reserve price
• A reserve price is a minimum price

Question 20

What are auctions without a reserve concerning bilateral contracts?

Answer 20

• Bilateral contract governing the sale of the goods
• Bidders make a series of offers and the auctioneer accepts the highest offer

Question 21

What are auctions without a reserve concerning collateral unilateral contracts?

Answer 21

• Auctioneer promises that the auction is without a reserve and that they will sell to the highest bidder
• If the auctioneer breaks the promise they are liable in damages to the highest bidder who suffers loss
• The highest bidder is not entitled to the property sold because the offer was not accepted by the auctioneer

Question 22

Barry v Davis (2000)

Question 23

What is a request for tender?

Answer 23

• A formal invitation issued by an organization seeking bids from suppliers or contractors to provide goods or services for a specific project

Question 24

Spencer v Harding (1870)

Answer 24

• Request for tenders is an invitation to treat

Question 25

Harvella Investments Ltd v Royal Trust Company of Canada (1984)

Answer 25

• Two rival companies want to get their hands on the shares
• Depends on the wording of the request for tenders

Question 26

What are automatic machines considered?

Answer 26

• The display of goods in a machine is not an invitation to treat but rather an offer to sell
• The offer is mad when the proprietor of the machine holds it out as being ready to receive the money
• Acceptance is made when the customer puts his money into the slot

Question 27

Thornton v Shoe Lane Parking (1971)

Question 28

National Car Parks Ltd v Revenue and Customs (2019)

Answer 28

• Claimant parked in a public parking
• Injured in the car park
• On the back of the ticket it explained that the car park owners were not liable for injuries
• The claimant had agreed to this notice when they put their money in the machine

Question 29

When is an exclusion clause effective?

Answer 29

• It must come to the attention of the other party before the contract is agreed upon

Question 30

What are goods displayed online considered?

Answer 30

• Invitations to treat
• Entering card details/ buying is the offer

Question 31

What is the formation of a contract with goods displayed online?

Answer 31

1. Display of goods online
2. Offer to buy
3. Confirmation email
4. Acceptance

Question 32

What is Acceptance?

Answer 32

• A final and unqualified expression of assent to the terms of an offer
• Turns an offer into a legally binding contract

Question 33

What is a counter-offer?

Answer 33

• A counter-offer will bring the original offer to an end, thus making it incapable of acceptance

Question 34

Hyde v Wrench (1840)

Answer 34

• Defendant offers to sell farm to claimant for £1000
• Claimant offered to pay £950
• Defendant rejected offer to pay £950
• Claimant purported to accept the defendants original offer to sell for £1000
• A contract did not come into play because the original offer was counter-offered destroying the original offer

Question 35

What is a request for further information?

Answer 35

• A request for further information will not affect the status of the original offer

Question 36

Stevenson Jacques & Co v McClean (1880)

Answer 36

• Defendant offered to sell 3,800 tons of iron to the claimant at 40 shillings per ton
• Claimant asked the defendant whether they would accept 40 shillings for delivery over 2 months, and if not asked what their longest time was
• Defendant did not answer and sold the iron to a third party
• The claimant purported to accept the offer

Question 37

What is the general rule for acceptance being communicated to the offeror?

Answer 37

• Acceptance not effective until it is received

Question 38

Felthouse v Bindley (1862)

Answer 38

• An uncle was buying a horse from his nephew
• The uncle stated that if he did not hear from the nephew he would assume that he could have the horse
• The horse was later sold in an auction
• The uncle sued the auctioneer
• The court held that the horse did not belong to the uncle because silence does not mean acceptance

Question 39

Brogden v Metropolitan Railway (1877)

Answer 39

• The Railway company chucked an offer from the claimant into a drawer
• The offer was ignored and therefore not accepted
• There was no meeting of the minds

Question 40

What is the prescribed method of acceptance?

