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Contract Law > Offer and Acceptance > Flashcards

Offer and Acceptance Flashcards

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1
Q

What does an agreement consist of?

A

Offer, acceptance, consideration, intention to create legal relations.

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2
Q

Define: offer.

A

An offer is an ‘expression of willingness to contract on specified terms made with the intention that it is to become legally binding as soon as it is accepted by the person to whom it is addressed’ Treitel

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3
Q

What is an invitation to treat and it’s 4 examples?

A

An ITT is not an offer but an early stage of negotiations - an expression of willingness to negotiate - and consequently cannot be ‘accepted’.
Advertisements (Partridge v Crittendon), invitation to tender, displayed goods, auctions.

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4
Q

What are option contracts?

A

Promise to keep the offer open for a set period of time.
The offeror can still withdraw the offer prior to the expiration date (Routledge v Grant)
Unless the offeree has given consideration in return for it (Dickinson v Dodds).

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5
Q

What does a counter offer do?

A

It changes a fundamental term of an offer, such as price.
Rejects the original offer (Hyde v Wrench)
Leads to ‘battle of the forms’ (Butler Machine Tool v Ex-Cell-O)

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6
Q

What is revocation?

A

If an offer has been made to several parties an agreement to sell with one party does not revoke the other offers. You must tell the other parties.
Revocation must be communicated (Byrne v Van Tienhoven) to the offeree prior to acceptance (Payne v Cave).

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7
Q

What kind of lapses terminate offers?

A

Lapse of Offer: Time, death and non-fulfilment

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8
Q

What is acceptance? Does motive matter?

A

Acceptance must be a mirror image (Hyde v Wrench) and must be made in response to the offer by the offeree (Boulton v Jones)
In accepting the offeree must know about the offer (R v Clarke). Motive for the acceptance is irrelevant (Williams v Carwardine)

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9
Q

Is acceptance deemed communicated if the offeror is at fault for it not being communicated?

A

Yes (Entores v Miles)

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10
Q

What is the postal rule?

A

Acceptance takes effect the moment it is properly posted (Adams v Lindsell)

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11
Q

How can the offeror oust the postal rule?

A

Requiring the acceptance binds upon receipt of communication (Howell Securities v Hughes)

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12
Q

How does instantaneous communication differ to the postal rule?

A

Binding contract upon reception of acceptance (Entores v Miles)
Pretty much opposite from the postal rule.
H of L: there is no universal rule that can be applied in every situation where there is a purported acceptance by instantaneous means of communication (Brinkibon v Stahag Stahl)

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13
Q

Can the offeror prescribe a mode of acceptance?

A

Yes (Manchester Diocesan)
Buckley J - (‘only’, not ‘must’).
If not any mode that is equally speedy will suffice (Tinn v Hoffman)

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14
Q

How is the intention to create legal relations communicated?
How is intention judged? Exception?

A

Expressly or impliedly (Rose and Frank Co v Crompton Bros)

Objective - reasonable man (facts, past conduct) (Smith v Hughes), depends on the context (Edmonds v Lawson)

Subjective - intention when the offeror has made a mistake as to the terms of the offer and the offeree knows or ought to have known about, not valid acceptance (Hartog v Colin Shields - hare skins).

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15
Q

Intention to create legal relations - commercial agreements - general rule

A

An intention to create legal relations is presumed in commercial contexts (Bunn v Rees)
Bowerman (keep money safe, skiing trip). Cannot escape liability by having fingers crossed behind back.

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16
Q

Commercial agreements - factors in rebutting the existence of intention to create legal relations

A

(Bunn and Bunn v Rees Parker)

  • How typical the terms are in binding commercial agreements
  • The clarity of terms
  • The experience of the parties involved
  • Whether a more detailed agreement is to be later established will not necessarily affect the existence of intention to create legal relations
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17
Q

Is there a presumption for or against an intention to create legal relations in domestic (social, family) contexts? Who does it affect?
What does one depend on when deciding whether the presumption is rebuttable?

A

Against (Balfour v Balfour, married couples; Jones v Padavatton, parents and child)
The circumstances and the language used – written agreement (Meritt)

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18
Q

Intention to create legal relations - capacity - general rule?

