Contract - Offer and Acceptance

Question 1

Contract

Answer 1

A contract is a legally binding agreement between two or more parties which is essentially commercial in nature. Not all agreements are considered legally binding. For an agreement to be considered legally binding, the parties must intend legal consequences to follow their actions.

Question 2

Offer

Answer 2

An offer may be defined as a clear statement of the terms on which the offeror is prepared to do business with the offeree. An offer may be bilateral (i.e. a promise made in return for a promise) or unilateral (i.e. a promise made in return for the completion of a specified act).

Question 3

Acceptance

Answer 3

This is an agreement to be bound by all the terms of the offer.

Question 4

Gunthing v Lynn

Answer 4

Have clearly stated terms (it must be definite)

Question 5

Carlill v Carbolic Smoke Ball
Co. Ltd.

Answer 5

The offeror must have an intention to do business

Question 6

Hyde v Wrench

Answer 6

Be exactly on the same terms of the offer and must not be varied otherwise it would be considered a counter offer

Question 7

Powell v Lee

Answer 7

Be communicated in the manner implied or expressed in the offer and this may be
verbal, in writing or by conduct

Question 8

Postal Rule

Answer 8

Adams v Lindsell & Household Insurance v Grant

Question 9

Notice in Writing

Answer 9

Holwell Securities v Hughes

Question 10

Elements of an Offer

Answer 10

1. Have clearly stated terms (it must be definite) Gunthing v Lynn
2. The offeror must have an intention to do business Carlill v Carbolic Smoke Ball
   Co. Ltd.
3. The offer must be communicated

Question 11

Elements of an Acceptance

Answer 11

1. Be exactly on the same terms of the offer and must not be varied otherwise it would be considered a counter offer – Hyde v Wrench
2. Be certain and definite
3. Be communicated in the manner implied or expressed in the offer and this may be
verbal, in writing or by conduct –Powell v Lee, Brogden v Metropolitan
Railway, Entores v Miles Far East Corp.

Question 12

Termination of contract - By refusal and counter offer

Answer 12

Hyde v Wrench

Question 13

Termination of contract - By refusal and counter offer

Answer 13

Stevenson v McLean

Question 14

Termination of contract - By lapse of time

Answer 14

Ramsgate Hotel v Montefiore

Question 15

Termination of contract - By revocation

Answer 15

Dickinson v Dodds

Question 16

Routledge v Grant c.f. Dickenson v. Dodds

Answer 16

The effect of a promise to keep the offer open for a certain time or to give someone the right of first refusal- This will not be legally binding unless the offeree gave some payment to the offeror in return for the promise

Question 17

Brogden v Metropolitan
Railway, Entores v Miles Far East Corp.

Answer 17

Alt. for: Be communicated in the manner implied or expressed in the offer and this may be
verbal, in writing or by conduct

Question 18

Silence does not mean consent

Answer 18

Felthouse v Bindley

Question 19

Blackpool v Blackpool Council

Answer 19

Invitation to submit tenders are generally considered invitation to treat, although it may also be considered an offer by the advertisers to consider any offer submitted to them.

Question 20

Elements of Consideration

Answer 20

1. Must not be passed
2. Must move form promisee to promisor
3. Must be suffiraient but need not be adequate
4. Must not be illegal or vague

Question 21

Consideration (definition)

Answer 21

Benefit to one party or a detriment to the other parts (Currie v Misa)

Or

Price one party pays for the act or promise of the other party (Dunlop v Selfridge)