Acceptance

Question 1

What are the three elements that MUST be present for a binding contract

Answer 1

(1) Offer and Acceptance
(2) Intention to create legal relations
(3) Consideration

Question 2

Who is the offeror?

Answer 2

The person making the offer

Question 3

Who is the Offeree

Answer 3

The person to whom the offer is made

Question 4

For “offer and acceptance” to take place what two elements must occur?

Answer 4

(1) The offeror needs to make a clear and certain offer displaying an intention to be bound
(2) the offeree needs to communicate an unequivocal acceptance

Question 5

What test does the court use to determine “agreement”?

Answer 5

Objective - What a reasonable person would say was the intention of the parties, having regard to all the circumstances

Question 6

What elements must an offer have?

Answer 6

It must be clear and certain (Gibson v Manchester City Council)
AND
must show an intention to be legally bound (Storer v Manchester City Council)

Question 7

What are the two kinds of contract?

Answer 7

Unilateral and bilateral

Question 8

What is a bilateral contract?

Answer 8

Each party assumes and obligation to the other party by making a promise to do something

Question 9

What is a unilateral contact?

Answer 9

Where one party makes an offer or proposal in terms which call for an act to be performed by one or more other parties.

Question 10

What is an example of a unilateral contract?

Answer 10

Specific lost property in exchange for a reward

Question 11

How does the offeree demonstrate acceptance of a unilateral offer

Answer 11

Actual performance of the required act.

Question 12

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. Did the man make a valid offer to his neighbour?

Answer 12

No, because the statement was not clear about the price, nor did it show an intention to be bound.

Question 13

Define an invitation to treat

Answer 13

Usually - an invitation to make an offer

Question 14

What is the difference between an offer and an invitation to treat

Answer 14

An invitation to treat usually takes the form of an invitation to make an offer.
An offer is an undertaking to be contractual bound by the terms of that offer in the event of an unconditional acceptance being made.

Question 15

Can an invitation to treat be accepted to form a binding contract?

Answer 15

No.

Question 16

Are advertisements regarded as offers or invitations to treat?

Answer 16

Invitations to treat (Partridge v Crittenden)

Question 17

Are display of goods for sale an offer or an invitation to treat?

Answer 17

Invitation to treat (Fisher v Bell)

Question 18

If a shop’s display of goods for sale expressly describes those good as an “offer” is this considered an offer or invitation to treat?

Answer 18

Invitation to treat - if it was an offer then the trader would be obliged to sell the goods to anyone who accepted the offer even if underage etc.

Question 19

Are goods displayed on the shelves of a self-service store an offer or invitation to treat?

Answer 19

Invitation to treat (Pharmaceutical Society of GB v Boots Cash Chemists)

Question 20

Are websites an offer or invitation to treat?

Answer 20

Invitation to treat

Question 21

Are invitations to tender an offer or invitation to treat?

Answer 21

Generally deemed as an invitation to treat (Spencer v Harding) as the requestor can accept or reject any tender

Question 22

If an invitation to tender expressly contains an undertaking to accept the highest or lowest bid - is this an offer or invitation to treat?

Answer 22

This is an offer (Harvey Investments Ltd v Royal Trust Co. of Canada)

Question 23

If an invitation to tender expressly contains an undertaking to accept the highest or lowest bid - is this a bilateral or unilateral contact?

Answer 23

Unilateral contract - the required act is to make the highest or lowest bid, once done the other party is bound.

Question 24

Which three circumstances are an example of where an invitation to tender could give rise to a binding contractual obligation to consider tenders?

Answer 24

(1) the tenders had been solicited from specified parties who were known to the requesting party;
(2) there was an absolute deadline for submission
(3) the party requesting tenders had laid down absolute and non-negotiable conditions for submissions.

Question 25

Are auctioneer's requests for bids an invitation to treat or an offer?

Answer 25

Generally invitation to treat (Payne v Cave)

Question 26

In an auction - when does the acceptance of a bidder's offer occur?

Answer 26

The fall of the auctioneer's hammer

Question 27

At what point can the bidder revoke their offer in an auction?