A

A person must have capacity to enter into legal relations. They will have capacity if they are over 18, of sound mind and not suffering from a factor excluding capacity (i.e. intoxication). Contract made with a minor will become binding once major.

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19
Q

3 key criteria of an offer.

A

Clear and certain (object, price) (Storer v Manchester City Council).
Too uncertain if not a clear price (Gibson v Manchester City Council).
Intention (Smith v Hughes).
Communicated (Taylor v Laird). Orally, in writing or by conduct.

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20
Q

2 exceptions to adverts being ITTs?

A

Exception: It makes a unilateral offer (Carlill v Carbolic Smoke Ball).
A unilateral offer requires a prescribed act of acceptance. The specificity of the language used is important (Lefkowitz v Great Minneapolis Surplus Store)
Exception: An advert will be an offer if it is clear, certain and made by a manufacturer with limitless supplies (Grainger v Gough - wine)

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21
Q

What are displayed goods for sale?

A

ITT (Fisher v Bell)

The offer is made by the customer at the till (Pharmaceutical Society v Boots)

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22
Q

What are auctions? Plus an exception

A

X’s soliciting of bids at an auction is an invitation to treat; the bid is the offer;
the fall of the gavel is the acceptance (Payne v Cave).
Exception: Items put up for sale without reserve are unilateral offers (Barry v Davies).
The contract is formed with the auctioneer so the claimant is entitled to damages but not specific performance.

23
Q

What is a request for further information?

A

A mere enquiry about an issue that is ancillary to the offer is a request for further information and leaves the offer open (Jacques v McLean).

24
Q

Can an individual revoke an offer by post?

A

Yes. It only takes effect when it is received (Byrne v Van Tienhoven)

25
Q

Can a third party revoke an offer?

A

Yes (Dickinson v Dodds)

Treitel criticised this for causing uncertainty. The offeree must decide whether the source is reliable.

26
Q

How can one revoke unilateral offers?

A

If reasonable steps taken to bring revocation to the attention of all those who may have read the offer.
Must be given equal notoriety (Shuey v USA)
Must occur prior to completion (Great Northern Railway v Witham)

Except where the offeree has: 
- partly performed the obligation, 
- is willing to complete it 
- it would be inequitable to revoke the offer 
(Errington v Errington)
27
Q

How must acceptance be communicated?

A

To the offeror; silence is not acceptance (Felthouse v Bindley)
Conduct can communicate acceptance if it coincides with an intention to accept (Taylor v Allon c.f. Intense Investments Ltd v Development Ventures Ltd)
Acceptance can be made by the offeree’s agent (Gibbons v Proctor)

28
Q

Can a third party accept?

A

Yes, if the offeree indicates that he considers the acceptance irrevocable (Powell v Lee)

29
Q

What does properly posted mean?

A

Properly posted means put into a Royal Mail post box or the hands of a Post Office employee authorized to receive them, a postman is not authorized to receive them (ex p. Jones)

30
Q

Is acceptance still valid if post is delayed or lost?

A

Yes (Household Fire Insurance v Grant)

31
Q

What is essential for the post rule to apply?

A

Must be reasonable for the offeree to use post for the rule to apply (Henthorn v Fraser). It is unreasonable when prompt acceptance is required (Quenerduaine v Cole).
The rule should not be used where it would lead to a manifest inconvenience and absurdity (Holwell Securities v Hughes)

32
Q

What happens if the acceptance letter is incorrectly addressed?

A

The rule is displaced and acceptance will take place at receipt or a time least favourable for the party in error (Gesellschaft v Contimar)

33
Q

Intention to create legal relations - commercial agreements - what are the 6 exceptions?

A

Advertisements, comfort letters, honourable pledge clauses, subject to formal contract clauses, social circumstances, statements of jest/anger

34
Q

Intention to create legal relations - commercial agreements - exceptions - comfort letters?

A

Letters of support provided by an accounting firm to assure the soundness of a company’s financial situation. Comfort letters must be promises as to future (not present) conduct. Mere statement of fact (Kleinwort Benson v Malaysia Mining Corporation)

35
Q

Intention to create legal relations - commercial agreements - exceptions - honourable pledge clauses?

