Offer and acceptance (look at the screenshots of the quiz I got wrong on my IPad on 26.6.20

Question 1

What is invitation to treat R1P1

Answer 1

The goods are an invitation to treat. The goods are made available to customers, customers need to make an offer to buy them which can either be accepted or rejected.

Question 2

Harvey V Facey R1P1

Answer 2

Facey had been negotiating with the mayor of Kingston (Jamaica) to sell some property to the city.
Harvey sent Facey a telegraph ‘Will you sell us bumper Hall Pen? Telegraph lowest cash price. Facey responded on the same day said lowest price for Bumper Hall Pen £900. Harvey then replied ‘We agree to buy Bumper Hall Pen for £900’.
Facey refused to sell at that price, at which Harvey sued.
Judgement: the Privy Council decided that no contract existed between the two parties. The statement of a lowest price was merely giving information and did not amount to an offer.

Question 3

Partridge V Critendon R1P1

Answer 3

Partridge placed an advert in the magazine. Cage and Aviary Birds under Classified Advertisements. Which contained the words Quality British Bramble finch cooks and hens 25 shillings each.
He was prosecuted for offering for sale a live wild bird against S6(1) of the Protection of Birds Act 1954
Judgement: the court interpreted the words offer for sale in the same way as the case Fisher V Bell. An advert is the same as goods in a shop window and is an invitation to treat, not an offer.

Question 4

Boots V Pharmaceutical Society of Great Britain R1P1

Answer 4

Boots Chemist had changed the way their shop worked. Shoppers could choose medicine off the shelf and then pay for them at the till. Before then all medicine was stored behind a counter and an assistant had to get what was requested.
The Pharmaceutical Society of Great Britain argued under the Pharmacy and Poisons Act 1933 a pharmacist needed to supervise sales. They argued that when goods were on display they were on offer and when a shopper selected the drugs and put them into their basket that was acceptance and therefore no pharmacist had supervised the transaction at this point. So Boots were in breach of the act.
Judgement: there was no binding contract. They held that the display of goods was an invitation to treat. The customer made an offer by placing the goods into the basket. This offer could either be accepted or rejected by the pharmacist at the cash desk, so Boots didn’t breach the act.

Question 5

Harris V Nickerson R1P1

Answer 5

The defendant placed an advertisement that office furniture would be placed up for auction. The claimant spent time and money to travel to bid for the office furniture. During the auction the furniture was withdrawn. The claimant sued for loss of time and expense.
Judgement: the court held that the advertisement did not constitute an offer, but was mere a declaration of intent. Blackburn J founded his judgement on public policy grounds. Calling it a startling proposition that anyone who advertises a sale by publishing an advertisement would become responsible to everyone who attends the sale for his travelling expenses.

Question 6

Why is invitation to treat an important concept? R1P1

Answer 6

01) If a bike in a shop was an offer there would be a danger that 2 customers would say ‘I accept’ at the same time, then the shop has two contracts for 1 item.
02) It allows the shop to control who they sell their goods to, eg alcohol or knives. If an under-aged customers makes an offer to buy a bottle of wine, the shop can reject the offer and not make an illegal contract.

Question 7

What is a bilateral offer R1P1

Answer 7

When goods are sold in a shop, the goods on the shelf are an invitation to treat, the customer takes the goods to the till and makes a bilateral offer to buy them and the shop keeper accepts by saying yes (or equivalent, scanning the goods).
So bilateral offers can only be made to one person and is accepted by saying yes or equivalent.

Question 8

What are unilateral offers R1P1

Answer 8

Are often seen in reward cases (criminal or lost dog), prizes (winning the London Marathon) and promotions (buy one get one free).
The key case on this topic is Carlill V Carbolic Smoke Ball Company.

Question 9

Carlill V Carbonic Smoke Ball Company R1P1

Answer 9

The CSBC advertised a £100 reward to anyone who used a Smoke Ball and then caught the flu. They put £1000 in the bank to show they meant it. Mrs C used the Smoke Ball and then caught the flu. She sued for the reward.
The CSBC argued that the advert couldn’t be an offer as it was mere sales puff and you can’t make an offer to more than one person.
Judgement: the advert was a unilateral offer made to the world.
It wasn’t mere puff because they put money in the bank to make it look like a real offer. Unilateral offers can be made to more than one person as they are not to sell goods. This case created unilateral offers.