Answer 27

Up until the fall of the auctioneer's hammer

Question 28

What is an auction without reserve?

Answer 28

An auction where the seller promises to sell to the highest bidder whatever the bid turns out to be.

Question 29

If the auction is without reserver, what may happen if the auctioneer refuses to sell to the highest bona fide bidder?

Answer 29

The auctioneer may be sued for breach of contract (Warlow v Harrison)

Question 30

What are the three ways an offer can be terminated?

Answer 30

(1) Rejection (2) Lapse (3) Revocation

Question 31

When does a rejection take effect?

Answer 31

When it is actually communicated to the offeror.

Question 32

If an offeree makes a counter-offer what happens to the original offer?

Answer 32

It is deemed to have been reject and cannot be subsequently accepted (Hyde v Wrench)

Question 33

If the standard terms of an offeror and the standard terms of the offeree are different when an offer is accepted what occurs?

Answer 33

The offeree has made a counteroffer

Question 33

What could constitute a request for further information

Answer 33

(1) a clarification of the extent and terms of the offer (2) ascertaining whether the offeror would consent to changing certain ancillary aspects of the offer

Question 34

What are the two ways an offer may lapse?

Answer 34

(1) passage of time (2) death of one of the parties

Question 35

Is a request for information a rejection?

Answer 35

No.

Question 36

What are the two circumstances through which an offer will lapse through passage of time.

Answer 36

(1) where acceptance is not made within the period prescribed by the offeror (2) where no period is prescribed and acceptance is no made within a reasonable time.

Question 37

If the offeror dies what happens to the offer?

Answer 37

(1) if the offeree knows that the offeror has died the offer will lapse; (2) if the offeree is unaware of the offeror's death it probably will not.

Question 38

If the offeree dies what happens to the offer?

Answer 38

the offer will lapse so it cannot be accepted by the offeree's representatives.

Question 39

When can an offer be revoked up until?

Answer 39

Acceptance

Question 40

When is revocation of an offer effective?

Answer 40

Upon actual notice of it reaching the offeree

Question 41

If revocation is communicated by post when does it take effect?

Answer 41

The moment it is received by the offeree and not from the time of posting (Byrne v Van Tienhoven)

Question 42

Does revocation have to be communicated directly?

Answer 42

No, as long as the offeror has shown, by words or conduct, a clear intention to revoke their offer and notice has reached the offeree

Question 43

Can revocation be communicated by a third party?

Answer 43

Yes (Dickinson v Dodds)

Question 44

Is it possible to revoke a unilateral offer?

Answer 44

Generally - it is possible to revoke the offer at any time prior to the completion of the required act (Great Northern Railway Company v Witham)

Question 45

What is the exception to the rule that is is possible to revoke a unilateral offer?

Answer 45

If the offeree has partly performed the obligation and is willing and able to complete.

Question 46

True or false - If you overhear an offer being made to someone, you can accept this?

Answer 46

False - only the person/people to whom an offer is made can accept an offer.

Question 46

What are the four elements required for acceptance?

Answer 46

(1) Must be in response to the offer (2) Must be unqualified (3) May be necessary to follow a prescribed mode of acceptance (4) Must be communicated

Question 47

If an offer is made generally to the world at large who can accept the offer?

Answer 47

Anyone with notice of the offer (Carlill v Carbolic Smoke Ball Co.)

Question 48

What is 'the mirror image rule'?

Answer 48

Acceptance must be unqualified and must corresponded exactly with the terms of the offer.

Question 49

If an assent is qualified is this considered to be acceptance?

Answer 49

No

Question 50

How can acceptance be communicated?

Answer 50

In any manner whatsoever unless - in some cases - the offeror prescribes a mode of acceptance

Question 51

What must the offeror do to prescribe a mode of acceptance?

Answer 51

Must use clear words to shows that only acceptance in that mode shall be binding.

Question 52

If the prescribed mode is not made mandatory how can the offeree accept?

