Offer and Acceptance

Question 1

Who is the offeror and who is the offeree?

Answer 1

The offeror is the person making the offer.
The offeree is the person who receives the offer.

Question 2

What must there be for a contract?

Answer 2

Agreement, consideration and intention for legal relations.

Question 3

What is an offer?

Answer 3

A clear and firm indication of terms to form an agreement.

Question 4

What is an invitation to treat?

Answer 4

An indication of what terms might be agreeable.

Question 5

What happened in Gibson v MCC?

Answer 5

The Council did not have to sell the house because their wording was not clear of firm, making it an invitation to treat not an offer. Gibson made the offer when he completed the application form but the Council did not have to accept this offer. They received an offer and chose not to accept it.

Question 6

Which case says that shop displays in windows are only invitations to treat?

Answer 6

Fisher v Bell

Question 7

Which case says that shop displays on shelves are only invitations to treat?

Answer 7

PSGB v Boots

Question 8

Which case says that written advertisements are only invitations to treat?

Answer 8

Partridge v Crittenden

Question 9

Which case had an advertisement that was so clear it amounted to an offer?

Answer 9

Carlill v Carbolic Smoke Ball Co. The advertisement was so clear about giving £100 to anyone who got the flu that it amounted to an offer (it was also a unilateral contract).

Question 10

What did the case of Harvey v Facey say?

Answer 10

Responses to requests for further information are not offers.

Question 11

What is a bilateral contract?

Answer 11

Two way obligation. Both parties are obliged to perform their side of the contract.

Question 12

What is a unilateral contract?

Answer 12

A one way obligation. Only one party needs to deliver on the contract but no other person is forced to perform the contract. Sometimes called ‘open offers’, ‘open contracts’ or ‘offers to the world’. For example, contests or rewards.

Question 13

How can an offer end?

Answer 13

Acceptance (turns the offer into an agreement)
Rejection (offer is ended if it is rejected)
Death of the offeror
Counter offer
Lapse of time
Withdrawal/ revocation

Question 14

How can death end an offer?

Answer 14

If the offeree knows the offeror has died, the offer dies with them. If the offeree doesn’t know the offeror has died, the offer is still capable of being accepted unless a personal service is involved.

Question 15

How does a counter offer end an offer?

Answer 15

If an offeree wants to accept the offer but change a term in it, this will be a counter offer. This ends the original offer and makes a new one so the original offer can’t be accepted unless both parties want to- Hyde v Wrench.

Question 16

How does a lapse of time end an offer?

Answer 16

If an offer will be open until a particular time, the offer will end when that time has passed. If no set time is given, an offer can end after lapse of a reasonable time depending on the circumstances- Ramsgate Hotel v Montefiore.

Question 17

How can a withdrawal/ revocation end an offer?

Answer 17

Offers can be revoked by the offeror as long as they have not been accepted. Routledge v Grant says revocation can be done even if an offer was meant to be open for a particular amount of time as long as the revocation was communicated and there had not already been an acceptance. Dickenson v Dodds says revocation can be made by a reliable third party.

Question 18

What does the offeree have to do for acceptance to be effective and why is this a good thing?

Answer 18

Communicate the acceptance with the offeror. The acceptance must mirror the exact terms of the offer. This means freedom of contract is respected because it would be unfair for the offeror to be legally bound without knowing about it.

Question 19

Which case says that the offeror can specify that acceptance be made in a particular way?

Answer 19

Yates v Pulleyn.
(If the offeror only suggests a mode of communication, then other methods can be used. If no method is specified, any reasonable form of communication can be used.)

Question 20

Which case says that silence or inactivity is not acceptance?

Answer 20

Felthouse v Bindley

Question 21

What is the exception to the rule in Felthouse v Bindley?

Answer 21

Carlill- Acceptance can be made through conduct if the terms of the contract were enough that performing the conduct would be acceptance. Usually with unilateral contracts.

Question 22

What does Adams v Lindsell say about acceptance by post?

Answer 22

Posting a letter of acceptance is effective when the letter is posted; it does not have to be received.
It only applies to acceptances, not offers or revocations. It also only applies if post is the usual/ expected means of communication, letters are correctly addressed and stamped and the offeree can prove the letter was posted.

Question 23

Which case says that offers and revocation by post are only effective once they have been received?

Answer 23

Byrne v Van Tienhoven

Question 24

What does the case of Holwell v Hughes say?

Answer 24

If a party requests notice in writing of an acceptance, the courts will probably interpret this as meaning the letter has to be received by the offeror before it is effective.

Question 25

What is positive about the postal rule?

Answer 25

Creates certainty because it gives a definite time of acceptance and won’t be changed if the letter is lost or delayed.

Question 26

What is negative about the postal rule?

Answer 26

Can be uncertain because there are no limits on when the rule is used, it goes against the usual rules of acceptance and the offeror can be in a contract without knowing about it if the letter is lost which goes against freedom of contract.

Question 27

What did the court decide about instantaneous forms of communication like email, text, social media?

Answer 27

Entores v Miles Far East Corp- instant messages must be received to be acceptance.

Question 28

What did the court say in relation to messages left during office hours?

Answer 28

Brinkibon- messages left during office hours are effective when they are left, even if they aren’t read or listened to.

Question 29

What did the court say in relation to messages left outside of office hours?

Answer 29

Brinkibon- disputes about out of office hours acceptances should be resolved by looking at the parties’ intentions and normal business practice. (e.g. if the parties have been communicating out of office hours in the past, acceptance can be in out of office hours. Otherwise, acceptance becomes effective once office hours resume).

Question 30

What does the rule in Brinkibon apply to?

Answer 30

Acceptances, offers and revocations (unlike the postal rule).

Question 31

What does Article 11 of the E-Commerce Regulations 2002 say?

Answer 31

The advertisement on the website is the invitation to treat
The placing of an order by the buyer is the offer
The seller will usually acknowledge the offer with an electronically generated email but this is usually not acceptance
The acceptance is usually another email from the seller stating that the goods have been dispatched