WEEK 2 LECTURE 1 - OFFER + ACCEPTANCE Flashcards
what happened in Smith v Hughes 1871
- C bought oats for horses from D thinking they were OLD, but they were NEW
- brought action for Mistake + Misrepresentation
Held:
- WAS a Contract
- Objective Test = Reasonable Person would expect sale of good quality oats in similar contract SINCE NO EXPRESS DISCUSSION of OLD oats
- Silence is NOT Misrep.
- MIstake was as to Quality here, NOT as to Fundamental Term of Conctract
- C had sample = chance to inspect
- D did NOT Mislead C
what’s the reasoning behind Smith v Hughes judgement
whatever someone’s intentions are, depends on if Reasonable man would believe he was agreeing to terms proposed by other party + that party upon this belief enters into contract
what is the Objectivity Test from RTS Flexible Systems v Molkerei Alois Muller 2010?
Lord Clarke:
whether there’s binding contract depends NOT on subjective state of mind, BUT on what was communicated by words/conduct + IF this OBJECTIVELY suggests they intended to CLR + agreed on all the terms to Reasonable Person
why can Objective Test cause difficulties?
which case does this relate to?
Centrovinvial Estates v Merchant Investors 1983
- tenancy offered for £65k instead of Intended £126k + was accepted
Held: Offeror bound to Objective offer
But Objectively, could D have realised Offeror’s error?
what’s Wilberforce’s resolution to dangers in Formalism in Brinkibon 1982?
every case must be resolved differently based on Objective intentions
when is there intention to create legal relations?
which case is relevant?
in commercial settings
Esso Petroleum v CE 1976
what is an offer?
what if there is NO offer?
- expression of Objective willingness to contract on sufficiently specified terms
- NO offer = Invitation to Treat
in terms of Offer + Invitation to Treat, why was it held not to be an Offer in Gibson v Manchester City Council 1974?
- council “may be prepared to sell the house” = INSUFFICIENT Commitment = NOT an Offer
- was Invitation to Treat = willingness to enter negotiations RATHER THAN enter contract
what does Pharmaceutical Soc. v Boots 1952 say about Offer vs. Invitation to Treat
- goods on shelves = Inv. to Treat
- customer arriving at till = Offer
- payment taken + accepted = contract completed
what does Harris v Nickerson 1873 say about Auctions and Offers vs Inv. to Treat
- auction = ITT by seller via auctioneer
- bidding = offer
- auctioneer brings hammer down = acceptance
what happens if an offer is validly revoked before acceptance?
nothing to accept
what does Bryne v Van Tienhoven 1880 say about Revocation of Offers?
facts of the case?
- revocation MUST be received by offeree BEFORE acceptance
- posting revocation before acceptance which only arrives after acceptance = DEFEATED by acceptance –> Postal Rule Fails
case facts:
- D wrote offer letter on 1/10 + arrived on 11/10 to P
- same day P telegraphed acceptance
- on 8/10 prices rose 25% so D wrote immediately to Revoke offer
- recovation received 20/10
Held: Offer accepted on 11/10, as only revoked 20/10
what does Dickinson v Dodds 1876 say about Revocation + 3rd Parties?
hearing of a revocation from a 3rd party = sufficient
what happens if Counteroffer made to Offer?
- original offer extinguished
- CO treated as new offer
what does Hyde v Wrench 1840 say about Counter Offers?
case facts?
- offer to sell land at 1000L
- CO of 950L refused, Offeree tries to accept original offer
- but it ceased to exist
- parties must be of 1 mind/ad idem
what happens to an offer if a mere inquiry is asked?
original offer remains open
what does Stephenson, Jacques v Maclean 1880 say about Inquiries and Offers?
case facts?
- inquiry was “Could we deliver over 2 months?”
- no response = Enquirer could VALIDLY accept Original Offer Open
what does Day Morris v Voyce 2003 say about Purported (unclear) Acceptance?
case facts?
