offers

Question 1

offer defined

Answer 1

an expression of a willingness to be legally bound on a given set of terms, effective as soon as the person whom the offer is made accepts

Question 2

how do courts decide if an offer has been made?

Answer 2

objective test
-> if a reasonable person believed the alleged words/conduct implied that they intended to be bound; then may because a sufficient offer [regardless of their state of mind]

Question 3

invitation to treat

Answer 3

a preliminary statement expressing a willingness to receive offers
-> party is free to accept or reject
-> invitations to treat always lead to offers

Question 4

how to distinguish between an offer + an ITT

Answer 4

depends on the intention of the party making the statement
-> certain situations in which the distinction can be made by applying the rules of law

Question 5

advertisements

Answer 5

invitations to treat

Question 6

partridge v crittenden [1968]

Answer 6

• advertised in magazine, 25s for various chicken types
  -> prosecuted under protection of birds act 1954 for offering sale of wild birds
  -> ad was ITT, willingness to receive offers as the starting point of negotiations
  -> Lord Parker CJ:
• business sense in constructing advertisements; unless coming from manufactures, as they are ITT and not offers for sale

Question 7

in what circumstance may an advertisement be regarded as an offer?

Answer 7

if the advertisement involves a unilateral offer

Question 8

unilateral offer

Answer 8

a unilateral offer is made when one party promises to pay the other a sum of money; if the other will do something without making any promise to that effect

Question 9

unilateral contract

Answer 9

a contract by which only one party takes obligation
(a promise in return for an act)
- offeror is bound only if the specific act is performed [provided there is consideration and intention to create legal intentions]

Question 10

bilateral contract

Answer 10

a contract in which each party takes obligation
- offer and acceptance are both promises
- both parties are immediately bound

Question 11

unilateral offer explained

Answer 11

• if an advertisement indicates that they promise to pay something in return for a particular course of action, then advertiser is bound by that promise
  “£100 will be paid to anyone who can find my dog” - unilateral
  “I will give you £100 if you find my dog” - bilateral; if accepted would give rise to bilateral contract
  [promise is the important factor, advertisement is irrelevant]

Question 12

Carlill v Carbolic Smoke Ball Company Ltd (1893)

Answer 12

• medicine, 3x a day 2x weeks, if anyone contracted influenza, advertised they would give £100
• claimant caught flu, CSBC claimed mere puff, as no offer to specific person + can’t contract with whole world
  -> CoA held unilateral offer with world at large, accepted by claimant; waived need for communication of acceptance prior to a claim being made on the basis of it [entitled to the 100]
• established existence of unilateral offers

Question 13

window displays

Answer 13

not an offer, invitation to treat

Question 14

Pharmaceutical Society of GB v Boots Cash Chemsists Ltd [1953]

Answer 14

• counter to self service
• s18 pharmacy + poisons act 1933 claimed sale of drugs should not occur other than under supervision of a registered pharmacist
  -> CoA considered if contract was formed when items taken off the shelf or when presented for payment, held when presented for payment; drugs on display merely an ITT
  -> well-established case dealing with formation of contracts in all self-service shops

Question 15

analysis; boots case

Answer 15

• means offer to purchase is made at cash desk by purchaser
• shop is then free to reject or accept
• shops are not compelled to sell goods at the price at which they are displayed; as purchaser is offering to buy item at stated price
• shopkeeper can reject the offer that is desired

Question 16

Fisher v Bell

Answer 16

• display of knife in shop window
• Offensive Weapons Act 1959 prohibited the offering for sale of various offensive weapons
• shop keeper prosecuted under act but failed
• court held display of knife was ITT > offer
• therefore shopkeeper was not offering it for sale

Question 17

auctions

Answer 17

• invitation to treat
• each bid represents an offer to buy the lot at the price offered; acceptance occurs at the fall of the auctioneers hammer

Question 18

British Car Auctions v Wright 1972

Answer 18

• defendants prosecuted for offering an unroadworthy vehicle for sale
• prosecution failed ] as car had not been offered for sale, only had been an ITT [bid]

Question 19

sales of goods act 1979 [s.57 (2)]

Answer 19

• ‘a sale of auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner; until the announcement is made any bidder may retract his bid

Question 20

where there is an auction sale ‘without reserve’

Answer 20

i.e no minimum price that must be reached before the offer is accepted
-> then this equates to an offer to sell the highest bidder, which is accepted by the submission of the highest bid
- first stated in obiter, by Harris v Nickerson

Question 21

invitations to tender

Answer 21

• normally invitations to treat; therefore the person making the invitation to tender is not bound to accept any of the responses to the tender
• however if the person making the tender states that he will accept the highest offer to buy the goods or the lowest offer for the supply of goods; then the tender may be considered to be an offer or invitation to submit offers with the undertaking to accept the most favourable

