Offer and Acceptance

Question 1

To make an offer, an offeror must make a what?

Answer 1

A clear and unequivocal statement that he will regard himself as legally bound to perform his promise if the other party accepts his offer.

Question 2

What is an offer?

Answer 2

A willingness to contract on certain terms, with the intention that it shall become binding as soon as it’s been accepted.

Question 3

What must an offer be?

Answer 3

unconditional, clear, unambiguous : Gibson v Manchester City Council / Storer v MCC

Question 4

What 3 things are not an offer?

Answer 4

Invitation to Treat
Supply of Information
Statement of Intention

Question 5

What is invitation to treat?

Answer 5

Not an offer but an invitation for others to make an offer to them.

Question 6

What is a bilateral offer?

Answer 6

Made to one person or a group and only they can accept. These require verbal or written acceptance.

Question 7

Give an example of a bilateral offer:

Answer 7

Gi bson v MCC

Question 8

What is a unilateral offer?

Answer 8

These are made to the ‘whole world’ or people generally seen in the cases of reward or other public advertisement.

Question 9

Give a case example of a unilateral offer:

Answer 9

Carlill v Carbolic Smoke Ball Co

Question 10

Give a case example of an invitation to treat, and explain it:

Answer 10

Fisher v Bell - The display was an invitation to treat not an offer, the offer is made when the customer presents the checkout operator the item.

Pharmaceutical Society of GB v Boots - The display of the drug was not an offer to the customer but an invitation to treat. The offer could be made when the customer brought the drug to the till and it was decided by the cashier if the offer was going to be accepted.

Question 11

What are advertisements of goods or services?

Answer 11

Generally advertisements can’t be offers and are considered an invitation to treat.

Question 12

What happened in Partridge v Crittenden?

Answer 12

The birds weren’t an offer to sell, it was an advertisement which meant an offer wasn’t made until the person who saw the advertisement made an offer.

Question 13

What does ‘Auction lots’ mean? What case was an example of offer and acceptance in auctions?

Answer 13

s.57 Sale of Goods Act 1979 states that an advert to hold an auction is an invitation to treat, not an offer -
British Car Auctions v Wright

Question 14

What is acceptance?

Answer 14

When the offeree accepts the offer unconditionally then the offer ends and a contract is formed.

Question 15

What is refusal of a contract?

Answer 15

If the offeree refuses the offer, then the offer ends.

Question 16

What is a counter-offer? Give a case example:

Answer 16

Once an offer is made, if the offeree replies to the offer by changing elements of the original offer, the offeree is making a counter offer. This then ends the original offer made by the offeror - Hyde v Wrench

Question 17

What happened in the case of Hyde v Wrench?

Answer 17

Wrench was selling land for £1000 and Hyde counter-offered with £950 which then ended the original offer.

Question 18

What is a request for further information? What case is an example of this?

Answer 18

This doesn’t terminate the offer and is not the same as a counter-offer, it is merely asking for more information about the offer before deciding whether to accept it or not - Stevenson v McLean

Question 19

What happened in the case of Stevenson v McLean?

Answer 19

The first telegram was merely an inquiry for information, not a counter-offer. While the defendant could have revoked his offer at any time on Monday, he failed to do so before the offer was accepted therefore a completed contract between the parties.

Question 20

What is lapse of time? Give a case example of this:

Answer 20

An offer can end if it was only open for a limited time or if too much time has passed between the offer and acceptance. If there is no end date for the offer it will lapse after a ‘reasonable’ amount of time - Ramsgate Hotel v Montefiore

Question 21

Does death end a offer? What case was an example of this?

Answer 21

Offers of a personal nature will end if the offeror dies - Bradbury v Morgan
If it is of a general nature then it doesn’t need to end as the offeror’s estate can honour it.

Question 22

What is revocation?

Answer 22

An offeror is a t liberty to withdraw their offer but the revocation must take place before it has been accepted.

Question 23

Routledge v Grant what issue is regarded in this case?

Answer 23

The offeree may think that they have a guaranteed time period to accept the offer (6 weeks) but even if the offeror has said they will keep it open for this long, they have the right to revoke the offer anytime before then as long as it hasn’t already been accepted.

Question 24

What is 3rd party revocation? What case is an example of this?

Answer 24

The offeror doesn’t have to be the one to revoke the offer, it can be communicated by a reliable third party - Dickinson v Dodds

Question 25

What legal principle came from Sheuy v US?

Answer 25

Revocation of a unilateral offer must be made in the same form as the offer was made e.g. in a newspaper.

Question 26

Hoe does acceptance take place?

