Offer and Acceptance

Question 1

To form a contract there must be what?

Answer 1

To form a contract, there must be a valid offer and acceptance.

Question 2

What is an offer?

Answer 2

A proposal showing willingness to contract on form or definite terms.
- It comes into existence when it is communicated to the offeree, but they must know of its existence (Taylor v Laird).

Question 3

What is an ITT?

Answer 3

• An Invitation to treat (ITT) is an invitation to make an offer, and not an offer in itself.

Question 3

Describe advertisements:

Answer 3

Goods or services advertised in the media are an ITT (Partridge v Crittenden)
- An advert can be an offer if it clearly states that it is. This can be the case with ‘bilateral contracts’ (both are required to do something).
- An advert can be an offer where there is a unilateral contract (Carlil v Carbolic Smokeball).

• Goods in shop windows or on a shelf are an ITT (Fisher v Bell).
• A request for information and reply to the request is an ITT (Harvey v Facey).

Question 3

How can an offer end?

Answer 3

• Revocation (Routledge v Grant)
• Rejection which can be through a ‘counter offer’ (Hyde v Wrench)
• Lapse of time (Ramsgate Victoria Hotel)
• Death
• Acceptance

Question 4

Describe the basics of Acceptance.

Answer 4

Final and unconditional agreement to terms of an offer.
Acceptance takes place when acceptance is communicated to the offeror.

Question 5

How can A be communicated?

Answer 5

• Conduct
• By Post - Acceptance takes places when it is posted (Adams v Lindsell) if post is a reasonable method of Accepting.
  It doesn’t matter if a letter is lost in the post (HFI v Grant)
  If the offeror makes it clear that acceptance will ONLY occur when the offeror receives it, a postal acceptance will only take effect when it is actually received (Holwell Securities v Hughes).
• If it arrives out of office hours, acceptance is at the start of the next working day (Brinkibon).
• Acceptance cannot be made by silence (Felthouse v Bingley)
• If a mandatory method of acceptance is requested, it must be complied with (Yates v Pulleyn)

Question 6

What is a unilateral contract?

Answer 6

A unilateral contract is not an exchange of promises, but rather one party, the offeror, making a promise (usually to make payment) in exchange for a specified act by another party. The offeree enters into the contract and accepts the offer by the act.

Question 7

What is a bilateral contract?

Answer 7

A bilateral contract is an agreement between two parties whereby they each promise to perform an act in exchange for the other party’s act. E.g. one party offers to pay money and the other party offers to pass over ownership of an item; the sale of a car.

Question 8

Describe lapse of time:

Answer 8

A lapse of time may render an offer terminated. Some offers are time-limited and this time limit forms a condition of accepting the O (Ramsgate Victoria Hotel). However, where they are not time limited, they should remain open for a ‘reasonable time’.