Offer and Acceptance

Question 1

Hartog (hare skins, snapping up)

Answer 1

The promisor is not bound to fulfil the promise in a sense in which the promisee knew or reasonably ought to have known at the time the promisee did not intend.

Question 2

Tamplin (childhood memory of gardens)

Answer 2

Where C has not misrepresented, the agreement is not ambiguous and no man w/ his senses about him could have made the mistake, D cannot rely on his mistake to avoid performance

Question 3

Define an offer.

Answer 3

A statement of a willingness to be bound by the terms of the statement.

Question 4

Define an acceptance.

Answer 4

A final and unqualified expression of assent to the original terms of an offer, communicated to the offeror

Question 5

What was Lord Denning’s attitude towards the offer/acceptance analysis?

Answer 5

In GIBSON he opined that it was a mistake to force all contracts into a strict offer and acceptance framework. As evidenced in BUTLER MACHINE his preference was to analyse the conduct of and between the parties as a whole and determine whether the parties had come to agreement on all material terms.

Question 6

Advertisements - Offers or Invitations to Treat? Rationale?

Answer 6

Partridge v Crittenden – advertisements are generally invitations to treat

Grainger – The rationale seems to be the need to protect the advertisor from incurring liability to every person willing to purchase the goods at the stated price (since stocks are limited)

Question 7

Display of Goods for Sale - Offers or Invitations to Treat? Rationale?

Answer 7

Boots Cash Chemists – generally the display of goods for sale is an invitation to treat, with the customer making an offer to buy by taking the goods to cashier

Rationale - If placing the item for sale in the receptacle constitutes acceptance the customer cannot substitute another article for it which he prefers/ if presenting the item at the cashier represents acceptance the vendor cannot refuse the sale even if it is extremely undesirable

Question 8

Display of Goods for Sale - Offers or Invitations to Treat? Rationale?

Answer 8

Boots Cash Chemists – generally the display of goods for sale is an invitation to treat, with the customer making an offer to buy by taking the goods to cashier

Rationale - If placing the item for sale in the receptacle constitutes acceptance the customer cannot substitute another article for it which he prefers/the vendor cannot refuse the sale even if it is extremely undesirable

Question 9

Invitation to Tender - Offers or Invitation to Treat? Exception?

Answer 9

Spencer v Harding – an invitation to tender is generally an invitation to treat

Fylde Aero Club - Where tenders are solicited from a limited class of parties and in the invitation a “clear, orderly and familiar procedure” for submitting tenders is prescribed, the invitee is at least entitled to expect as a matter of contractual right that his tender will be considered.

Question 10

How is the auction process, where there is a reserve price, to be analysed in offer/acceptance terms? (Wright)

Answer 10

For auctions held with a reserve price, the auctioneer by inviting bids makes an invitation to treat, and bidders by bidding make an offer, which is usually followed by further invitations to treat. If no further bids are forthcoming the auctioneer then accepts the last offer.

Question 11

How is the auction process, where there is a reserve price, to be analysed in offer/acceptance terms?

Answer 11

Barry v Davies – for auctions without a reserve price, there is a collateral contract between the auctioneer and the highest bidder constituted by an offer by the auctioneer to sell to the highest bidder, accepted when the highest bid is made

Question 12

List the five requirements for a valid acceptance.

Answer 12

1. The acceptance must generally correspond exactly with the terms of the offer (Butler Machine), otherwise it is a counter-offer.
2. The acceptance must generally be communicated to the offeror
3. For unilateral contracts, the offeror is as a general rule entitled to require that the offeree perform the requested act in its entirety.
4. Performance by the offeree of the requested act does not amount to an acceptance unless he did so with knowledge that the offer existed (Tinn)
5. The offer must not have been revoked - an offer may be withdrawn at any time before it has been accepted by actual communication of the revocation to the offeree (Van Tienhoven).

Question 13

A offers to buy B’s horse for £100. B proposes that £200 should be the price instead. A refuses. B then tries to accept the original offer. Discuss.

Answer 13

Hyde v Wrench – a purported acceptance which attempts to vary the terms of an offer is no acceptance at all; it is merely a counter-offer open for acceptance or rejection by the original offeror

Trollope – a counter-offer terminates the original offer

Question 14

What is the approach in battle of the forms cases?