Answer 40

• If you will only accept a specific method of acceptance then it needs to be made very clear stating that any other form will not be accepted

Question 41

Tinn v Hoffman & Co (1873)

Answer 41

• “By return of post” does not mean exclusively a reply by return of post… you may reply by telegram, or verbal message or by means… not later than a written letter and sent by return of post

Question 42

Manchester Diocesan Council of Education v Commercial & General Investments (1970)

Answer 42

• “Where the offeror has prescribed a particular method of acceptance but not in terms insisting that only acceptance in that mode shall be binding, I am of the opinion that acceptance communicated to the offeror by any other mode which is no less advantageous to him, will conclude the contract”

Question 43

What is the Postal Rule?

Answer 43

• An exception to the rule
• The acceptance is accepted when the contract is posted, regardless of if the letter gets lost in the mail and never arrives

Question 44

Adams v Lindsell (1818)

Answer 44

• On Sept 2 the defendant wrote to the claimant offering to sell fleeces of wool
• The claimant received the letter on Sept 5
• The claimant posted their letter of Acceptance on Sept 5
• The defendant received the letter of acceptance on Sept 9
• The defendant had sold the wool to a third part on Sept 7

Question 45

Household Fire Insurance Company v Grant (1879)

Answer 45

• Grant applied to purchase shares in the Household Fire Insurance Company.
• The company sent a letter of acceptance to Grant by post, but the letter never reached him.
• When the company later went bankrupt, it attempted to recover the amount owed on the shares from Grant.
• Grant argued that he was not a shareholder because he never received the acceptance, meaning the contract was not validly formed
• The Court of Appeal held that a contract was formed when the letter of acceptance was posted, even though it never reached Grant

Question 46

What are the 4 limits of the Postal Rule?

Answer 46

1. Where it is unreasonable to use the post as a means of communicating acceptance
2. Where to use the post as a means of communicating acceptance would be absurd (For ex. postal strike)
3. Where the letter is not correctly addressed or stamped
4. Where the offeror has stipulated that acceptance will only occur when they have receipt of the acceptance

Question 47

Howell Securities v Hughes (1974)

Answer 47

• Howell Securities claimed Hughes agreed to pay commission for services rendered in facilitating investments.
• Hughes argued there was no enforceable agreement as the contract was not in writing, as required by law for certain financial dealings
• The court held that the agreement between Howell Securities and Hughes did not meet the formalities required by law and was therefore unenforceable
• Make sure this info is correct (watch lecture idk)

Question 48

Does the Postal Rule apply to other forms of communication?

Answer 48

• No the postal rule does not apply for instantaneous forms of communication
• For contracts made using instantaneous communication (e.g., telex, telephone), the contract is complete when the acceptance is received by the offeror, not when it is sent.

Question 49

Entores v Miles Far Eastern (1955)

Answer 49

• Entores sent Miles Far Eastern a telex (a form of instantaneous communication) offering to buy goods from Miles Far Eastern Corporation
• The telex communication was sent from London to Amsterdam, and acceptance was communicated via telex from Amsterdam back to London.
• A dispute arose, and the location of the contract’s formation became important for determining the applicable law.
• The Court of Appeal held that the contract was formed where the acceptance was received—in this case, in London.

Question 50

The Brimnes (1975)

Answer 50

• The charterers of The Brimnes sent a telex message to the shipowners on April 2, 1970, terminating the charter agreement due to alleged breaches.
• The shipowners claimed they did not read the telex message until the following day, April 3, 1970, and argued the termination was invalid because it had not been “received” on April 2.
• The court held that the telex message was effective when it arrived at the recipient’s telex machine during business hours, even if the recipient did not read it until later.
• The critical point was that the message was available to be read during office hours.

Question 51

Brinkibon Ltd (1983)

Answer 51

• Brinkibon Ltd wanted to buy steel from Stahag Stahl, a company based in Austria.
• The contract was negotiated and finalized through telex communication.
• The acceptance of the offer was sent from Austria to the English company in England.
• Brinkibon later sought to sue Stahag Stahl for breach of contract in the English courts.
• The issue arose as to where the contract had been formed, which would determine the proper jurisdiction for the case: England or Austria.

