OFFER AND ACCEPTANCE Flashcards
What are the four parts to a contract?
- offer
- acceptance
- intention to create legal relations
- consideration
Define offer
- an expression of willingness to contract
- on certain terms
- made with intention that it should be binding
- as soon as it is accepted by person to whom it’s addressed
What are the requirements for an offer?
- willingness to be bound
- sufficient certainty in the terms of the proposal ie certainty of terms
Stevenson Jacques v McLean
- if offeree makes inquiry about offer, this is not acceptance it is simply an enquiry and it is also not a counter offer
- then original offer stands
Outline the difference between domestic agreements and commercial agreements regarding intention to create legal relations.
1) domestic agreements
- Balfour v Balfour
- there can be intention to create legal reactions amongst family members
- however presumption is that there is no intention
2) commercial agreement
- Edwards v Skyways
- strong intention that agreement intends to be legally binding
Hyde v Wrench
- a counter offer always destroys prior offer which can no longer be accepted
What is needed for acceptance?
- a standing offer
and - adequate communication via expression (a letter or newspaper ad) Entores ltd v Miles Far East Corp
Outline the postal rule
- is postal rule applies then acceptance stands on the day acceptance was posted
GIVEN: - it was reasonable to be posted
- addressed correctly
- stamped correctly
- is there is a time limit?
-Adams v Lindsell
What is consideration?
- something of value given in exchange for a promise (see unit 3)
- Curry v Misa
Difference between offer and invitation to treat?
Offer:
- needs to be definite promise which is bound by specified terms
Invitation to treat:
- ‘I am thinking to sell…’
- there is no such intention to be bound whereas there is in an offer
- goods displayed in shop window and inside shops are usually invitation to treat (Pharmaceutical Society of GB v Boots Cash Chemists)
- advertisements are usually invitation to treat (Partridge v Crittenden)
- advertisements of rewards are normally offers (Williams v Carwardine)
Difference between bilateral contract and unilateral contract?
Bilateral:
- where party makes a promise in return for a promise from other party
Unilateral contract
- a promise in return for an act
- ‘if’ contracts, —> if you do this I’ll do this…
- Williams v Carwardine
In auctions what is the a) invitation to treat b) offer c) acceptance?
a) the call for bids
b) the bids
c) fall of hammer (Sale of Goods Act)
What is the difference between with reserve and without reserve?
With reserve:
- the bid is an offer which the auctioneer may accept or reject (Sale of Goods Act 1979, s
57(2)).
- if the auctioneer accepts a bid then, as the auctioneer is acting as agent for the owner, a bilateral contract is formed between the owner and the bidder
- If the auctioneer refuses to accept a bid then there cannot be a contract between owner and bidder
Without reserve:
- the highest bidder may be able to
bring an action against the auctioneer.
- if an auction is advertised ‘without reserve’, there is an offer of a unilateral contract by the auctioneer (ie a promise to accept the highest bid) which is accepted by the highest
bidder
- if the auctioneer refuses to accept the bid, the highest bidder will have a claim in damages against the auctioneer (Barry v Davies) but will not have a claim against
the owner.
What are tenders?
- when businesses decide to outsource a function they will invite a number of contractors (eg cleaning companies) to submit written tenders (quotation for cost of doing work) for the job
- these requests for tenders are invitation to treat
- tenders themselves are offers
- it is then up to the person who requires the service to decide whether to accept any of the offers.
- Spencer v Harding where there was no unilateral contract because there was no specific wording such as and we undertake to sell to the highest bidder to make the circular a binding offer
- an invitation to tenders can sometimes create an offer of a unilateral contract
- Blackpool & Flyde Aero Club Ltd v Blackpool Council 1990
- D was obliged to consider all tenders submitted on time
An offer can be terminated in three different ways: revocation, rejection and lapse of time. Explain the ways in which all three work and state the authorities associated with the different rules.
1) revocation
- offeror can takes deal off table at any time before acceptance, even if they say they’ll leave it open for specific period of time Routledge v Grant
- an exception to this is if the offeree has given (or promised) something to the offeror in return for keeping the offer open (Mountford v Scott)
- MUST BE COMMUNICATED and cannot be done so through the post- Bryne & Co v Van Tienhoven & Co
- an offer made to the public at large may be revoked through the same channel as it was made, provided the revocation is given the same prominence (Shuey v United
States)
- if a notice of revocation is received (eg an email) but not read until the following day, the court will have to decide when communication takes place, and this will depend
on the reasonable expectation of the sender (The Brimnes)
- revocation may be communicated by a reliable third party (Dickinson v Dodds)
- in the case of offers of a unilateral contract, it is likely that the offeror cannot revoke once the offeree has started to perform the act of acceptance (Errington v Errington
and Woods)
2) rejection
- if offeree rejects the offer either expressly or by implication (eg by making a counter offer), the offer will terminate (Hyde v Wrench).
- a request for information will not have the effect of terminating an offer (Stevenson v McLean)
3) lapse of time
- the offeror may specify that the offer will stay open only for a particular time
- if not, the offer will terminate after a reasonable time
