Agreement (Offer & Acceptance)

Question 1

Define: Offer

Answer 1

“An expression of willingness to contract on specified terms, made with the intention that it is to become legally binding as soon as it is accepted by the person to whom it is addressed” (Treitel)

Question 2

What are the components of a valid offer?

Answer 2

An offer must be:

1. Clear and Certain
2. Communicated to the offeree
3. Not rejected, revoked or lapsed

Question 3

What are the components of a valid acceptance?

Answer 3

Acceptance must be:

1. A mirror image of the offer
2. Made by the offeree in response to the offer
3. Communicated to the offeror

Question 4

Case authority: Language of “may” is not sufficiently clear and certain.

Answer 4

Gibson v Manchester City Council

Question 5

Case authority: Language of “will” is sufficiently clear and certain.

Answer 5

Storer v Manchester City Council

Question 6

Define: Invitation to Treat

Answer 6

An ITT is the preliminary stage in negotiations.

Question 7

Case authority: An advert is generally an ITT not an offer.

Answer 7

Partridge v Crittenden

Question 8

Case authority: A display of goods is an ITT

Answer 8

Fisher v Bell

Question 9

Case authority: Placing goods on supermarket shelves is also an ITT

Answer 9

Pharmaceutical Society of GB v Boots Cash Chemists

Question 10

Case authority: Where an advert is sufficiently clear and certain to indicate intention to be bound, and is from the product’s manufacturer (with theoretically unlimited supply), an advert may constitute an offer

Answer 10

Granger v Gough

Question 11

Case authority: An advert couched in certain language, may be an offer where it amounts to a unilateral offer.

Answer 11

Carlill v Carbolic Smoke Ball Co.

Question 12

Case authority: Invitations to Tender are not offers but simply invite others to make offers.

Answer 12

Spencer v Harding

Question 13

Case authority: Offers are made by bidders, offers are only accepted when the auctioneers hammer falls. Items may be withdrawn any time up until acceptance.

Answer 13

Payne v Cave

Question 14

Case authority: Items put up for auction “without reserve” constitute unilateral offers. (NB: Unilateral offer is with the auctioneer not the seller - claimant only entitled to damages not specific performance)

Answer 14

Barry v Davies

Question 15

Case authority: An offer must be communicated in one of 3 ways, (1) Orally, (2) in writing, or (3) by conduct.

Answer 15

Taylor v Laird

Question 16

An offer can be terminated by:

Answer 16

1. Rejection
2. Revocation
3. Lapse

Question 17

Case authority: A counter offer is a rejection followed by a new offer. The counter offer terminates the original offer.

Answer 17

Hyde v Wrench

Question 18

Case authority: Requests for further information are distinct from counter offers - the original offer remains open.

Answer 18

Stevenson, Jacques & Co v McLean

Question 19

Case authority: Revocation can happen any time before acceptance, but must be communicated.

Answer 19

Dickenson v Dodds

Question 20

Case authority: Revocation may be communicated by a 3rd party.

Answer 20

Dickenson v Dodds

Question 21

Case authority: Unilateral offer may be revoked any time before complete performance.

Answer 21

GNR v Witham

Question 22

Case authority: If one has begun to act on the terms of a unilateral offer, the offeree must be allowed time to complete performance

Answer 22

Errington v Errington & Woods

Question 23

An offer may lapse due to:

Answer 23

1. Passage of time
2. Death
3. Non-fulfilment of a condition (Financings v Stimson)

Question 24

Case authority: Acceptance must be on the exact same terms as the offer. (Mirror image rule)

Answer 24

Hyde v Wrench

Question 25

Case authority: Acceptance must be made by an offeree.

Answer 25

Boulton v Jones

Question 26

Case authority: Acceptance must be in response to an offer / while being aware of an offer

Answer 26

R v Clarke

Question 27

Case authority: Motive for acceptance is irrelevant

Answer 27

Williams v Carwardine

Question 28

Case authority: General rule - an offer must be communicated

Answer 28

Felthouse v Bindley

Question 29

Case authority: Acceptance can be communicated by a 3rd party authorised by the offeree

Answer 29

Powell v Lee

Question 30

Case authority: Acceptance by conduct is possible

Answer 30

Brogden v Metropolitan Railway

Question 31

Case authority: In unilateral offers, performance of the act constitutes acceptance

Answer 31

Carlill v Carbolic Smoke Ball Co

Question 32

Case authority: Where failure to communicate acceptance is the result of the offeror's fault, they are estopped from denying receipt.

Answer 32

Entores v Miles Far East

Question 33

Case authority: For acceptance sent by post, acceptance occurs at the moment the letter is properly posted.

Answer 33

Adams v Lindsell

Question 34

Case authority: Offeror cannot revoke their offer after the acceptance has been posted, even if he is unaware of its posting.

Answer 34

Byrne v Van Tienhoven

Question 35

Case authority: Letter must be properly posted - in a Royal Mail postbox or given to an employee authorised to receive letters.

Answer 35

Re London and Northern Bank, ex p Jones

Question 36

Case authority: Acceptance is valid, even if the letter is lost or destroyed in the post

Answer 36

Household Fire and Carriage Accident Insurance Co v Grant

Question 37

Case authority: If the letter has been incorrectly addressed then acceptance is only valid from the moment it arrives.

Answer 37

Getreide-Import Gesellschaft v Contimar

Question 38

Case authority: Postal rule does not apply where it is not reasonable to use the post (e.g. A postal strike or where there is an implied demand for speed)

Answer 38

Henthorn v Fraser

Question 39

Case authority: The postal rule does not apply where its application would cause "manifest inconvenience and absurdity"

Answer 39

Hollwell Securities v Hughes

Question 40

Case authority: Postal rule may be ousted by specifying that the acceptance will not bind until it arrives

Answer 40

Holwell Securities v Hughes

Question 41

Case authority: With instantaneous means of communication, acceptance occurs when the communication is received.

Answer 41

Encores v Miles Far East Corporation

Question 42

Case authority: If acceptance is received within office hours but the offeror does not read it, that still counts as communication as it was the offeror's fault.

Answer 42

The Brimnes

Question 43

Case authority: When defining what is meant by "office hours" the context of the parties' negotiations is relevant.

Answer 43

Thomas v BPE Solicitors

Question 44

Case authority: If acceptance is received outside of office hours, then it counts as having been received at the beginning of the next working day

Answer 44

Mondial Shipping BV v Astarte Shipping

Question 45

Case authority: Mode of acceptance may be prescribed if it is explicitly mandatory (e.g. Fax only), otherwise any equally advantageous means is acceptable.

Answer 45

Manchester Diocesian Council for Education v Commercial and General Investments

Question 46

Case authority: If the prescribed means of acceptance is for the benefit of the offeree then the offeree may waive that requirement

Answer 46

Yates Building Co v Pulleyn

Question 47

Case authority: There can only be a contract where there is mutually communicated intention by both parties to enter into legal relations.

Answer 47

Rose & Frank v Crompton Bros

Question 48

Case authority: There is a presumption that ICLR always exists in commercial arrangements.

Answer 48

Bunn & Bunn v Rees & Parker

Question 49

Case authority: There is no presumption of ICLR in social or domestic arrangements

Answer 49

Balfour v Balfour

Question 50

What are the 3 essential elements of any legally binding contract?

Answer 50

1. Consideration 2. Intention to Create Legal Relations 3. Agreement (Offer + Acceptance)