Question 52

What is the acceptance in a unilateral contract?

Answer 52

• Requirement of communication is waived
• All that is required is communication of performance
• Acceptance is the performance
• You cannot accept an offer unless you have knowledge of it at the time you preform

Question 53

R v Clarke (1972)

Answer 53

• The Government of Western Australia offered a reward for information leading to the arrest and conviction of certain criminals involved in the murder of two police officers.
• Clarke, who was initially a suspect in the crime, provided information that ultimately led to the conviction of the murderers.
• Later, Clarke claimed the reward, but the government refused, arguing that Clarke was not entitled to it because he had not provided the information with the intention of claiming the reward.
• The court held that Clarke was not entitled to the reward.
• For acceptance of a unilateral contract, the offeree must act in reliance on the offer.

Question 54

Gibbons v Proctor (1891)

Answer 54

• A policeman went to hand over evidence for a case
• While sitting in the waiting room he noticed an advert for a reward
• He had knowledge of the reward before the information made it to the superintendent
• The offer was contemporaneous in his mind

Question 55

Williams v Cawardine (1833)

Answer 55

• Evidence provided at a murder trial was false because the plaintiff lied to protect her husband
• Her husband then later attacked her and she came forward with the truth and was rewarded
• The offeree’s motive is irrelevant

Question 56

When does acceptance occur in a unilateral offer?

Answer 56

• Acceptance occurs when the performance is complete, and as soon as the performance begins the offer can no longer be revoked

Question 57

Errington v Errington (1952)

Answer 57

• A father bought a house for his son and daughter-in-law, intending it as their home.
• The purchase was partly financed by a mortgage, and the father promised the couple that the house would become theirs if they paid off the mortgage.
• The couple moved in and started paying off the mortgage in installments.
• After the father died, the property fell into the father’s estate, administered by his widow.
• The Court of Appeal ruled in favor of the couple.

Question 58

What is the general rule for revocation of an offer?

Answer 58

• offeror can revoke their offer at any point before acceptance
• Does not need to be communicated by the offeror himself (can be communicated by a trusted third party)
• Postal rule does not apply to letters of revocation

Question 59

Dickinson v Dodds (1876)

Answer 59

• Dodds offered to sell property to Dickinson for £800, and the offer stated it would remain open until 9 a.m. on Friday, June 12.
• However, before Dickinson accepted the offer, Dodds sold the property to a third party, Mr. Allan.
• Dickinson learned of this sale through a third party on June 11 but still attempted to accept the original offer before the deadline.

Question 60

Byrne v van Tienhoven (1888)

Answer 60

• The case involves an offer of sale for goods.
• Van Tienhoven, who was based in Cardiff, Wales, sent a letter on October 1 to Byrne in New York, offering to sell tin plates at a certain price.
• On October 8, Byrne sent an acceptance letter, but before that acceptance could be received, Van Tienhoven sent a letter on October 5, revoking the original offer.
• Byrne received the revocation after sending his acceptance on October 8, but before receiving it, Byrne had already mailed the acceptance.
• The court ruled in favor of Byrne, stating that the revocation was not effective until it had been received by Byrne

Question 61

What is the stance of revocation for unilateral contracts?

Answer 61

• The same notoriety is given to the revocation as was given to the original offer
• The revocation will be accepted even if it was not read

Question 62

Shuey v US (1875)

Answer 62

• In this case, the United States government had offered a reward for information leading to the capture of certain criminals.
• The offer was publicized in newspapers and was considered a unilateral contract, meaning that it would be accepted by performance (providing information).
• Shuey, the claimant, had provided the information and sought the reward.
• However, the government had revoked the offer by publishing a notice of revocation in the newspaper before Shuey could claim the reward.
• The Supreme Court ruled that the revocation was valid because it was made in the same manner as the original offer through a public notice in the newspaper.