Answer 26

Acceptance must be communicated in some positive way - this can be by words or by conduct.

Question 27

What is prescribed acceptance? What case gives an example of this?

Answer 27

Sometimes the offer states how the offeree must accept. This usually must be complied with for there to be valid acceptance - Yates v Pulleyn

Question 28

Can silence be acceptance? What case gives an example of this?

Answer 28

Silence will never be valid acceptance, there must be some positive act for acceptance - Felthous v Bindley

Question 29

What happened in the case of Felthouse v Bindley?

Answer 29

An uncle wrote to his nephew with an offer to buy a horse stating ‘ if i hear no more about him, i consider the horse to be mine’ the nephew didn’t reply but was going to sell his uncle the horse, but the auctioneer mistakenly sold the horse to a third party

Question 30

What is the postal rule?

Answer 30

Rule that were put in place so that if a letter is not delivered properly, then the rule decides where the loss should fall.

Question 31

When can the post be used for acceptance?

Answer 31

When the offer was made by post
The offeror specifies acceptance can be by post
Previous dealings between the two parties has been via post

Question 32

When can the post not be used for acceptance?

Answer 32

The offer was made in a more direct way
The offeree is aware there may be some delays by post

Question 33

What case was the postal rule set out in? Explain the details of the case:

Answer 33

Adams v Lindsell - The defendants wrote to the plaintiffs on the 2nd September offering to sell them some wool and requested that the plaintiffs reply ‘ in course of post’ .The letter of acceptance was posted before the third party had accepted the offer, but the letter hadn’t arrived to the defendants. The court held that the offer had been accepted before the sale to the third party

Question 34

What happened in the case of Household Fire Ins v Grant?

Answer 34

There was a valid contract between the parties for the shares. The postal rule was affirmed and even though the letter never reached Mr Grant, Lord Justice stated that posting acceptance creates a ‘meeting of minds’ which created a binding contract.

Question 35

When does acceptance take place through phone calls?

Answer 35

Because phone calls are instantaneous, the acceptance will take place when received… heard or in the case of an answer machine message, when heard.

Question 36

What was held in the case of Entores Ltd v Miles Far East Corp?

Answer 36

The postal rule doesn’t apply for instantaneous methods of communication. Since telex was a form of instant messaging, the normal postal rule of acceptance wouldn’t apply and instead, acceptance would be when the message by telex was received.

Question 37

When will the postal rule not apply? Give a case:

Answer 37

When the offeror has states that it will not apply: Holwell v Hughes - postal rule didn’t apply as the offeror has asked for notice in writing and therefore the offeror clearly expects acceptance in writing in front of him

Question 38

What does non-instantaneous and instantaneous mean and what is an example?

Answer 38

Non-instantaneous - not immediate (post)
instantaneous - immediate (phone)

Question 39

How would the acceptance by emails and test messages work as a new form of communication? Give a case example:

Answer 39

It is reasonable to suggest that emails and text messages would be treated the same way as phone calls; that acceptance is when communicated rather than when sent: Brinkibon v Stahag

Question 40

How does the role of machines work with offer an acceptance? Give a case example:

Answer 40

Lord Dennings stated that if the terms of the offer are contained in the notice placed on or near the machine stating what is offered for the money, then customer would be bound by those terms as he is made aware of them expressly or by implication: Thornton v Shoe Lane Parking Co

Question 41

What is the battle of the form in offer an acceptance?

Answer 41

When there is a business to business dealing with both businesses using their own Standard Forms, which contain the terms that are advantageous to their party

Question 42

What happens during the battle of the forms?

Answer 42

One business makes an offer in its standard of forms, and the other business then accepts on its own standard form. the results of this may be an entirely contradictory situation

Question 43

In court, when dealing with battle of the forms, which terms should be taken as being actual contractual ones?

Answer 43

The terms should be the ones of the offeror, as those were the ones last accepted by the offeree. The offeror made the offer so didn’t make an acceptance to their terms

Question 44

Give a case example that shows the battle of the forms:

Answer 44

British Road Services v Arthur Crutchley
Butler Machine Tool Co Ltd v Ex-Cell-O Corp Ltd
TRW Ltd v Panasonic Industry Europe Gmbh

Question 45

What was the situation in 2021regarding ‘battle of the forms’ and the ‘last shot’ rule?

Answer 45

While the ‘last shot’ usually wins the contractual ‘battle of the forms’ to determine which parties standard terms govern the contract concluded, in TRW v Panasonic, the court of appeal held that exceptionally, the seller ‘first shot’ had won the battle by creating an overarching ‘master’ agreement governing all subsequent purchases by the buyer