Offer and acceptance mcqS Flashcards
A man is showing off his rare first edition book to his neighbour when he says, ‘I might consider selling this book for a five-figure sum’. The next day, the neighbour tells the man that he accepts his offer and gives him a cheque for £10,000. Which of the following options best describes whether the man made a valid offer to his neighbour?
No, because he did not mention the title of the book in his statement.
Yes, because his statement was clear and certain about the book and price.
No, because the statement was not clear about the price, nor did it show an intention to be bound.
No, because his statement was not clear and certain about the book and price.
No, because the statement was not clear about the price, nor did it show an intention to be bound.
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On 1 February, a Council places a notice on public display which reads: “For sale, (used) printers, £85 each, contact Council Estates Division”. On 5 February, a woman writes to the Council Estates Division ‘I am happy to pay £85 for one of your printers identified in your notice dated 1 February’. On 11 February, the Council writes back ‘thank you for your letter dated 5 February. We are happy to go ahead. Please contact us by telephone to arrange delivery’. Which one of the following best explains the legal position?
The notice constitutes an invitation to treat which was rejected by the woman’s counter-offer in her letter dated 5 February. The Council’s letter of 11 February is an acceptance.
The notice constitutes an offer which was rejected by the woman’s counter-offer in her letter dated 5 February. The Council’s letter of 11 February is an acceptance.
The notice constitutes an invitation to treat. The woman’s letter dated 5 February is an offer. The Council’s letter of 11 February is an acceptance.
The notice constitutes an offer which was accepted by the woman’s letter dated 5 February. The council’s letter of 11 February is a request for further information.
The notice constitutes an offer which was rejected by the woman’s counter-offer in her letter dated 5 February. The Council’s letter of 11 February is a request for further information.
The notice constitutes an invitation to treat. The woman’s letter dated 5 February is an offer. The Council’s letter of 11 February is an acceptance.
To promote a new sports club, the venue owner puts an advert in a newspaper advertising an open day for potential members. The advert includes the following statement, ‘Shoot ten netball goals in a row at our open day and you will receive a £50 club token to spend on fitness classes’. A woman sees the advert and immediately phones the club to state that she accepts the challenge and will be attending the fun day. The woman is the first person to shoot ten goals. A man sees the advert and is the second person to shoot ten goals.
Which one of the following statements best explains the legal position?
The advert is a unilateral offer. Consequently, it will be construed to entitle the first person to shoot ten goals to be entitled a token. Only the woman is entitled to a token.
The advert is an invitation to treat. By contacting the club, the woman has formed a bilateral contract with the sports club and is entitled to a token.
The woman is the only participant who is entitled to a token as she was the only participant who communicated her intention to accept prior to completion of the prescribed act.
The advert is an invitation to treat. Consequently, none of the participants are entitled to a token.
The advert is a unilateral offer. The woman and the man are both entitled to a token as they have completed the act prescribed by the advert.
The advert is a unilateral offer. The woman and the man are both entitled to a token as they have completed the act prescribed by the advert.
A man has lost his dog. He puts up signs around the local neighbourhood with his address and a picture of his dog, reading “£50 reward for anyone who returns this dog to me”. Has the man made an offer capable of acceptance?
The man has made an offer which is accepted by someone finding the dog.
The man has not made an offer to contract because a very large number of people might read the notice and search for the dog.
The man has made an offer which is accepted by someone looking for the dog.
The man has made an offer which is accepted by someone returning the dog to the man.
The man has not made an offer to contract because it is possible that the dog will never be found.
The man has made an offer which is accepted by someone returning the dog to the man.
The owner of a campervan sends an email to an interested buyer. Her email states, ‘I will sell my campervan to you for £15,000.’ The interested buyer responds, ‘I want to go ahead if your campervan has a full-service history.’
Which one of the following statements best describes the legal position?
The interested buyer’s response is a counter offer. The campervan owner’s offer is extinguished.
The interested buyer’s response is a request for further information. The campervan owner’s offer is extinguished.
The campervan owner’s email is an invitation to treat. The interested buyer’s response is an offer.
The interested buyer’s response is a request for further information. The campervan owner’s offer remains open for acceptance.
The interested buyer’s response is a conditional acceptance. The parties will have a contract for the sale of the campervan provided it has a full-service history.
