Offer And Acceptance

Question 1

What is an offer?

Answer 1

An expression of willingness to contract on specified terms, made with the intention that it is to become binding when accepted by the person to whom it addressed. (Treital)

Question 2

What is a unilateral contract?

Answer 2

When one party makes a promise in return for the performance of a specific act.( Carlill v Carbolic Smoke Ball Co 1893)

In this there is no need for the person accepting the offer to communicate acceptance.

Question 3

What is a bilateral contract?

Answer 3

A promise made by one party in return for a promise made from another( both showed consideration)
Eg-sale of titles to a property in exchange for sale price

Question 4

What is an invitation to treat?

Answer 4

A preliminary statement expressing a willingness to receive offers
An invitation to negotiate.

Advertisements are generally considered Invitations to treat
Partridge v Crittenden 1968.

Only exception is when the advert makes a unilateral offer( reward posters/ or if you do this we will pay you this) Carlill v SBC 1893

Shop window displays are invitations to treat
Fisher v Bell 1961

Question 5

What is the mirror image rule?

Answer 5

That acceptance by the offeree must mirror the terms proposed by the offer, either by oral, written or conduct. It must be clear when acceptance occurred.

Question 6

What is the effect of a counter-offer?

Answer 6

A counter-offer terminates the original offer
(Hyde v Wrench 1840)

It is then for the offer or to reject or accept the counter offer.

Not to be confused with request for information that will not destroy the original offer.
(Stevenson, Jaqueline & Co v McLean 1880)

Question 7

What is the rule regarding communication of acceptance?

Answer 7

Acceptance is only valid when it is communicated to the offeror
(Entores Ltd v Miles Far East Corp 1955)
i.e if it is not heard, there is no contract-this is important to determine the moment the contract becomes binding.

Question 8

What are the rules with method of communication?

Answer 8

If the offeror suggests a particular method, the offeree is entitled to accept using a different method as long as it does not cause delay and the acceptance is known to the offeror.

But-if the offeror insists that acceptance is only valid if communicated in chosen method then it must be clear in the offer
(Tinn v Hoffman 1973)

If no method has been prescribed then the appropriate method will be determined with the nature of the offer and the reasonable of the communication.

Question 9

Does silence constitute acceptance?

Answer 9

The general rule is silence does not constitute acceptance

Felthouse v Bindley 1862

Question 10

What is the postal rule?

Answer 10

When acceptance is sent by post , it has been communicated as soon as it is put in the post by the offeree, regardless of whether it was received.
(Adams v Lindsell 1818)

However, it must be stamped and properly addressed and in the hands of a postal service worker( you cannot hand the letter to the postman)

Question 11

What is the rule regarding acceptance by electronic means?

Answer 11

The rules are different to the postal rule-the contract is only complete when acceptance is received by the offeror at the place (country) where the acceptance is received.
(Entores Ltd v Miles Far East Corp 1955)

Unknown as to the rules regarding emails and web based exchanges
Academic debate of whether acceptance via email should be valid when it reaches the offerors place of business within office hours (puts responsibility on firms to regularly check emails at work)

Question 12

How might a contract be terminated?

Answer 12

Either
 Counter-offer
Revocation
Lapse of time
Conditional offers
Death of the offeror
Death of the offeree

Question 13

What is revocation of the offer?

Answer 13

An offer can be revoked any time before it is accepted.
(Payne v Cave 1789)

Even if offeror has said they will keep offer for specific time period, they can still choose to revoke the offer to the end of that time period.
(Routledge v Grant 1828)

Exception -when a separate contract made that specifies keeping offer open.

Revocation must be communicated to the offeree
(Byrne & Co v Leon Van Tienhoven & Co 1880

BUT -that can be through a reliable third party
(Dickinson v Dodds 1876)

Question 14

What is a conditional offer?

Answer 14

It is an offer that includes a condition that needs to be fulfilled before it is capable of being accepted. The condition may be express or implied.

(Financings Ltd v Stimson [1962] )
Finance company did not sign hire agreement, car was stolen and badly damaged before the agreement date and worth considerably less. The offer was conditional on the car remaining in same condition at moment of acceptance which it wasn’t-no acceptance.

Question 15

Why does there need to be a degree of certainty over what was agreed before determining if a contract was formed?

Answer 15

Because even though the parties have appeared to make an agreement, the courts can refuse it if there is uncertainty.

(‘Scammell v Ouston 1941)

Question 16

Do the courts accept that parties can impose on themselves a duty to negotiate in good faith?

Answer 16

The House of Lords in (Walford v Miles 1992) found that there were occasions that there could be a binding lock-out agreement but it would have to have an express or implied time limit

However, even with a time limit, HOL felt that a duty to negotiate in good faith was meaningless without content.-too uncertain.