Question 10

What is revocation R1P1

Answer 10

Revocation is taking back an offer, for example deciding that you no longer wish to sell (or buy) the goods.
Key things to know:
When is it too late to revoke? Can the revocation be by a third party? Can you revoke an offer on Thursday if you promised to keep it open until Friday.

Question 11

Byrne V Van Tienhoven R1P1 and Law Teacher website

Answer 11

On Oct 1st VT sent a letter from Cardiff to New York offering to sell tinplate.
On Oct 8th VT sent a letter to revoke the offer.
On Oct 11th the offer arrived in New York and B sent a telegraph to accept.
On Oct 20th the letter containing the revocation arrived in New York.
Held: there was a binding contract when the telegraph was sent back to Cardiff, the revocation was sent too late.
Contract was made when it was accepted on the 11th.

Question 12

Dickinson V Dodds R1P1 and class notes 15.9.20

Answer 12

On Wednesday the 10th June Dodds offered to sell to Dickson some houses for £800, the offer to be open until 9:00 on Friday the 12th June.
On Thursday morning Dodds sold the property to Allan, he didn’t tell Dickinson about the sale. On Thursday afternoon Dickinson’s agent (close associate) found out about the sale to Allan and immediately informed Dickinson. Dickinson then found Dodds on Friday morning at 7:00 and attempted to accept the offer.
Dickinson argued:
The offer could not be revoked until 9:00 on Friday.
There was no valid revocation of the offer as Dodds did not contact Dickinson after the sale to Allan.
Held: No consideration had been given for the promise to keep the offer open until 9:00 on Friday, so it was a mere promise and had not become a contract.
When Dickinson tried to accept, he knew the property was no longer available to buy, so there was no ‘meeting of minds’.
Two contracts the house and the waiting process.
No consideration for the wait.

Question 13

There are two issues to consider when revoking a unilateral offer R1P1

Answer 13

What if you don’t know who has seen the offer (eg a poster advertising a reward for the return of a lost dog). This was shown in Shuey V US, that said you can revoke by placing an advert that ‘tis as prominent as the original offer.
Can you revoke once the conduct has begun (revoke the prize for a marathon once it has started). This was shown in the case Errington V Errington and Woods said that once the conduct begins it isn’t possible to revoke the offer.

Question 14

Ramsgate Hotel V Montefiore R1P1

Answer 14

The defendant offered to buy shares in the claimant company at a certain price. Six months later the claimant accepted the offer by which time the value of the shares had fallen. The defendant had not withdrawn the offer but refused to go through with the sale.
Held: the offer was no longer open due to the nature of the subject matter of the contract the offer lapsed after a reasonable period of time. Therefore, there was no contract and the claimant could not sue to enforce the contract.

Question 15

Bradbury V Morgan R1P1

Answer 15

In this case someone offered to guarantee loans made to a family member. The person who gave the guarantee then died.
When someone tried to enforce the guarantee they were successful because:
They didn’t know the guarantor had died at the time of accepting the offer.
The contract didn’t require any personal performance for the guarantor (such as a contract to perform as a musician) which would have obviously have been impossible after he had died.

Question 16

What is the postal rule R1P2

Answer 16

When you post a letter of acceptance, the contract is made the moment the letter is posted - even though the other party doesn’t know this yet (Adams V Lindsell).
However, there are exceptions where the rule doesn’t apply, this can be seen in the following two slides.

Question 17

Adam V Lindsell R1P2

Answer 17

On the second of September the defendant wrote to the claimant offering to sell them wool and asking for a reply by post. The letter was delayed until the 5th of September. The plaintiffs posted their acceptance on the same day but it wasn’t received until the 9th of September. On the 8th of September the defendant sold the wool to someone else. The critical point - was there a binding contract when the acceptance was posted on the 5th or when it arrived on the 9th.
Outcome - there was a contract on the 5th when the acceptance was posted. On the second of September the defendant wrote to the claimant offering to sell them wool and asking for a reply by post. The letter was delayed until the 5th of September. The plaintiffs posted their acceptance on the same day but it wasn’t received until the 9th of September. On the 8th of September the defendant sold the wool to someone else. The critical point - was there a binding contract when the acceptance was posted on the 5th or when it arrived on the 9th.
Outcome - there was a contract on the 5th when the acceptance was posted.

