Agreement Flashcards
Offer and Acceptance (28 cards)
A seller tells a buyer that he has a car for sale and he wants £2,500 for it. The buyer asks if the car takes unleaded petrol. The seller confirms it does. The buyer says he will pay £2,200. The seller says that he needs to think about it. The buyer tells the seller that he must hear back from the seller by the end of that day and that the seller should write to him with his reply. The seller hand-delivers the buyer a letter that day saying he will sell him the car for £2,500.
Which of the following best describes why there is no contract between the seller and the buyer?
(a) The buyer’s counter-offer has extinguished the seller’s offer.
(b) The buyer has not made replying in writing a mandatory mode of acceptance.
(c) The seller has not validly accepted the buyer’s counter-offer.
(d) The buyer’s query about unleaded petrol has extinguished the seller’s offer.
(e) The seller has attempted to accept the buyer’s counter-offer by hand-delivery of a letter but this is not in a valid mode.
(c) The seller has not validly accepted the buyer’s counter-offer.
Acceptance must be unqualified and must correspond exactly with the terms of the offer (Hyde v Wrench). This is known as ‘mirror image rule.’ The buyer has prescribed a reply in writing – hand-delivery of a letter meets this requirement.
On 12 December, a buyer posts an offer to a seller to purchase the seller’s piano. The seller posts his acceptance on 16 December, but it is not received by the buyer until 20 December. On 19 December the buyer telephones the seller to enquire whether his letter has been received. The seller confirms on the telephone that it was received.
When was the contract concluded, if at all?
(a) 20 December.
(b) 16 December.
(c) 19 December.
(d) No contract has been concluded.
(e) 12 December.
(b) 16 December.
The buyer is the offeror and his offer is contained in the letter of the 12 December. Until there is a valid acceptance there is no contract. The offer is accepted and a contract completed when the seller posts the acceptance on 16 December, in accordance with the rule in Adams v Lindsell (1818). On the facts, the buyer has not ousted the rule in Adams v Lindsell by stating that the acceptance will only be binding upon receipt, therefore the contract is formed when the acceptance is posted on 16 December. The telephone call on 20 December seeking confirmation is not material.
What are the requirements of a binding contract?
(a) Offer, acceptance, and intention to create legal relations
(b) Offer and acceptance.
(c) Offer, acceptance, consideration and intention to create legal relations
(d) Offer, acceptance, agreement, and consideration
(c) Offer, acceptance, consideration and intention to create legal relations
Which of the following best describes an ‘offeree’?
(a) The person who makes an offer
(b) The person who breaches a contract
(c) The person to whom an offer is made
(d) The reasonable person
(c) The person to whom an offer is made
What approach does the court take when determining whether an agreement exists between the offeror and offeree?
(a) The court will take evidence from an expert in contract law.
(b) A subjective approach by asking the parties to explain what the intention in their minds was
(c) An objective approach, by considering what the reasonable person would say was the intention of the parties having regard to all the circumstances
(d) An objective approach by reading their written contract
(c) An objective approach, by considering what the reasonable person would say was the intention of the parties having regard to all the circumstances
What are the requirements of a valid offer?
(a) The offer must be clear, certain and supported by consideration.
(b) The offer must be clear, certain and accepted.
(c) The offer must be clear, certain and show an intention to be bound.
(d) The offer must be clear, certain and binding.
(c) The offer must be clear, certain and show an intention to be bound.
In which case did the court find a valid offer?
(a) Gibson v Manchester City Council
(b) Hyde v Wrench
(c) Storer v Manchester City Council
(d) Partridge v Crittenden
(c) Storer v Manchester City Counci
The court held that the council’s statement was a valid offer as it was clear, certain and displayed an intention to be bound.
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.
Which of the following options best describes whether the man made a valid offer to his neighbour?
(a) No, because his statement was not clear and certain about the book and price.
(b) Yes, because his statement was clear and certain about the book and price.
(c) No, because he did not mention the title of the book in his statement.
(d) No, because the statement was not clear about the price, nor did it show an intention to be bound.
(d) No, because the statement was not clear about the price, nor did it show an intention to be bound.
A valid offer must be clear and certain and display an intention to be bound. The man’s statement did not meet these requirements.
Which of the following is correct regarding a bilateral contract?
(a) Each party makes an offer to the other party.
(b) Only the party making the offer assumes an obligation.
(c) Each party assumes an obligation to the other party.
(d) The offer is accepted by performance of the required act.
(c) Each party assumes an obligation to the other party.
Which of the following is correct in relation to an invitation to treat?
(a) An invitation to treat is the final step in forming a contract
(b) An invitation to treat can be accepted to form a binding contract
(c) An invitation to treat displays an intention to be bound
(d) An invitation to treat cannot be accepted to form a binding contract
(d) An invitation to treat cannot be accepted to form a binding contract
An invitation to treat is a first step in negotiations and it is not capable of being accepted to form a binding contract.
Which of the following is not an invitation to treat?
(a) An auctioneer’s request for bids in an auction sale
(b) A car advertised for sale on a website
(c) A dress displayed for sale in a shop window
(d) A notice on a tree offering a reward for the return of a missing cat
(d) A notice on a tree offering a reward for the return of a missing cat
This is a unilateral offer
In which case did the court find there was an invitation to treat?