A

(Rose and Frank Co v Crompton Bros)

An honourable pledge clause is an express clause in an agreement rebutting an intention to create legal relations

36
Q

Intention to create legal relations - commercial agreements - exceptions - subject to (formal) contract clauses?

A

(Chillingworth v Esche)
Only exceptional circumstances will displace the prima facie meaning of the words ‘subject to (formal) contract’
Or air studios v lombard north central - envisage formal contract to be executed in future. IS clearly an offer.

37
Q

Intention to create legal relations - commercial agreements - exceptions - case for ‘just friends’?

A

Hadley v Kemp

38
Q

Intention to create legal relations - commercial agreements - exceptions - case for statements made in jest/anger?

A

(License Insurance Corporation v Lawson) or leonard v pepsico.

39
Q

Intention to create legal relations - commercial agreements - can one agree to agree?

A

No - too uncertain. Barbudev v Eurocom Cable

40
Q

Intention to create legal relations - commercial agreements - what is a first refusal clause?

A

An offer to inform the other on what terms they would contract - AstraZeneca v Albemarle

41
Q

Intention to create legal relations - commercial agreements - best endeauvours?

A

Where the object of the best end is certain, the obligated party is legally bound - Jet2Com v Blackpool Airport.

42
Q

Offer lapse: time

A

If a deadline is set any acceptance made outside this deadline will not be an acceptance (Ramsgate Victoria Hotel Co v Montefiore)
If no acceptance in a reasonable time offer will lapse

43
Q

Offer lapse: death

A

If offeree knows the offeror has died the offer will have lapsed, if he does not then it can still be accepted (Bradbury v Morgan)

44
Q

Offer lapse: non-fulfilment

A

Failure to fulfil the condition present in the offer will prevent acceptance taking place (Financing Ltd v Stimson)

45
Q

How can the offeree oust the postal rule?

A

Offeree may be able to attract their acceptance once accepted… by sending a faster letter (Dunmore v Alexander) but this is not approved of.
C.f. Wenkheim v Arendt.

46
Q

When does instantaneous communication need to be received to be deemed read?

A

In office hours The Brimnes)

If sent outside office hours it will be treated as received at the start of office hours (Modial Shipping)

47
Q

What do office hours mean?

A

Depends on the context (Thomas v BPE Solicitors)

48
Q

When is an email deemed received?

A

When in the inbox (Chwee Kin Keong v Digilandmail.com)

49
Q

What mode of acceptance can the offeree use if offeror prescribes post?

A

It implies writing is necessary. Inclusion of an email address implicitly validates email as a mode of acceptance (Quenerduaine v Cole)

50
Q

What if the offeror prescribes a mode of acceptance for the offeree’s benefit?

A

The offeree can waive the stipulation and use an alternative method, provided the alternative method does not disadvantage the offeror (Yates Building Co v Pulleyn and Sons Ltd)

51
Q

Does importance or duration of agreement affect the presumption of the existence of intention to create legal relations in commercial agreements?

A

No (Well Barn Farming v Backhouse)

52
Q

Who is the onus to disprove the presumption of the existence to create legal relations placed upon?

A

The party attempting to rebut the presumption
It is HEAVY
Where the language is ambiguous, it will be interpreted against the party trying to disprove an intention to create legal relations (Edwards v Skyways)

53
Q

3 exceptions to there being a presumption against an intention to create legal relations in domestic (social, family) contexts?

A

Exception 1: where the previous conduct of parties suggests otherwise (Peck v Lateau, bingo)
Exception 2: Where a mutuality of obligations exists (Simpkins v Pays, fashion)
Exception 3: in separating couples scenarios (Merritt v Merritt)

54
Q

Intention to create legal relations - capacity - exceptions to a person always needing capacity to enter into legal relations?

A

i) contracts for necessaries: s3.2 and 3 sga 1979 ‘a reasonable price’ - Nash v Inman.
ii) Beneficial contracts of service: contract Doyle v White city stadium (young boxer being able to box) with Aylesbury FC v Watford Association FC (said footballer was in beneficial contract of service. Looked at dire A facilities, court disagreed).
Proform Sports Management Ltd v Proactive Sports Management Ltd. (rooney, did not breached r’s BCS, educated didnt develop under contract)

Contract Law (4 decks)

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