Offer and Acceptance

Question 1

Adams v Lindsell

Answer 1

Ratio: Established the postal rule - acceptance by post occurs at the moment of posting, not at the moment of receipt.

Facts: Acceptance of an offer to buy wool was posted by the offer, but was delayed in reaching the offeror. In the interim, the offeror had assumed the buyer was not interested and sold the goods to someone else.

Question 2

Barry v Davies

Answer 2

Ratio: Where there is no reserve, a bid at an auction can be the basis of a unilateral contract between an auctioneer and the bidder.

Facts: An auctioneer withdrew goods from the auction which Barry had legitimately bid on, as the auctioneer thought the price was not high enough. There had been no reserve put on the items.

Question 3

Blackpool and Fylde Aero Club v Blackpool BC

Answer 3

Ratio: An ITT can be binding when specific language was used.

Facts: The Council were young to consider the Aero Club’s tender.

Question 4

Boulton v Jones

Answer 4

Ratio: Acceptance can only be made by the offeree.

Facts: Boulton was the new owner of a shop. Jones, a regular customer had sent a written order to the previous shop owner. Boulton sent the goods to Jones, who refused to accept them on the grounds that his offer was not made to Boulton.

Question 5

Binkibon Ltd v Stahag Stahl

Answer 5

Ratio: As a general rule, contracts are formed in the place where the instantaneous communication is received.

Facts: Concerned instantaneous communication between London and Vienna.

Question 6

Brogden v Metropolitan Railway

Answer 6

Ratio: Acceptance by conduct is possible.

Facts: Brogden had supplied the railway with coal for some time. The Railway drew up a contract to continue their relationship, but left some parts blank, which Brogden filled in. MR filed in away. The contract was arguably not formally accepted, but the parties acted in accordance with the contract for a time before the dispute arose.

Question 7

Byrne v Van Tienhoven

Answer 7

Ratio: Where an acceptance has been posted, the offeror cannot revoke their offer, even if they haven’t yet received the acceptance, as the acceptance is already effective.

Question 8

Carlill v Carbolic Smoke Ball Co

Answer 8

Ratio: An advert can be a unilateral offer when it prescribes an act which can be accepted simply by performance of the specific act.

Facts: An advert for a medical device promised to prevent influenza and offered to pay £100 cash to anyone who used the device in the prescribed manner, yet contracted influenza. The company placed funds with a bank to show its sincerity to pay. Carlill fell ill and sued.

Question 9

Countess Dunmore v Alexander

Answer 9

Ratio: Posted acceptance can be revoked by speedier means.

Facts: Alexander offered to serve the Countess of Dunmore. The Countess wrote to Alexander accepting. She then wrote another letter, revoking her acceptance, which she sent by express post and so arrived before her acceptance.

Note: This is an older Scottish case which has not been followed.

Question 10

Dickinson v Dodds

Answer 10

Ratio: An offer can be revoked by a third party not he offeror’s behalf.

Question 11

Entores v miles Far East Corporation

Answer 11

Ratio: 1. For instantaneous communication, acceptance occurs when the communication is received.

2. If the offeree is aware that acceptance has not been received, it is their responsibility to resend it. If they are not aware, and the offeror does not request it again, the offeror is deemed responsible.

Question 12

Errington v Errington and Woods

Answer 12

Ratio: Denning held that, in the case of a unilateral offer, the offeree must be allowed to try to complete the action he has started if he would otherwise suffer inequity.

Facts: Errington had promised his house to his son, on the condition that his son paid off the mortgage. This was held to be a unilateral offer, which could not be withdrawn before the end of the mortgage repayment term.

Question 13

Felthouse v Brindley

Answer 13

Ratio: An acceptance must be communicated - it cannot be through silence.

Facts: Felthouse offered to buy a horse, saying ‘If I don’t hear from you I will consider the horse mine’.

Question 14

Financings Ltd v Stimson

Answer 14

Ratio: Failure to fulfil a condition of acceptance can prevent acceptance from occurring.

Facts: A car was stolen from the dealership where it was waiting to be picked up by the customer whose offer to buy it had been accepted. At issue was whose property had been stolen.