(a) Harvela Investments Ltd. v Royal Trust Company of Canada (CI) Ltd.
(b) Fisher v Bell
(c) Carlill v Carbolic Smoke Ball Co.
(d) Storer v Manchester City Council
(b) Fisher v Bell
The appeal court held that a display of goods with a price tag in a shop window was an invitation to treat.
The general rule that an advertisement is an invitation to treat does not apply where the advertisement amounts to a unilateral offer. What is a unilateral offer?
(a) An offer that originates from a manufacturer of goods.
(b) An offer which prescribes an act which, when performed, constitutes acceptance.
(c) An offer to one party only.
(d) An offer that is not sufficiently clear and certain.
(b) An offer which prescribes an act which, when performed, constitutes acceptance.
This is illustrated in the case Carlill v Carbolic Smoke Ball Co.
Which of the following is not a valid means of an offer terminating?
(a) Revocation
(b) Lapse
(c) Rejection
(d) Breach
(a) Revocation
Breach normally relates to the non-performance or defective performance of a contractual obligation or promise.
Which of the following is not an example of how an offer can come to an end?
(a) A request for further information
(b) By making a counter-offer
(c) Following the death of the offeree
(d) Following revocation by the offeror
(a) A request for further information
A request for further information does not change or reject the offer. The original offer remains open and capable of acceptance.
Which statement is a correct description of the difference between a counter-offer and a request for further information?
(a) A counter-offer prevents the offeree from changing their mind and accepting the original offer but a request for further information does not.
(b) A request for further information can be made by the offeree but a counter-offer cannot
(c) A request for further information terminates the original offer but a counter-offer does not.
(d) A counter-offer does not change the terms of the offer but a request for further information does.
(a) A counter-offer prevents the offeree from changing their mind and accepting the original offer but a request for further information does not.
A counter-offer has the effect of terminating the original offer and that offer cannot subsequently be accepted. A request for further information on the other hand has no effect on the original offer and that offer remains open.
Who can accept an offer?
(a) The person / people to whom the offer was made.
(b) Anyone.
(c) The person / people who have notice of the offer.
(d) The person / people capable of performing the obligations under the contract.
(a) The person / people to whom the offer was made.
If an offer is made to particular people, only those people can accept the offer.
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?
(a) It amounts to a counter offer.
(b) It amounts to request for further information.
(c) It amounts to an effective acceptance.
(a) It amounts to a counter offer.
To be an effective acceptance, the acceptance must be unqualified. This is not an unqualified acceptance because the man has introduced additional terms relating to the balls etc.
What is the meaning of the rule that acceptance must be unqualified?
(a) Only the person/people to whom the offer was made can accept the offer.
(b) The acceptance must follow the mode prescribed by the offeror.
(c) The acceptance must correspond with the offer.
(d) The acceptance must be made by words.
(c) The acceptance must correspond with the offer.
The rule is also known as the ‘mirror image rule’.
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?
(a) No, there is no contract between the farmer and the brother because the farmer did not accept the brother’s offer.
(b) Yes, there is a contract between the farmer and the brother because the brother accepted the farmer’s offer.
(c) Yes, there is a contract between the farmer and his neighbour for £40.
(d) Yes, there is a contract formed on Tuesday between the farmer and his neighbour for £50.
(a) No, there is no contract between the farmer and the brother because the farmer did not accept the brother’s offer.
Correct. The brother’s acceptance was not a valid acceptance as it was not made in response to the farmer’s offer. The brother’s statement was a valid offer which the farmer did not accept.
What is the effect of a counter-offer?
(a) The original offer remains open.
(b) The original offer can be subsequently accepted.
(c) It mirrors the terms of the original offer.
(d) The original offer is terminated.
(d) The original offer is terminated.
A counter-offer is a rejection of the original offer and it has the effect of ‘killing off’ the original offer.
Which case establishes the fact that an offeror can include terms which prescribe that a particular mode of acceptance is to be used for the acceptance to be binding?
(a) Tinn v Hoffman
(b) Carlill v Carbolic Smoke Ball
(c) Hyde v Wrench
(d) Manchester Diocesan Council for Education v Commercial and General Investments
(d) Manchester Diocesan Council for Education v Commercial and General Investments
What is the postal rule?
(a) Where acceptance is communicated by post, the contract is formed as soon as the letter of acceptance is properly posted.
(b) Where acceptance is communicated by post, the contract is formed as soon as the offeror reads the letter of acceptance.
(c) Where the revocation of an offer is communicated by post, the revocation takes effect as soon as the letter is properly posted.
(d) Where acceptance is communicated by post, the contract is formed as soon as the postman delivers the letter of acceptance to the offeror.
(a) Where acceptance is communicated by post, the contract is formed as soon as the letter of acceptance is properly posted.
This rule was laid down in Adams v Lindsell.
Which case was not concerned with communication by instantaneous means?
(a) The Brimnes
(b) Entores v Miles Far East Corporation
(c) Mondial Shipping and Chatering BV v Astarte Shipping Ltd
(d) Carlill v Carbolic Smoke Ball Co.
(d) Carlill v Carbolic Smoke Ball Co.
This case concerned a unilateral offer.