The interested buyer’s response is a request for further information. The campervan owner’s offer remains open for acceptance.
Correct. The statement is a request for further information as the interested buyer is making an enquiry about an ancillary matter. The answer correctly states the legal effect of a request for further information (see Stevenson Jacques v McLean [1880] 5 QBD 346). The other answers seem plausible, but they are not correct. A request for further information does not terminate the offer (see Stevenson Jacques v McLean [1880] 5 QBD 346) A valid acceptance must be unconditional (see Hyde v Wrench 49 ER 132) A counter offer must propose alternative terms for acceptance (see Hyde v Wrench 49 ER 132).
An antique collector visits a local auction house. The auction includes a rare antique table like the one the antique collector is looking for and the auction is stated to be ‘without reserve’. The auctioneer invites bids. The antique collector bids £500. Although the antique collector is the only person in the room to bid, the auctioneer refuses to accept his bid, stating that it is too low.
What advice would you give the antique collector?
The auctioneer is in breach of a bilateral contract and the antique collector is entitled to buy the table for £500.
The auctioneer is in breach of a unilateral contract and the antique collector is entitled to nominal damages.
The auctioneer is in breach of a bilateral contract and the antique collector is entitled to damages.
The auctioneer is in breach of a unilateral contract and the antique collector is entitled to damages.
There is no contract between the parties and the antique collector is entitled to nothing.
The auctioneer is in breach of a unilateral contract and the antique collector is entitled to damages.
Although a request for bids at an auction is usually no more than an invitation to treat, a statement that an item will be auctioned ‘without reserve’ constitutes a unilateral offer which is accepted by the act of a bona fide bidder making the highest bid (Warlow v Harrison, confirmed in Barry v Davies). No contract for sale of the table has been concluded between the parties, as the auctioneer’s hammer has not fallen (which would otherwise constitute acceptance of the antique collector’s offer – Payne v Cave). As a result, the antique collector is not entitled to the table. However, the antique collector has accepted the auctioneer’s unilateral offer by making the highest (albeit the only) bid at the auction and is therefore entitled to damages for breach of that separate collateral contract (Barry v Davies).
Question 1
A client wanted a skip to take away rubbish and so contacted a skip hire company. The
company posted a quotation for £90 and said that if the client wanted to accept the
company needed to know by Friday 19 April.
On Tuesday 16 April the client posted a letter accepting the quotation and asking when
would be the earliest the company could supply a skip. By 22 April the client had not heard
back from the company. The client rang the company. It said it had not received the letter
and had no skips available for hire now or in the near future.
If the client sued the company for breach of contract, which of the following best
describes the most likely outcome?
A The company would be liable for breach because a contract was formed when the
client posted the letter on 16 April.
B The company would not be liable for breach of contract because the client’s letter on
16 April amounted to a counter- offer.
C The company would not be liable for breach of contract as it had no more skips
available.
D The company would be liable for breach of contract as the client accepted its offer
when the client rang on 22 April.
E The company would not be liable for breach of contract as the postal rule would
not apply.
Answer
The correct answer is E.
An offer was made by the company to hire out the skip for £90. The client purported to accept
on Tuesday 16 April. The letter was not a counter- offer as the client was only asking a question
and not imposing a condition, so B is wrong. Acceptance must be communicated. On that
basis the client has no contract with the company, because by the time the client actually
contacted the company (ie on 22 April) its offer had lapsed (19 April), so D is wrong.
There will only be a contract if the postal rule applied. Under the postal rule a letter of
acceptance is binding as soon as it is posted. For the rule to apply the post must have been
a reasonable means of communication. On the facts it may have been reasonable to reply by
post on 16 April as the offer did not lapse until 19 April and also the quote had been sent by
post. Query though whether the letter was sent first or second class and at what time (eg was
it posted after the last postal collection on 16 April?).
In any event the postal rule will only apply where a letter was properly addressed and
posted etc. Query here why the client’s letter was lost in the post, eg had it been properly
addressed? Also the postal rule may have been impliedly excluded as the company said it
needed to ‘know’ by 19 April. Only in the unlikely event of the postal rule applying would there
be a contract. This is why A is wrong.
C is wrong because even if the company had no more skips it could be in breach and liable
to pay damages.
