Offer and Acceptance

Question 1

Definition of a Contract

Answer 1

a legally enforceable agreement involving one or more promises.

Question 2

What is an offer?

Answer 2

an expression of a willingness (by offeror) to be legally bound…on a given set of terms…effective as soon as the person to whom the offer is made accepts.

Question 3

What is a bilateral contract?

Answer 3

They are contracts where there is an outstanding obligation on either side

Question 4

What is a unilateral contract?

Answer 4

A contract where only one party has an obligation from the outset
ex: Missing cat reward, no obligation to accept, only to pay

Question 5

What was held in Gibson v Manchester City Council?

Answer 5

terms such as “may be prepared to sell” does not amount to an offer as there was no concluded contract due to the language.

Question 6

What was held in Carlill v Carbolic Smoke Ball?

Answer 6

was a unilateral offer as there was an obligation only on the offeror so was a contractual offer not a ‘mere puff’

Question 7

Advertisements case

Answer 7

Partridge v Crittenden - advertisement not an offer it is an invitation to treat

Question 8

Goods in a shop window case x2

Answer 8

Fisher v Bell - invitation to treat not an offer
Pharmaceutical Society of GB v Boots - display of goods on a shelf are invitation to treat, an offer is made when the customer goes to the checkout and acceptance happens by the cashier taking the payment

Question 9

Request for information case

Answer 9

Harvey v Facey - this is an invitation to treat and expressed no intention to be bound

Question 10

What was held in Clifton v Palumbo?

Answer 10

No offer, as the use of the word ‘offer’ does not necessarily indicate intention to make an offer

Question 11

What are the four methods of ending a contract?

Answer 11

-Revocation
-Rejection
-Lapse of time
-Death/Expiry

Question 12

What was held in Stevenson v McLean?

Answer 12

C’s letter asking about delivery was not a counteroffer just a request for information,
so offer remained open and was validly accepted by another
the offer can only be accepted while it is open

Question 13

Describe Rejection + case

Answer 13

Hyde v Wrench
once an offer has been rejected it cannot be accepted by the person wanting to accept the offer
counteroffer kills the original offer

Question 14

Describe Revocation + cases

Answer 14

Bryne - must be communicated to the offeree and cannot be withdrawn without warning
Routledge v Grant - offers can be revoked at any time before acceptance is communicated
Dickinson v Dodds - if offeror does something that makes it clear that the offer is no longer on the table then the offer is deemed to be revoked (can also come from a reliable third party)

Question 15

Describe lapse of time + cases

Answer 15

Ramsgate v Montefiore - if a fixed period is stated then the offer will end after that time

Question 16

What is acceptance? + case

Answer 16

-Mirror the offer (respond and match the offer) (Tinn v Hoffman)
-Not change the terms of the offer
-Be communicated back properly to the offeror in an appropriate manner

Question 17

3 ways of accepting an offer?

Answer 17

-Acceptance by conduct
-Acceptance by post
-Electronic methods of Communication

Question 18

What is acceptance by conduct + case

Answer 18

Brogden v Metropolitan - performing the contract without any objections was enough so the offer had been accepted

Question 19

Describe acceptance by silence + case

Answer 19

Felthouse v Bindley - Offer cannot be accepted by silence and receiving no response it does not generate a contract

Question 20

What was held in the case of Butler v Ex-cell?

Answer 20

The court found that the buyer’s order was not an acceptance of the initial offer from the seller but a counter-offer which the sellers had accepted by returning the signature section of the buyer’s letter.