Question 15

Fisher v Bell

Answer 15

Ratio: Displaying goods is an invitation to treat, not an offer.

Facts: A shop proprietor was acquitted of the offence of offering weapons for sale after advertising a flick-knife in his shop window.

Question 16

Getreide-Import Gesellschaft v Contimar

Answer 16

Ratio: If the letter containing the acceptance is addressed incorrectly, a communication will only be made when the letter arrives, not when it is posted.

Question 17

Gibson v Manchester City Council

Answer 17

Ratio: An offer must be clear and certain, and show an intention to enter into legal relations.

Facts: ‘May be prepared to sell’ was considered not to be clear enough to constitute an offer.

Question 18

Grainger and Son v Gough

Answer 18

Ratio: A Price list is not an offer. Although it was stated obiter that a price list from a manufacturer who had unlimited stock could be an advert that constituted an offer, rather than an invitation to treat.

Question 19

Great Northern Railway v Witham

Answer 19

Ratio: Revocation of a unilateral offer can be made any time before performance is completed: ‘if I offer you £100 if you will walk to York, I could revoke my offer at any time before you reach York’.

Note: compare with Errington v Errington

Question 20

Harvey Investments v Royal Trust of Canada

Answer 20

Ratio: Referential bids cannot form the basis of an offer.

Question 21

Henthorn v Fraser

Answer 21

Ratio: The postal rule can be ousted. A postal acceptance will not be valid at the time of posting if it is unreasonable for the offeror to expect an acceptance by post.

Facts: An offer to sell property was handed over in person. The offeror rejected it by post the next day, but the rejection did not arrive until late in the day. In the meantime, the offeree had accepted the offer by post, although the offeror only read the letter the next day.

Question 22

Holwell Securities v Hughes

Answer 22

Ratio: The postal rule will not apply if: 1. The offer states that the acceptance must ‘reach me’, or ‘by notice in writing to me’ or something analogous; or 2. the application of the postal rule would cause ‘manifest inconvenience or absurdity’.

Question 23

Household Fire and Carriage Accident Insurance Co v Grant

Answer 23

Ratio: Acceptance by post is valid, even if lost or destroyed in the post.

Question 24

Hyde v Wrench

Answer 24

Ratio: 1. A counter-offer extinguishes the original offer. 2. Acceptance must be a mirror image of the original offer.

Question 25

Lehman Brothers v Exxonmobil Financial Services

Answer 25

Ratio: In defining what constitutes ‘ordinary office hours’ or ‘close of business’, the context of the parties’ negotiations is relevant. In this case the latter term had a degree of flexibility which allowed for ‘commercial sense’.

Facts: Exxonmobil sent a default notice by fax to Lehman (who had gone into administration) which arrived just after 6pm. This was after Lehman’s close of business in its London office, but Exxonmobil successfully argued that the notice arrived within time because international banks operating in the relevant markets usually closed at 7pm.

Question 26

Manchester Diocesan Council for Education v CGI

Answer 26

Ratio: A mode of acceptance can be specified, but it must be done explicitly.

Question 27

Mondial Shipping v Astarte Shipping

Answer 27

Ratio: Where acceptance is received outside office hours, it count as having been received at the start of the next working day.

Question 28

Partridge v Crittenden

Answer 28

Ratio: An advert will generally be an invitation to treat, not an offer.

Question 29

Payne v Cave

Answer 29

Ratio: At an auction, a bid constitutes an offer, and acceptance is made by the auctioneer using the hammer.

Question 30

Pharmaceutical Society of GB v Boots Cash Chemists

Answer 30

Ratio: The offer occurs when the customer brings goods to the till. Acceptance of the offer occurs when the cashier processes the payment at the till, not when the customer takes goods off a shelf.

Question 31

Powell v Lee

Answer 31

Ratio: Acceptance by a third party is possible, but only with authorisation by the offeree.

Facts: Powell applied for a headmaster’s job. He was told he had the job by a member of the committee, who was not authorised to tell him. Someone else was chosen and Powell sued for breach of contract.

Question 32

Quenerduaine v Cole

Answer 32

Ratio: Postal rule will be ousted where it is not reasonable to accept by post.