Answer 14

Butler Machine - The last-shot analysis will prevail. Where conflicting communications are exchanged, each is a counter-offer, so that if a contract results at all (eg from an acceptance by conduct) it must be on the terms of the final document in the series leading to the conclusion of the contract.

Lord Denning reached the same conclusion but by a different route, preferring a contextual approach that asked whether the parties had reached agreement on all material points.

Question 15

Entores Ltd

Answer 15

Barring fault on the part of the offeror, a contract is formed when and where the communication of the acceptance is received by the offerors

Question 16

Brinkibon

Answer 16

Entores applicable to instantaneous communications

Question 17

The Brimnes (2 applications, caveat)

Answer 17

Message of acceptance probably treated as communicated at moment of receipt provided it is sent during normal business hours/when, according to normal business practice, the message would be read. Likewise for notices of revocation of offer.

Caveat - decision not strictly on the communication of acceptance; concerned notice of withdrawal from a charterparty.

Question 18

What are the rules if O prescribes a certain mode of acceptance in the offer?

Answer 18

Manchester Diocesan Council
o If on a proper construction of the terms of the offer the prescribed form of acceptance is mandatory, then any non-compliant acceptance is ineffective.
o If on a proper construction O has NOT made clear that he shall be bound only if acceptance is made in a particular form, and the chosen method of acceptance is no less advantageous to O, the acceptance may be effective

Question 19

When may silence amount to acceptance? (2 situations)

Answer 19

Felthouse v Bindley – generally silence does NOT amount to acceptance,.

However in Rust it was accepted that “doing and saying nothing” might constitute conduct amounting to acceptance; Lord Steyn in Vitol SA discussed Rust and thought that silence might exceptionally constitute valid acceptance.
Re Selectmove – if the offeree himself indicates that an offer is to be taken as accepted if he does not indicate to the contrary by a certain time, he is undertaking to speak if he does not want to accept the offer

Question 20

What is the effect and scope of the postal rule (2 qualifications, email)

Answer 20

Dunlop – Postal Rule; acceptance occurs upon posting the letter of acceptance
Henthorn – only applies provided that on a true view of the transaction, the parties contemplated post might be used to communicate acceptance
Holwell Securities - if the offer by its terms expressly mandates or points in the direction of communication, the postal rule does not apply
Thomas indicates it does not apply to email.

Question 21

A promises that he will pay B £100 if B walks from London to York. B is halfway there when A purports to withdraw his offer. B then seeks to claim the contract price. Discuss.

Answer 21

• Daulia Ltd and Errington indicate that the offeror cannot withdraw his offer once performance has begin but he is not obliged to honour his promise until the other party has fully performed the requested act.

Question 22

Must the offeree always know of the offer in order to accept it?

Answer 22

Gibbins v Proctor - suggests (not authoritatively) that an exception applies for unilateral contracts, where the promisor has obtained the performance for which he has promised to pay, the law should impose an obligation to perform

Question 23

Dickinson v Dodds (revocation of offer)

Answer 23

o The revocation can be communicated to the offeree by a 3rd party, so long as the offeree is made equally aware that the offer no longer stands
o The promise to keep an offer open for a period of time is not binding unless the offeree has provided consideration for that particular promise

Question 24

Name three ways in which an offer may be automatically terminated.

Answer 24

1. Rejection
2. Counter-offer
3. Expiration of the specified time limit (in the absence of which a reasonable time limit is implied)

Question 25

How may offers to the public be revoked?

Answer 25

Shuey (American case, criminal reward)/Principles of European Contract Law suggest that offers made to the public can be revoked by the same means as were used to make the offer

Question 26

Name three ways in which an offer may be automatically terminated.

Answer 26

1. Rejection
2. Counter-offer
3. Expiration of the specified time limit (in the absence of which a reasonable time limit is implied)

Question 27

Tekdata (2 points)

Answer 27

The traditional offer and acceptance analysis must be adopted unless the documents passing between the parties and their conduct - this must be a clear course of dealing - show that their common intention was that some other terms were intended to prevail.

If A makes an offer on its conditions and B acknowledges and accepts that offer on its conditions and, without more, performance follows, the contract is on B’s conditions.