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Question 2
A client attended an auction. When it came to the lot comprising Victorian garden
ornaments, the auctioneer said they had been valued at £300 and would be sold that day
whatever price they fetched. He invited bids of £100, then £80. When nobody responded,
the auctioneer asked how much anyone would be prepared to pay for the ornaments and
the client bid £20. No further bids were made but the auctioneer withdrew the ornaments
from the sale. He later sold them privately for £150.
Which of the following statements best sums up the legal position of the client?
A The client could sue the owner of the ornaments for breach of a contract.
B The client could sue the auctioneer for breach of contract and the measure of damages
would be £130.
C The client could sue the auctioneer for breach of a unilateral contract.
D The client would not have an action for breach of contract as the bid was far too low.
E The client could sue the auctioneer for breach of a bilateral contract and the measure
of damages would be £280.
Answer
The correct statement is C.
Normally at an auction the bids are the offers and the fall of the auctioneer’s hammer is the
acceptance (SGA 1979, s 57). Therefore, the client had no contract to buy the ornaments from
the seller as the auctioneer did not accept the bid. Hence A is wrong.
Here the auctioneer made an offer of a unilateral contract when he said that the ornaments
would ‘be sold that day whatever price they fetched’. This is why E is wrong. He was promising
to sell to whoever made the highest bid (Barry v Davies) but he did not then sell to the highest
bidder so he was in breach of contract. The amount of the bid is irrelevant and that is why D
is wrong.
The auctioneer will be liable in damages to the client for £280, ie the difference between the
value of the ornaments (£300) and the amount of the client’s bid (£20), so B is wrong.
Question 3
At 9am a car dealer emailed a client offering to sell her a vintage car for £60,000. The
client received the email shortly afterwards and emailed an acceptance of the offer at
12.55pm. The client knew that the car dealership closes for lunch each day between 1pm
and 2pm. After lunch the car dealer did not check his email account. At 2.30pm the car
dealer received an offer for £62,000 for the vintage car, which he accepted. At 4pm the
client phoned the car dealer to enquire about the car and was told the car was no longer
for sale. The client has been reliably informed it will cost £65,000 to buy a similar car
elsewhere.
Which of the following statements best sums up the legal position of the client?
A The client has a contract with the dealer to buy the car and can sue the dealer for
£2,000 representing the profit the dealer made on selling the car elsewhere.
B The dealer revoked his offer before acceptance was communicated and so there would
be no contract of sale with the client.
C The client’s acceptance would be deemed communicated before 2.30pm and so the
dealer would be liable to pay the client damages of £5,000.
D By virtue of the postal rule, acceptance was communicated at 12.55pm and so the
dealer would be liable to the client for breach.
E When the dealer sold the car elsewhere he effectively revoked the offer to the client
and so would not be liable for breach.
Answer
The correct answer is C. Acceptance would be deemed communicated when it would be
reasonable for the client to expect it to be read. With businesses it is reasonable to expect
communications to be read during normal office hours (so here not between 1pm and 2pm
but certainly before 2.30pm). Also the aim of contractual damages is to compensate the
innocent party for loss of bargain. Here it will cost the client an extra £5,000 to buy a similar
car elsewhere. This is why A is wrong.
B is wrong as it is likely acceptance would be deemed communicated before the offer was
revoked at 4pm.
D is wrong as the postal rule only applies to letters of acceptance.
E is wrong as revocation must be communicated (by the offeror or a reliable third party).
Question 1
An architect received a leaflet from website designers advertising their website design packages. On the back of the leaflet was a copy of the website designers’ standard terms, which contained a limitation clause.
The architect wrote a letter to the website designers asking them to design his website and he attached to his letter a copy of his own standard terms and conditions, which did not contain a limitation clause. The architect received a quotation for £2,500 from the website designers.
The architect signed and returned a tear-off slip to the website designers which stated that he accepted the quotation on the website designers’ standard terms and conditions
Which of the following statements best describes the legal position?
A. The terms on the leaflet constituted an offer which the architect accepted by asking for a quotation.
B. The quotation constituted an offer which the architect accepted on the website designers’ standard terms and conditions.
C. The quotation constituted an offer which the architect accepted on the architect’s standard terms and conditions.
D. The letter from the architect to the web designers constituted an offer which the web designers accepted by sending a quotation.
