Offer and Acceptance

Question 1

What is a Contract?

Answer 1

A legally binding agreement between two or more parties.

Question 2

What are the 4 key ingredients in a Contract?

Answer 2

Offer, Acceptance, Consideration, Invitation to create legal relations.

Question 3

Explain the two types of Contracts

Answer 3

Unilateral Contract - One party has an obligation in the contract.
Bilateral Contract - Both parties have an obligation in the contract.

Question 4

What is an Offer?

Answer 4

The terms the person making the contract is willing to be bound by.

Question 5

What did Gibson v MCC establish?

Answer 5

An offer must be fully communicated, clear and certain.

Question 6

What is an Invitation To Treat?

Answer 6

The willingness to negotiate, you are inviting others to make the offer to you.

Question 7

What are the 3 types of ITT? (include cases)

Answer 7

Something On Display (Fisher v Bell)
Auction (BCA v Wright)
Adverts (Partridge V Crittenden)

Question 8

What is the ruling under Fisher v Bell?

Answer 8

Items on display are ITT’s. The customer makes the offer, and the shopkeeper can accept or decline.

Question 9

What is the ruling under BCA v Wright?

Answer 9

Auctions are ITT’s. Auctioneers make the ITT, and bidders make the offer.

Question 10

What is the ruling under Partridge v Crittenden? (3 conditions)

Answer 10

Adverts are ITT’s unless they apply to 1 of 3 conditions:
The wording makes it clear the advert was intended to be an offer
The advert is in a unilateral contract (Carlill v Carbolic Smokeball)
The advert was targeted towards a specific group of people

Question 11

What are the ways an offer can end? (Name them all)

Answer 11

Revocation
Rejection
Counter-offer
Lapse of Time
Death
Acceptance

Question 12

What is the ruling under Revocation?

Answer 12

In Dickinson v Dodds, it was decided the offer can be revoked at anytime, but this must be fully communicated (Even by a 3rd party)

Question 13

What is the ruling under Rejection?

Answer 13

In Stevenson v McClean, it was decided if an offer is rejected, it is extinguished. A rejection must be fully communicated.

Question 14

What is the ruling of a Counter-offer?

Answer 14

In Hyde V Wrench, it was decided Counter-offers reject the original offer, and then create a new one in it’s place. This must be fully communicated.

Question 15

What is the ruling under Lapse of Time?

Answer 15

In Ramsgate Victoria Hotel, it was decided that if no time is specified, the offer ends after a reasonable lapse of time. This is judged on a case by case basis.

Question 16

What is the ruling under Death? (Apply to both offeree and offeror)

Answer 16

When the offeree dies, the offer immediately ends
When the offeror dies, the offer remains until the offeree learns of their death.

Question 17

What is Acceptance?

Answer 17

An agreement to all the terms in an offer. Acceptance is valid as soon as it is communicated

Question 18

When is acceptance valid? (Include Cases)

Answer 18

Acceptance is valid in any form except silence (Felthouse v Bindley), but it must involve positive conduct (Carlill v Carbolic Smokeball)

Question 19

What are the types of communication?

Answer 19

Conduct, Verbal, Electronic, Post

Question 20

What is the Postal Rule?

Answer 20

A letter of acceptance takes affect at the moment of posting (Adam v Lindsell)

Question 21

When does the Postal Rule Apply?

Answer 21

It applies when:
Post is the expected method of communication between the parties.
The letter is correctly stamped and addressed.
The C can prove the letter has been posted.

Question 22

What is the Postal Side Rule?

Answer 22

You can avoid the postal rule by making it a term that acceptance will only take effect when it is communicated to them.

Question 23

What is the ruling of Electronic Communication?

Answer 23

Electronic Acceptance will take place when it is received rather than when it is sent (Entores v Miles Far East)

Question 24

What if the Communication is done in out-of-office hours?

Answer 24

It will be communicated to the company at the start of their next working day.