Agreement (Offer + Acceptance) Flashcards
(13 cards)
What are the three key elements needed for a contract?
Agreement
Intention to create legal relations
Consideration
What is the definition of offer?
An expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed
Must consider all elements of this to distinguish from an invitation to treat
What is acceptance?
An unqualified expression of assent to the terms of an offer
What is invitation to treat?
Where one party invites another to make an offer or a willingness to take offers
An invitation to treat therefore cannot be accepted
How are adverts classed in terms of offer/invitation to treat?
- Usually regarded as invitations to treat, as they usually lack certainty of terms
- Adverts of reward are offers, accepted once condition met (supply of information) - unilateral contract
How does an auction work in the context of contracts?
Inviting bids is an invitation to treat, the bids are regarded as offers and when the hammer goes down, this is regarded as acceptance
If the hammer does not go down, there is no acceptance
However, if an item is sold or the auction is labelled ‘without reserve,’ the auctioneer is obliged to accept the highest bid.
In an auction without reserve, the auctioneer is promising to sell to the highest bidder. Such a promise amounts to an offer of a unilateral contract, which is accepted by the highest bidder upon placing their bid. By failing to accept their bid, the auctioneer has breached that unilateral contract.
- If the auctioneer does not then sell you the goods, you won’t have a claim against their owner, as there was no acceptance, but you can sue the auctioneer for damages
- Damages would be for the difference between their bid and the total value of goods they missed out on
How do tenders work in the context of contracts?
A person invites bidders to submit tenders for something (a construction contract)
These invitations to tender are not offers, but invitations to treat
The submitted tenders by bidders are regarded as offers
If the inviter accepts, a contract is created
When is acceptance deemed to have taken place?
1) Deemed to have occurred when communicated
2) Silence is not normally regarded as acceptance, however an offeree can bind itself to a contract by silence
- By saying, if you don’t hear from me by 5pm, assume we have a deal
3) There are exceptions, such as the postal rule and acceptance by conduct
What is the postal rule?
Postal rule means that acceptance is effective when posted, even if the letter is delayed if:
- It was reasonable in all circumstances to use post
- Letter was properly addressed, stamped and posted
- The offeror has not excluded this (ie by saying they must hear by a certain date)
In what ways can a offer be terminated and when must this occur?
Must terminate the offer before acceptance
Termination can occur by:
- Revocation
i) Revocation must be communicated to be effective
ii) Postal rule does not apply to revocation
iii) Offer cannot be revoked where offeree gave something in return for a promise to keep the offer open for a specified period (£5 to keep offer open for a week) - Lapse of time
- Explicit rejection by offeree
- Counteroffer
i) Requesting more information and accepting together is not a counteroffer
What is a bilateral contract?
Promise in return for a promise (promise of a car in exchange for promise of £5000)
What is a unilateral contract?
Promise in return for an act
- Promise of reward for finding a missing pet as an example
- Promise to consider all conforming tenders is unilateral
Performance of the act constitutes acceptance and consideration as well
An offer must have ‘certain’ terms to be capable of being accepted. How can the certainty of terms be determined?
Whether the contract and terms are sufficiently certain or whether it is complete enough is judged objectively:
- Look at trade practices
- Whether the parties are used to dealing
- Whether there is a long-term arrangement