Facts: The offer was made by telegram. Quenerduaine purported to accept by post.

Question 33

R v Clarke

Answer 33

Ratio: Acceptance must be made in response to the offer, where one is aware of the offer.

Facts: A reward was offered for information relating to a murder. The defendant gave the information after he was arrested for the murder. He had previously seen the reward but forgotten about it.

Question 34

Ramsgate Victoria Hotel v Montefiore

Answer 34

Ratio: An offer can lapse through passage of time.

Facts: Montefiore offered to buy shares in a hotel company at a set price, but did nothing. Nearly half a year later, the hotel accepted his offer. The value fo the shares had since fallen, but Montefiore had not formally revoked his offer in the meantime. He refused to take the shares, arguing that his offer had lapsed.

Question 35

Re London and Northern Bank ex party Jones

Answer 35

Ratio: A letter of acceptance must be properly posted via an authorised employee or Royal Mail post box.

Facts: A letter of acceptance given to a postman who was not authorised to collect post, only to deliver it, was not validly ‘posted’ under the postal rule.

Question 36

Reveille v Anotech

Answer 36

Ratio: If the prescribed method is for the benefit of the offeree, then the offeree may waive that requirement.

Question 37

Routledge v Grant

Answer 37

Ratio: Offeror will breach separate contract if offer withdrawn when offeree has provided consideration to keep the offer open.

Question 38

Spencer v Harding

Answer 38

Ratio: An invitation to tender is normally an invitation to treat, not an offer.

Question 39

Stevenson, Jacques and Co v McLean

Answer 39

Ratio: A request for further information will not extinguish an offer.

Question 40

Storer v Manchester CC

Answer 40

Ratio: An offer must be clear and certain, and show an intention to enter into legal relations. This will be judged objectively, by what a party’s words or conduct could reasonably be understood to mean, not by what the party personally believed them to mean.

Facts: ‘I will send you the agreement signed on behalf of the council’ constituted a clear offer.

Question 41

Taylor v Laird

Answer 41

Ratio: An offer must be communicated orally, by writing, or by conduct.

Facts: A captain resigned midway through a voyage, but then continued to navigate the vessel without being asked to do so. He claimed remuneration, but since he had not communicated his offer to his former employer, the employer had no opportunity to accept or reject and so he was not remunerated.

Question 42

The Brimnes

Answer 42

Ratio: If acceptance is received during office hours (even if it is not read until later), it will be deemed received and a contract will be formed.

Question 43

Thomas v BPE Solicitors

Answer 43

Ratio: Transactions should be viewed in context to establish what ‘normal working hours’ are.

Facts: An acceptance was received at 6pm on a Friday. The parties often interacted outside normal 9-5 office hours.

Question 44

Tinn v Hoffman

Answer 44

Ratio: An equally advantageous method of acceptance is valid, unless it has been explicitly excluded.

Question 45

Williams v Carwardine

Answer 45

Ratio: The motive for acceptance of an offer is irrelevant.

Facts: A reward was offered for information about the murder of Cawardine’s brother. Thinking she was on her deathbed, Mrs Williams gave evidence which led to the conviction of Mr Williams. Mr Cawardine argued that because Mrs W had not been motivated by the reward, she was not entitled to it. The court held that she was.

Question 46

Yates Building Co v RJ Pulleyn

Answer 46

Ratio: Uf the prescribed method is for the benefit of the offeree, then the offeree may waive that requirement.

Facts: An option to purchase land stated that acceptance should be by registered or recorded delivery. The claimant sent an acceptance by ordinary post. The defendant was not allowed to refuse this.

Question 47

Balfour v Balfour

Answer 47

Ratio: There is a rebuttable presumption that there is no intention to create legal relations in domestic settings.

Facts: An agreement between husband and wife regarding maintenance payments was breached, and the wife attempted to enforce it as a legally binding contract.

Question 48

Bunn and Bunn v Rees and Parker

Answer 48

Ratio: There is a rebuttable presumption that an intention to create legal relations exists in commercial dealings.

Question 49

Rose & Frank v Crompton Bros

Answer 49

Ratio: In order for an enforceable contract to be formed, there must be a common intention to enter into legal relations.