Offer and Acceptance

Question 1

Trentham (1993)

Answer 1

“the fact that the transaction was performed on both sides will often make it unrealistic to argue that there was no intention to enter into legal relations” Steyn LJ

Question 2

Treital’s definition of an offer

Answer 2

“An expression of willingness to contract on specified terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed”

Question 3

Gibson v Manchester CC (1979) HL

Answer 3

An example of an invitation to treat as they requested the fulfillment of an application form before an offer will be made.

Question 4

Bigg v Boyd Gibbons (1971) CA

Answer 4

“For a quick sale I would accept £26,000” is still a binding offer when accepted. An offer must be clear and unequivocal.

Question 5

Carlill v Carbolic Smoke Ball Co (1893)

Answer 5

A unilateral offer is made to all those who comply with the conditions before revocation. There is “automatic” revocation within a reasonable time.

Question 6

Spencer v Harding (1870)

Answer 6

The best offer does not have to be accepted.

Question 7

Harvela Investments v Royal Trust of Canada (1986) HL

Answer 7

One can bind themselves to accept the highest bid. Referential bids are not allowed.

Question 8

Blackpool & Flyde Aero Club v Blackpool BC (1990) CA

Answer 8

“No tender which is received after the last date and time specified shall be admitted for consideration”

Question 9

Harris v Nickerson (1873)

Answer 9

A reserve and auction is only an invitation to treat, even when characterized as an offer.

Question 10

Warlow v Harrison (1859)

Answer 10

There is no offer until the hammer strikes.

Question 11

Sale of Goods Act 1979, section 57(2)

Answer 11

“A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner; and until the announcement is made any bidder may retract his bid”

Question 12

Treital’s definition of acceptance

Answer 12

“A final and unqualified expression of assent to the terms of an offer”

Question 13

Tinn v Hoffman (1973) EC

Answer 13

“Cross offers are not acceptances of each other” per Blackburn J.
Furthermore, an acceptance with qualifications is a counter-offer.

Question 14

Hyde v Wrench (1840)

Answer 14

There is no legal obligation to sustain the original offer after a counter-offer has been made.

Question 15

Stevenson v McLean (1880)

Answer 15

Requesting more information is not a counter-offer.

Question 16

Butler Machine Tool v Ex-Cell-O-Corp (1979) CA

Answer 16

Lord Denning dissatisfied with orthodoxy; suggests looking through the documents of communication to establish whether they have reached an agreement on all material points.
Bridge and Lawton LJJ’s follow orthodox “last shot rule”.

Question 17

Brinkibon v Stahag Stahl (1983) HL

Answer 17

“The general rule… is that a contract is formed when acceptance of an offer is communicated by the offeree to the offeror” per Lord Wilberforce
There is no general rule for instantaneous communication but it generally must be received. It is important to consider intentions, normal business practice and by a judgement of where the risks should lie.

Question 18

Felthouse v Bindley (1862)

Answer 18

Silence cannot amount to acceptance.

“If I hear no more about him, I consider the horse to be mine at £30.”

Question 19

Vitol v Norelf (1979) HL

Answer 19

There are exceptional circumstances where silence can amount to acceptance. This was where conduct clearly showed that rescission had been accepted.

Question 20

Adams v Lindsell (1818)

Answer 20

The postal rule: this applies where post is the agreed form of communication between the parties and the letter of acceptance is correctly addressed and carries the right postage stamp. The acceptance then becomes effective when the letter is posted.

Question 21

Henthorn v Fraser (1892)

Answer 21

It must be reasonable to accept the communication by post.

Question 22

Horwell v Hughes (1974)

Answer 22

The postal rule doesn’t apply when stipulated. It also does not apply where it would cause great inconvenience and absurdity.

Question 23

Entores v Miles Far East Corp (1955) CA

Answer 23

Instantaneous communications between parties is only a contract when recieved by the offeror, and the contract is made at the place where the acceptance is received.

Question 24

Payne v Cave (1789)

Answer 24

An auctioneer can withdraw before the hammer strikes.

Question 25

Routledge v Grant (1828)

Answer 25

An offeror may withdraw an offer at any time, even if they have set a fixed period of acceptance (firm offer).

Question 26

Dickinson v Dodds (1878)

Answer 26

Revocation can move from a reliable third party.

Question 27

Byrne v Van Tienhoven (1880)

Answer 27

The postal rule does not apply to revocation.

Question 28

The Brimnes (1975)

Answer 28

Communication of withdrawal of an offer by telex is effective when it could be read rather than when it is actually read.

Question 29

Daulia Ltd v Four Milbank Nominees Ltd (1978)

Answer 29

Unilateral offers come with an implied obligation not to prevent the condition becoming satisfied on the part of the offerer, which begins as soon as the offeree starts to perform their obligations.

Question 30

Errington v Errington (1952) CA

Answer 30

Unilateral contract to give the son his house if he pays the installments. It could not be revoked by him once the son began to act. But it would cease to bind him if they left it incomplete and unperformed.

Question 31

The Eurymedon (1975) PC

Answer 31

“… English Law, having committed itself to rather technical and schematic doctrine of contract, in application takes a practical approach, often at the cost of forcing the facts to fit uneasily to the market slots of offer, acceptance and consideration” per Lord WIlberforce

Question 32

Scammell v Ousten (1941) HL

Answer 32

Must be a reasonable degree of certainty in terms for them to be enforceable.

Question 33

Hillas v Arcos (1932)

Answer 33

A reasonable person in the timber trade would have understood the term therefore there is a contract.

Question 34

Walford v Miles (1992) HL

Answer 34

“Lack out agreement” where Miles offers not to offer his business elsewhere (but does). There is no breach of a lack-out agreement as the time period was not specified. As long as there was no false representation (consider what is a reasonable time to continue to pursue own interest).

Question 35

Pitt v PHH (1993)

Answer 35

Lack out had a time limit so was certain.

Question 36

RTS Flexible Systems (2010) SC

Answer 36

(Read this for contrast between Percy and British Steel)
There was an agreement to agree, and no necessity for a formal agreement was needed. Conduct was a strong indication of more than negotiation.

Question 37

British Steel Corp v Cleveland (1984)

Answer 37

There was no contract in this case, but there was a restitutionary remedy to avoid unjust enrichment.

Question 38

Regalian Properties v London Dockland Development Corp (1995)

Answer 38

Spent millions on development with no contract in place. The market collapsed and they tried to claim for the costs. There was no contract so the work was done at the claimant’s loss.