Question 21

Describe the postal rule + cases

Answer 21

-Adams v Lindsell - acceptance is effective as soon as its placed in the post, If they withdraw after acceptance is posted, then it will be ineffective even if acceptance arrives late.
-Household v Grant - if the letter is not delivered this does not affect the validity of the acceptance

Question 22

Exceptions to the postal rule + cases

Answer 22

-Holwell Securities v Hughes - this rule can be expressly or impliedly stated by the language of the offer eg “by notice in writing”
-Henthorn v Fraser - only takes effect where it would be the normal way of working between the parties

Question 23

Describe electronic methods of communication + cases

Answer 23

-Brinkibon - out of hours communication from the offeree are only accepted once the office is reopened. The courts will adopt the Sound Business Practice Rule.
-Entores v Miles - offeror must hear the acceptance (text, email)
-Thomas v BPE solicitors - Message received but not immediately seen – message received when it is accessible, provided it arrives at a time when the recipient could reasonably be expected to check their messages

Question 24

Bilateral and Unilateral offers (criticism)

Answer 24

+The difference is clear as unilateral require simple agreement and bilateral requires a fulfilment of actions to accept the contract.
+The court justifies unilateral offers (Carlill) the court found a unilateral offer to compensate for the claimant, this was a public policy decision and achieved justice which shows that the law can be flexible and favour the claimant when it is seen as unfair.
-However, it may be harsh on the defendants and in need of reform because neither party may have seen it as a unilateral offer showing the law can be unrealistic as to always finding an offer.

Question 25

Advertisements, Display in shop window, Request for information (criticism)

Answer 25

-Word offer in shopping terms doesn’t mean offer it means invitation to treat, but this doesn’t stop the public believing that it is an offer. The public may not know the difference between advertising goods for sale at a specific price which is an invitation to treat and advertising a reward for a lost pet which is a unilateral offer.
-This makes the law unrealistic as it can lead to confusion and the same outcome isn’t always achieved.
+But if it was to be an offer than age restricted items would be a problem.
+Also, once the item is in the shopper’s basket then this could be acceptance and they could not change their mind, which shows the fairness in the law and if it was flexible may lead to problems.

Question 26

Ending a contract (criticism)

Answer 26

-Law is confusing as to when an offer comes to an end. It is not always clear when there is a request for information or a counteroffer, showing how the law can be inflexible.
-If the offer does not state a duration, then the term reasonable length of time is used. Thus is a subjective decision by the courts and can be seen as going against the freedom of contract principle, also leading to confusion and uncertainty.

Question 27

Acceptance (criticism)

Answer 27

-Even if discussions between the two parties seem to suggest a contract being formed and it is this point which is confusing and goes against the main principle of contract law – which is parties are free to form contracts in whatever manner they wish, which shows the inflexibilities in this doctrine of offer and acceptance.

Question 28

Postal Rule (criticism)

Answer 28

-A party may be in a contract without knowing it. Therefore, it can be difficult to know when revocation is still possible. This is harsh on the offeror and does not reflect the fairness and justness concept that all the contracts should try to uphold, suggesting this isn’t realistic.
+Exceptions help this perceived harshness -Rules are outdated and not in tune with the speed expected of modern business communications
-Rules for offer and acceptance are too formal and outdated and do not reflect current business practices. This shows how the law is unrealistic and will not give a just outcome, as this way of acceptance is outdated.

Question 29

Electronic Methods of Communication (criticism)

Answer 29

+Mostly clear
-Confusion arises as there is difficulty about the revocation happening via email as it could be sent around the same time the acceptance email is being sent – especially if the offeror doesn’t read the acceptance email before sending the revocation, showing how the law possesses to be unrealistic and can be unclear at times.
-It may not be clear to the offeree when the other party has received and seen the acceptance.
-The sound business practice rule can lead to subjective decisions by the judge and may lead to a lack of clarity in the law.

Question 30

Reform

Answer 30

-Rules on offer can be vague when communicating electronically so a reform could be to use specific EU regulation on formation using electronic means.
-Rules on revocation of a unilateral contract can be vague so a reform could be legislation to identify and clarify the rules on revocation of a unilateral contract making it more realistic too.
-The postal rule could be abolished unless it has been explicitly adopted by the parties.
-Standardised business hours could be adopted by the courts for communications sent out of hours, and these would apply unless the parties have expressly or impliedly excluded them.
-The rules for communication could be codified which would give greater clarity for businesses and parliament could adopt the draft principles of European Contract Law which would help to standardise UK contract law with that in other countries.