Question 18

Holwell Securities V Hughes R1P2

Answer 18

The defendant sent an offer to sell land, stating that the acceptance must be made by notice in writing within 6 months. The claimant sent a letter of acceptance but it was lost in the post and didn’t arrive in time. Critical point: did the postal rule apply if the offeror requires a notice in writing to accept. Held: the postal rule didn’t apply. It was acceptance to send a letter to accept but it took effect if it arrived within the time limit, not when it was posted.

Question 19

Quenerduaine V Cole R1P2

Answer 19

The offer was sent by telegram, the offeree sent a letter to accept. Critical point: was it reasonable to accept by letter when the offer was made by telegram? Held: the postal rule didn’t apply, an offer made by instant means implied that equally quick acceptance was required.

Question 20

Why does the postal rule matter R1P2

Answer 20

In real life parties change their mind and revoke offers. An acceptance may be posted but a revocation could be send by email - have to see which one takes effect first.

Question 21

Acceptance by methods of instant communication R1P2

Answer 21

From the 60’s quicker forms of communication were developed, first telex and then email. The postal rule was not really fit for purpose for instant communication.
The first attempt to decide what rules should apply was in Entores V Miles Far East Corporation, when Lord Denning said telex took effect on arrival. He also applied rules when things went wrong.

Question 22

When were Lord Denning’s rules in Entores clarified R1P2

Answer 22

The whole thing was clarified in Brinkibon V Stahag Stahl.
It was held an acceptance by instant communication takes effect when sound business practice would suggest it should be seen:
Normally this is when it’s sent, as arrival is the same time.
If it was out of hours, it would be when you expect it to be seen, ie when the office opens.
This may be different if the other person knows that this person works differently, you could argue that acceptance by email would take effect at 10pm if someone looks at their emails all the time.

Question 23

What case decided when an email is received R1P2

Answer 23

Thomas V BPE Solicitors - the court held that the postal rule didn’t apply to an email, as it had been established by authority that it didn’t apply to other forms of instant communication like telexes. The question was the mail received for legal purposes when it was received by computer or when the office next opened.
Held: it depended on the expectations of the parties. The email did not constitute al legally binding acceptance saved the vacationer from professional negligence for the loss of the deal.

Question 24

Can a contract be accepted by silence R1P2

Answer 24

In general there is a rule that acceptance must be communicated - there can’t be acceptance by silence
Felthouse V Bindley
Felthouse wanted to buy a horse from this nephew saying ‘if i hear nothing more about him, i consider the horse mine at £30.
The nephew didn’t reply as he was busy on his farm but he told the man running the auction, Bindley, not to sell the horse. By accident Bindley did sell the horse. Felthouse then sued Bindley for selling a house that belonged to him.
Held: the uncle didn’t own the horse as the nephew never excepted his other.

Question 25

What do we mean by a counter offer R1P2

Answer 25

Hyde V Wrench
Wrench offered to sell his farm to Hyde for £1000, stating that it was the final offer and that he would not alter from it. Hyde then offered £950 for the farm which Wrench refused to accept. After Wrench’s rejection of £950 Hyde said he agreed to buy the farm for £1000. Wrench refused to sell Hyde the farm and Hyde sued for breach of contract.
Held: There was no contract between them. The counter offer of £950 also acted as a rejection of Wrench’s offer to sell for £1000, so when Hyde attempted to accept for £1000 there was no longer an offer to accept.

Question 26

How did the courts distinguish Hyde V Wrench in the case Stephenson V McLean R1P2

Answer 26

By telegraph D offered to sell iron to P for 40 shillings. P sent back a telegram to D asking whether D would accept 40 for delivery over two months, or if not, the longest limit you would allow. D didn’t respond to the telegram and later that day sold the iron to an other party. As they had not heard back from D about their question. P sent another telegram to accept the original offer.
Held: there was a binding contract. When P sent the telegram asking whether delivery could be spread out this was a mere enquiry and not a counter offer.

Question 27

What happens when a defined method of acceptance is stated in the offer but in fact a different method is used to accept R1P2

Answer 27

In the case Manchester Diocesan Council V Commercial and general Investments - the basic rule is that where a method of acceptance is specified, this doesn’t need to be followed as long as neither party is disadvantaged.
In this case the person who received the offer said they would reply to the address on the offer but in fact they replied to a different but equally good address.
In Obiter suggests that if the offeror used really clear words to say that a particular method is mandatory and no other method will do, that would be binding on the parties.