Question 22

statements of price

Answer 22

• where a party simply states the minimum price at which they would be willing to sell, ITT > offer

Question 23

Harvey v Facey 1893

Answer 23

• Face going to sell store, Harvey telegraphed ‘will you sell us bumper hall eon, lowest cash price - answer paid’ -> responses ‘lowest price for bumper hall pen £900?’ -> “we agree tp buy bumper hall pen for the sum of 900 asked by you
  -> Harvey claimed accepted offer and sued for specific performance of agreement, for an injunction to restraining Kingston from taking conveyance of the property
  LP: no offer, F was statement of price and not an offer of acceptance
  Analysis: case demonstrates that the application of the general principle that offers must be capable of immediate acceptance

Question 24

communication of offers

Answer 24

• to be valid an offer must be communicated to the offeree, no party can be bound by an offer of which they were unaware; both of unilateral and bilateral
  -> offeree must have clear knowledge of the existence of the offer for it to be valid

Question 25

termination of offers: cease to exist

Answer 25

acceptance + express rejection:
- offer is accepted
- contract is formed provided that intention to create legal intentions and consideration are present
- offer may be refused or extinguished by a counter offer

Question 26

4 ways offers can be terminated

Answer 26

• revocation
• lapse of time
• failure to comply with a condition precedent
• death of one of the parties

Question 27

revocation

Answer 27

refers to the rescinding, annulling or withdrawal of an offer
-> an offer may be withdrawn at anytime prior to acceptance; the revocation must also be communicated to the offeree

Question 28

Bryne v Van Tienhoven (1880)

Answer 28

• letters passed back and forth offering to sell tinplates;
  1st: offered, 8th: changed mind, 11th: received, 15th: acceptance, 20th: received letter of oct 8th withdrawing
  LP ->
• offer of 1st had not been withdrawn at the time that it was accepted, and therefore contract was formed on acceptance on October 11th; despite the lack of agreement between the parties
  -» it would be unfair for a party to back out of a contract if they had already sent a valid offer to the other party, not knowing of the intended revocation, had already accepted

Question 29

revocation of offer must be communicated although:

Answer 29

• it does not always have to be communicated by the offeror themselves
  -> revocation made by a third party is valid, provided that
• the third party is a reliable source of infomation
• the third party is one on whom both parties can rely on

Question 30

revocation of offer of unilateral offers

Answer 30

• as unilateral offer is a promise in return for an act, it may be accepted by anyone who performs the act stipulated in the offer
  -> in order to revoke a unilateral offer, the offeror must take reasonable steps to notify the persons who may be likely to accept
• if the offeree has started performance of the act specified in a unilateral offer then it may not be revoked, even if the act is complete

Question 31

Errington v Errington & Woods (1952)

Answer 31

• father bought house using mortgage, son + DIL to live in
• promised to transfer legal title of property to them if they paid off all the payments
• couple made no promise in return
• father died after some repayments ; other family claimed possession of house; which failed
  LP ->
• contract was a unilateral contract as involved an act in return for a promise
• once performance commenced, promise could not be revoked
  -> if couple continued to pay off, then fathers promise would transfer to the house -» still binding
  -> would seem unfair to the party who was fulfilling the obligations under a unilateral contract to then be denied the benefit of that contract

Question 32

lapse of time

Answer 32

• an offer may state that it is to terminate on a particular date or after a certain fixed period; after which it is no longer capable of acceptance
• where no particular date specified for the offer to terminate, then it will lapse after a reasonable time has passed

Question 33

Ramsgate Victoria Hotel Co Ltd v Montefiore 1866

Answer 33

• claimant offered to buy shares in a hotel company in June, but company did not issue shares for sale until November
  -> court held offer would lapse after a reasonable time, what is reasonable would depend on the offer and the subject matter of the contract
  -> in cases where matter of contract would fluctuate rapidly or perishable; the offer would terminate after a short time

Question 34

failure to comply with a condition precedent

Answer 34

• an offer may terminate if the parties to it had agreed to meet certain conditions and then failed to do so

Question 35

Financings Ltd v Stimson 1962

Answer 35

• offer to sell a car on hire purchase was considered to be subject to the condition that it would remain in the same condition from the time of the offer to the time of acceptance
• when the car in question had been damages due to being stolen from showroom; contract concluded

Question 36

death of the offeror

Answer 36

• the offerors personal representatives may still be bound by an acceptance, provided that
  -> the contract does not involve the personal services of the deceased
  -> the offeree is ignorant of the offerors death

Question 37

death of the offeree

Answer 37

• where the offeree dies before acceptance, then the offer lapses and the offerees personal representatives will be unable to accept on behalf of the deceased