Offer, Acceptance, Certainty & Intention Flashcards
What is an offer vs an invitation to treat?
- Offer: Expression of willingness to contract on specific terms and to be bound by it
- Invitation to treat: Expression of willingness to negotiate, not intended to be bound by it
What is acceptance?
The final expression of assent to the exact terms of an offer, acceptance & offer must coincide (meeting of the minds). Confirmed that there still needs to be offer and acceptance in Gibson v Manchester CC
What is the mirror image rule?
Original offer must not be changed or met with a counter offer, must be a meeting of minds
What is a bilateral contract vs a unilateral contract?
Unilateral contracts have a promise in exchange for the performance of an action. In contrast, bilateral contracts are reciprocal as both parties have to perform their parts of the action
Using cases, give examples of invitations to treat
- Goods on display (PSGB v Boots)
- Advertisements (Partridge v Crittenden) UNLESS they make a promise in relation to a product forming a unilateral contract (Carlill v Carbolic Smoke Ball)
- Merely stating a price (Gibson v MCC)
What is the position of the law in cases of tenders?
- General rule is that a tender is an invitation to negogiate but not an offer
- HOWEVER, per Blackpool & Fylde Aero Club v Blackpool BC, where tenders are solicited from select parties and prescribe a clear, orderly and familiar procedure, if the invitee submits a conforming tender before the deadline he is entitled that this be considered
- This can be inferred and implied from the circumstances which arise
What two things must acceptance be?
- Unconditional, there must be no attempt to change the offer
- Communicated, silence is not enough (Felthouse v Bindley)
What is the postal rule?
If acceptance is made by post, acceptance is effective once the letter is sent, NOT when it is received (Household Fire Insurance v Grant)
When will the postal rule not apply?
- Revocation of an offer (Byrne v Van Tienhoven)
- Instanenous methods of communication such as telex or email (Entores v Miles Far East Corp)
- Where the contract expressly excludes use of the postal rule (Holwell Securities v Hughes)
What is the rule if acceptance has been prescribed to a particular form?
- If the form of acceptance is mandatory then acceptance in a different form will not be effective
- However, if not mandatory and the method adopted is no less advantageous then it may be effective per Manchester Diocesan Council for Education v Commercial and General Investments
In what other ways can acceptance be done?
- By conduct (Brogden v Metropolitan Railway)
- Acceptance can occur without knowledge of the offer (Gibbons v Proctor)
What is meant by ‘Battle of the Forms’?
Butler Machines v Ex-Cello Corp, the last terms that are agreed upon without objection will form the contract, it does not matter who made the original offer, follows the mirror principle
What case shows proper termination of an offer?
- Byrne & Co v Van Tienhoven, revocation of an offer must be communicated before it is accepted
- Dickinson v Dodds, it did not matter that termination was communicated by a third party
What did Lord Denning say in Butler Machines v Ex-Cello Corp?
Lord Denning argued that the mirror approach was out of date and proposed looking at the correspondence of parties to determine whether an agreement was made
What is certainty?
- Terms of a contract must be clear, specific and unambigious so that both parties are aware of the obligation they are under
- British Steel Corp, letters of intent are not binding where negotiation for key terms is ongoing
- Walford v Miles, agreement to negogiate in good faith is not certain enough
What is the assumption in cases with an intention to create legal relations?
- Social & family agreements are often assumed to not have an intention to create legal relations (Balfour v Balfour)
- The opposite is presumed in a business setting (Esso Petroleum v Customs & Excise)
- RTS Flexible Systems, whether there is a intention to create legal relations is to be inferred objectively based on the expectations of reasonable honest businessmen
What does the case of Blue v Ashley show?
Language of an offer can be used without expressing a genuine willingness to be bound, assumed parties did not intend to be legally bound when made in social settings