E. The letter from the architect to the web designers constituted a counter offer which the web designers accepted by sending a quotation.
B. The quotation constituted an offer which the architect accepted on the website designers’ standard terms and conditions.
On 1 February, a jeweller offers to sell a diamond ring (identified by an engraved serial number) to a client for £15,000. On 3 February, the client emails the jeweller asking for details of the ring’s setting. The jeweller does not respond. On 5 November, the client emails the jeweller indicating she is accepting the offer made on 1 February.
Has a contract been formed?
Select one alternative:
Yes, because a request for further information does not extinguish an offer.
No, because acceptance was not within a reasonable time.
No, because the offer was rejected by the email on 3 February.
Yes, because an offer remains open to acceptance until it is revoked.
No, because silence does not constitute acceptance.
This is a contract law question on the topic of offer and acceptance. An offer must be unequivocally accepted to form a legally binding agreement. An offer remains open until is revoked or the offer lapses. If the offeror does not specify an expiry date for the offer, the offer will lapse after a reasonable time. As the offer is made in February the purported acceptance in November comes too late as the offer has lapsed. It is necessary to distinguish between a request for further information and a counter offer. A counter offer extinguishes an offer. A request for further information does not nullify the offer, it remains open to acceptance. The question regarding the ring’s setting was a request for further information and consequently did not nullify the offer.
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A wholesaler emails a building contractor offering to sell 10,000 kg of cement mix for £1,500 if acceptance is received by 5pm that day. At 4pm, the wholesaler receives an email from the building contractor stating, ‘We accept your offer of 10,000 kg for £1,500 but we need to discuss delivery dates.’ The wholesaler does not read the building contractor’s email until 5.10pm. At 4.45pm on the same day the wholesaler emails the building contractor to say that the cement mix has been sold to another customer.
What advice would you give the wholesaler?
Select one alternative:
No contract was created as the building contractor’s email was not an unequivocal acceptance.
No contract was created as the wholesaler revoked its offer prior to the 5pm deadline.
No contract was created as the building contractor’s email was not read by the wholesaler until after the offer had lapsed at 5pm.
An enforceable contract between the wholesaler and building contractor was created when the wholesaler received the building contractor’s email at 4pm.
An enforceable contract was created between the wholesaler and building contractor when the wholesaler read the building contractor’s email at 5.10pm.
An enforceable contract between the wholesaler and building contractor was created when the wholesaler received the building contractor’s email at 4pm.
This is a contract law question on the topic of agreement. A contract is formed when an offer is made by one party (the wholesaler) and accepted by another party (the building contractor). The issue here is whether an enforceable contract was created when the building contractor’s email was received at 4pm. The acceptance by the building contractor was a mirror image to the wholesaler’s offer and is a valid acceptance. The question around delivery was not an attempt to change material terms. It was communicated at 4pm when the email is received (not when it is read at 5.10pm). The attempted revocation at 4.45pm is therefore too late.
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A retailer emails a company offering to sell 100kg of flour for £150. The company replies, offering £120 for the flour. The retailer declines the company’s offer and sells the flour to a third party.
Which of the following statements, relating to whether there is an offer open for acceptance by either party, is correct?
Select one alternative:
The company cannot accept any offer by the retailer because there is no offer open for acceptance for the flour.
The company cannot accept any offer because a valid contract has been formed for the flour with a third party.
The retailer can accept the company’s offer of £120 in relation to the flour.
The company can accept the retailer’s offer to sell the flour for £150.
The company can accept the retailer’s offer. If the parties cannot agree a price, the court will determine an appropriate price.
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A retailer emails a company offering to sell 100kg of flour for £150. The company replies, offering £120 for the flour. The retailer declines the company’s offer and sells the flour to a third party.
Which of the following statements, relating to whether there is an offer open for acceptance by either party, is correct?
Select one alternative:
The company cannot accept any offer by the retailer because there is no offer open for acceptance for the flour.
The company cannot accept any offer because a valid contract has been formed for the flour with a third party.
The retailer can accept the company’s offer of £120 in relation to the flour.
The company can accept the retailer’s offer to sell the flour for £150.
The company can accept the retailer’s offer. If the parties cannot agree a price, the court will determine an appropriate price.
