Offers and Invitation to Treat

Question 1

what is an offer?

Answer 1

a proposal or promise showing willingness to contract on firm and definite terms

Question 2

what an offeror and an offeree?

Answer 2

• offeror-the person who makes the offer

- offeree-person to whom an offer is made

Question 3

what is an invitation to treat?

Answer 3

indication that one person willing to negotiate contract with another but that they are not yet willing to make an ofder

Question 4

is an advertisement an offer or ITT?

Answer 4

• usually ITT (Partridge v Crittenden)

- unilateral contract-may be offer-(Carlil v Carbolic Smokeball Co.)

Question 5

are good in a shop window an offer or ITT?

Answer 5

ITT (Fisher v Bell)

Question 6

are goods on a shop shelf an offer or ITT?

Answer 6

ITT-(Pharmaceutical Society of GB v Boots Cash Chemists)

Question 7

are goods at an auction offers or ITT?

Answer 7

each lot is an ITT and offer is made by bidder (British Car Auctions v Wright)

Question 8

is a request for information and a reply to a request an offer or ITT?

Answer 8

ITT-(Harvey v Facey)

Question 9

what are the rules for offers?

Answer 9

• offer must have definite terms-(Gibson v Manchester City Council)
• offer not communicated to offeree-no offer-(Taylor v Laird)
• offer must exist to be open for existence-exact timing of duration of offer is critical-(Stevenson v McLean)
• revocation of offer-can be made at any time-(Routledge v Grant)
• communication of revocation of offer-must be effectively communicated, not necessarily by the offeror-(Dickinson v Dodds)
• offer rejected-offer ends and cannot be accepted-(Hyde v Wrench)
• offer lapsed-lapses after end of fixed time, or if no time, after a reasonable time (Ramsgate Victoria Hotel v Montefiore)
• death of one party-new the offer when known or if the offer is for personal services by the deceased

Question 10

what is acceptance?

Answer 10

a final and unconditional agreement to all terms of the offer

Question 11

what are the rules for acceptance?

Answer 11

• exact timing of offer an acceptance critical-(Stevenson v McLean)
• acceptance cannot be made through silence-(Fenthouse v Bindley)
• mandatory method of acceptance by particular method must be complied with-(Yates v Pulleyn)
• directory method of acceptance by particular method does not have to be complied with-(Reveille Independent LLC v Anotech International (UK) Ltd)
• if the posting rules apply, acceptance takes place at moment of posting-(Adams v Lindsell)
• with non-postal acceptance, acceptance takes place when offeror is aware of the acceptance-(Entores v Miles Far East)
• acceptance takes place when message is opened-(Brinkibon v Stahag Stahl)
• example of the working of offer and acceptance issues in negotiations-(Byrne v Tienhoven)

Question 12

what is consideration?

Answer 12

• executed consideration-act in return for a promise

- executory consideration-promise for a promise

Question 13

what is estoppel?

Answer 13

• estoppel-being prevented from making assertions that contradict what has previously been said to be a fact
• promissory estoppel-an equitable doctrine which can prevent a person going back on a promise which is not supported by consideration

Question 14

what are the rules for consideration?

Answer 14

consideration must be sufficient-must be real and have some value-(Chappell v Nestle Co.Ltd)

past consideration is no consideration-(Re McArdle)

consideration must move from the promise-(Tweddle v Atkinson)

performing existing duty not consideration for new contract-(Stilk v Myrick)

where there is acceptance as part payment of a debt-payment of lesser sum on day debt due cannot be in satisfaction of the greater debt-(Foakes v Beer)

promissory (equirtable estoppel)-equitable doctrine which can prevent person going back on promise-(Central London Property Trust Ltd v Trees House Ltd)

Question 15

what is privity of contract?

Answer 15

only those who are parties are bound and can benefit from it-(Dunlop Pneumatic Tyre Co. Ltd v Selfridge)

Question 16

what is the relationship between privity of contract and consideration?

Answer 16

in certain circumstances the courts try to avoid the strict rule of privity by allowing for damages for distress-(Jackson v Horizon Holidays)

Question 17

what are the exceptions of privity of contract?

Answer 17

collateral contracts can provide exception-finding second contract alongside-(Shanklin Pier v Detel Products)

Contracts (Rights of Third Parties) Act 1999-(Beswick v Beswick)

Question 18

what is intention to create legal relations?

Answer 18

parties to a contract expressly or impliedly agree that contract is legally binding and therefore enforceable in court

Question 19

what are the rules for business agreements?

Answer 19

presumed to be legally binding-(Edwards v Skyways)

presumption can be rebutted by showing opposite in the case-(Jones v Vernons Pools)

Question 20

what is a letter of comfort?

Answer 20

written assurance usually provided by parent company where parent company wishes to give some assurance to lender in respect of subsidiary’s ability to replay loan but has no obligation to pay on its behalf

Question 21

what is the rule for letter of comfort?

Answer 21

not usually legally binding but may give rise to legally binding obligation depending on wording-(Klienwort Benson v Malaysian Minding)

Question 22

what is the rule for social and domestic arrangements?

Answer 22

presumed not to be legally binding-(Balfour v Balfour)

presumption can be rebutted by showing the opposite in the case-(Merritt v Merritt

social arrangements can be like business arrangements-if money has changed hands-(Simpkins v Pays)