WEEK 2 LECTURE 1 - OFFER + ACCEPTANCE

Question 1

what happened in Smith v Hughes 1871

Answer 1

• 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

Question 2

what’s the reasoning behind Smith v Hughes judgement

Answer 2

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

Question 3

what is the Objectivity Test from RTS Flexible Systems v Molkerei Alois Muller 2010?

Answer 3

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

Question 4

why can Objective Test cause difficulties?
which case does this relate to?

Answer 4

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?

Question 5

what’s Wilberforce’s resolution to dangers in Formalism in Brinkibon 1982?

Answer 5

every case must be resolved differently based on Objective intentions

Question 6

when is there intention to create legal relations?
which case is relevant?

Answer 6

in commercial settings
Esso Petroleum v CE 1976

Question 7

what is an offer?
what if there is NO offer?

Answer 7

• expression of Objective willingness to contract on sufficiently specified terms
• NO offer = Invitation to Treat

Question 8

in terms of Offer + Invitation to Treat, why was it held not to be an Offer in Gibson v Manchester City Council 1974?

Answer 8

• 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

Question 9

what does Pharmaceutical Soc. v Boots 1952 say about Offer vs. Invitation to Treat

Answer 9

• goods on shelves = Inv. to Treat
• customer arriving at till = Offer
• payment taken + accepted = contract completed

Question 10

what does Harris v Nickerson 1873 say about Auctions and Offers vs Inv. to Treat

Answer 10

• auction = ITT by seller via auctioneer
• bidding = offer
• auctioneer brings hammer down = acceptance

Question 11

what happens if an offer is validly revoked before acceptance?

Answer 11

nothing to accept

Question 12

what does Bryne v Van Tienhoven 1880 say about Revocation of Offers?
facts of the case?

Answer 12

• 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

Question 13

what does Dickinson v Dodds 1876 say about Revocation + 3rd Parties?

Answer 13

hearing of a revocation from a 3rd party = sufficient

Question 14

what happens if Counteroffer made to Offer?

Answer 14

• original offer extinguished
• CO treated as new offer

Question 15

what does Hyde v Wrench 1840 say about Counter Offers?
case facts?

Answer 15

• 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

Question 16

what happens to an offer if a mere inquiry is asked?

Answer 16

original offer remains open

Question 17

what does Stephenson, Jacques v Maclean 1880 say about Inquiries and Offers?
case facts?

Answer 17

• inquiry was “Could we deliver over 2 months?”
• no response = Enquirer could VALIDLY accept Original Offer Open

Question 18

what does Day Morris v Voyce 2003 say about Purported (unclear) Acceptance?
case facts?

Answer 18

“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

Question 19

what is the rule from Entores v Miles Far East 1955 on Communciation of Acceptance?
case facts?

Answer 19

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

Question 20

what happens if offeree does not comply to offeror’s specific exclusive means of Acceptance?
Holwell Securities v Hughes 1974 case facts?

Answer 20

• 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

Question 21

what does Felthouse v Binley 1862 say about silence as acceptance?

Answer 21

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

Question 22

what did Wilberforce say in Brinkibon Ltd v Stahag Stahl 1983 about Acceptance being communicated by Reasonable means?
case facts?

Answer 22

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

Question 23

what does Brodgen v Metropolitan Railway say about Communication of Acceptance by approved means?
case facts?

Answer 23

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

Question 24

what does Carlill v Carbolic Smoke Ball say about Communication of Acceptance by approved means?
case facts?

Answer 24

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

Question 25

what is the rule for communication of acceptance by post?

Answer 25

no postal error –> Acceptance = time of posting

Question 26

what is postal rule?
which case(s)?

Answer 26

acceptance = when letter is posted
- Adam v Lindsell
- Enotres

Question 27

what does Entores case say about the time of Acceptance?

Answer 27

when OBJECTIVELY, the offeror ought to have apprehended acceptance

Question 28

what happens if a formal agreement is conditional on some stipulated event?

Answer 28

NO Contract UNTIL stipulated event occurs
- UNLESS it’s waived