“contractual acceptance HAS TO BE Final + Unqualified Expression of Assent to the Terms of the Offer” - per Black J
facts:
- estate agent commission orally discussed
- agent did some work BUT V asked them to STOP marketing
- V later recontacted buyer introduced to her by DM agents
- DM claimed commission
- V said she didn’t sign commission contract
Held: DM appeal allowed, V had done enough by conduct to accept a contract for agency + commission
what is the rule from Entores v Miles Far East 1955 on Communciation of Acceptance?
case facts?
if offeree does enough OBJECTIVELY to effect communication of Acceptance to offeror = does NOT matter that offeror didn’t Subjectively apprehend the Acceptance
facts:
- C based in London sent offer to D based in Amsterdam via Telex
- D sent acceptance by Telex to C
- C argued D did not fulfill contract
Issue = at what moment was contract accepted? should damages arise in Dutch or English law?
Held:
- Postal Rule DOES NOT Apply for Instantaneous Communications
- Acceptance = when Telex received, thus contract created in London
*general principle applied to all instantaneous comms. methods –> BUT communication MUST be Clear before contract created
what happens if offeree does not comply to offeror’s specific exclusive means of Acceptance?
Holwell Securities v Hughes 1974 case facts?
- should be followed
case facts:
- offeror needed notice in writing within 6 months
- offeree posted letter but it got lost in post
Held:
- notice = stronger requirement
- offeror MUST have actual notice, no less
- postal rule DOES NOT AUTOMATICALLY apply –> on case-by-case basis
what does Felthouse v Binley 1862 say about silence as acceptance?
not allowed
case facts:
- uncle writes to nephew to buy horse for 30L 15S
- said “if no reply within 6 months it is mine at 30L 15S”
- uncle contracted to sell horse to 3rd party
Held:
- silence NOT acceptance
- no contract –> nemo dat quod non habet
what did Wilberforce say in Brinkibon Ltd v Stahag Stahl 1983 about Acceptance being communicated by Reasonable means?
case facts?
facts:
- B based in London buying steel from S based in Austria
- C/Brinkibon sent acceptance of offer via Telex to D/Stahag
- C sued for breach
issue: deal with under English or Austrian law? at what moment was contract formed?
Held:
- contracted formed in Austria –> under their law
- when Telex received in Vienna = contract created
- reaffirmed Adam v Lindsell postal rule = acceptance when letter is posted
- reaffirmed Entores = Postal Rule does NOT Apply to instant comms.
Wilberforce = NO UNIVERSAL RULE for instant. comms.
- look at intention of parties + sound business practice
what does Brodgen v Metropolitan Railway say about Communication of Acceptance by approved means?
case facts?
no acceptance = NO CONTRACT
facts:
- C/Brodgen supplied Met Railway with coal for years informally w/o written contract
- C+D decided to write up contract
- D sent draft to C
- C made minor amendments + sent back
- D filed doc but did NOT Communicate Acceptance
- C performed obligations under contract
issue: was there a contract? was written agreement valid?
Held:
- WAS Contract
- drafted contract that was amended = Offer
- Offer Accepted by D’s conduct
- C had performed their part
what does Carlill v Carbolic Smoke Ball say about Communication of Acceptance by approved means?
case facts?
no acceptance = NO CONTRACT
facts:
- D/CSBC put ad in newspaper saying anyone who bought their product but still got Influenza despite following instructions gets £100 reward
- showed sincerity by putting £100 in bank account for reward
- C/Carlill did so + still got sick + tried to claim
- D said can’t be bound as Ad = Inv. to Treat NOT Offer –> they lacked true intent, offer can’t be made “to the world”, C had not given Acceptance + Ad wording not precise + No Consideration
issue: was Ad = Inv. to Treat?
Held:
- Ad = Offer of Uni-Lateral Contract by D
- C provided Acceptance by completing conditions
- consideration = C’s use of smoke balls
- D’s claim of sincerity negated asserting lack of intent
- offer could still be made to the world
what is the rule for communication of acceptance by post?
no postal error –> Acceptance = time of posting
what is postal rule?
which case(s)?
acceptance = when letter is posted
- Adam v Lindsell
- Enotres
what does Entores case say about the time of Acceptance?
when OBJECTIVELY, the offeror ought to have apprehended acceptance
what happens if a formal agreement is conditional on some stipulated event?
NO Contract UNTIL stipulated event occurs
- UNLESS it’s waived