Answer 52

In a no less advantageous mode than the prescribed mode (Tinn v Hoffman)

Question 53

A woman offers by email to sell her snooker table to a man for £3,500. The man replies that he is happy to pay £3,500 for the snooker table but wants the cues, balls and framed O'Sullivan picture included for that price. The woman is happy to go ahead with that suggestion. What is the effect of the man's reply?

Answer 53

It is a counter offer

Question 54

A farmer telephones his neighbour on Monday and offers to sell him three ducks for £50. The neighbour responds that he will pay £40 for the ducks. Later that evening, the neighbour informs his brother of the farmer’s offer. The brother immediately telephones the farmer and informs him that he accepts the farmer’s offer. On Tuesday morning, the neighbour telephones the farmer and says he has changed his mind and he accepts the offer of £50. Is there a contract formed?

Answer 54

No, there is no contract between the farmer and the brother because the farmer did not accept the brother’s offer.

Question 55

Can an offer be accepted if the offeree intended to accept but did not communicate that intention to the offeror.

Answer 55

No. Mere mental assent is not sufficient

Question 56

Can the offeror stipulate that silence will be acceptance?

Answer 56

No. Silence cannot amount to acceptance.

Question 57

If communication is made by a third party, when will a contract arise?

Answer 57

When the third party accepts the offer with the authority of the offeree.

Question 58

What is the postal rule (Adams v Lindsell)?

Answer 58

Where post is deemed to be a proper means of communication, acceptance takes effect from the moment the letter of acceptance is properly posted.

Question 59

TRUE OR FALSE - The postal rule applies even where the acceptance is delayed or lost in the post

Answer 59

TRUE (Household Fire and Carriage Accident Insurance Co. v Grant)

Question 60

When is a letter considered to be properly posted?

Answer 60

When it is put into an official letter box or into the hands of a postoperative who is authorised to RECEIVE letters.

Question 61

Will the postal rule apply if is is not contemplated that post would be used?

Answer 61

No. It must be contemplated that the post would be used.

Question 62

If there is an implied condition that prompt acceptance is required is it reasonable to use the post.

Answer 62

No. It has been held this is unreasonable.

Question 63

Does the postal rule apply to both letters of acceptance and letters revoking an offer.

Answer 63

No. The rule only applies to letters of acceptance. Revocation of an offer must be received in order to be effective.

Question 64

Does the postal rule apply if the letter of acceptance is incorrectly addressed?

Answer 64

No. The offeree has lost the benefit of the postal rule by their own carelessness.

Question 65

If the offer stipulates that 'notice in writing' is required, what does this mean?

Answer 65

This implies that acceptance has to be RECEIVED and the postal rule is set aside.

Question 66

If an acceptance is made by an instantaneous mode of communication, when does acceptance take place?

Answer 66

The moment the acceptance is RECEIVED (Entores v Miles Far East Corporation)

Question 67

In the case of instantaneous communication, if the message of acceptance is not received without any fault on the part of the offeror, will the contract be concluded?

Answer 67

No.

Question 68

If the offeree reasonably believes that they have communicated their acceptance but this is not so due to the offeror, has a contract been formed.

Answer 68

Yes - they may be prevented from saying that they did not receive the acceptance.

Question 69

Does the postal rule apply to emails?

Answer 69

No. Acceptance by email is effective once received.

Question 70

If an instantaneous communication is sent during ordinary office house, when is it deemed accepted?

Answer 70

Once received.

Question 71

If an instantaneous communication is sent outside of ordinary office house, when is it deemed accepted?

Answer 71

The next business day.

Question 72

Does communication of acceptance apply to a unilateral contract?

Answer 72

No. Performance is sufficient itself.

Question 73

When can a court enforce the agreement?

Answer 73

When all material terms are certain and complete.

Question 74

What test does the court apply to determine whether the parties have reached an agreement on all material terms?

Answer 74

An objective test

Question 75

What do the courts do if an agreement lacks certainty?

Answer 75

The courts will look to enforce the agreement, reflecting the intentions of the parties if possible.

Question 76

Will the court readily strike down an agreement if it lacks certainty?

Answer 76

No - the court will strike down an agreement as a last resort