lecture two Flashcards
Consensus in idem
A contract is formed only when the parties agree on the essential terms, known as consensus ad idem—a meeting of minds on key terms.
Muirhead and Turnbull v Dickson
In Muirhead and Turnbull v Dickson (1905), Lord Dunedin stated contracts are formed by actions, not private thoughts.
Mathieson Gee Ltd. v Quigley
In Mathieson Gee Ltd. v Quigley (1952), despite clear letters, the parties had different contract terms in mind, so no agreement existed.
What if the contract is one of sale?
The goods or land must be identified, and a price must be agreed.
Does the price always need to be agreed in a sale contract?
No, under s.8 of the Sale of Goods Act 1979, the court can set a reasonable price if not agreed.
How is the subject-matter of sale identified?
For fungible goods like sugar, identification may be by class, but for heritable property (land/buildings), more detailed identification is needed (Bogie v Forestry Commission 2002).
What are the essential terms of a lease?
The property to be leased, the rent, and the duration of the lease, with possible additional terms like rent reviews or purchase options.
Offer and acceptance analysis
‘An offer accepted is a contract, because it is the deed of two, the offeror and the acceptor’ (Stair, Institutions, I.10.6)
offer
An offer is “a statement of terms which the offeror proposes to the offeree as the basis of an agreement” (15 Stair Memorial Encyclopedia, para 62)
for an offer to be valid
- must contemplate that an unqualified acceptance of it will create legally binding obligations (William Lippe Architects Ltd v Innes
- Offer must be communicated to the offeree (Thomson v James)
- can only be accepted by that particular person: see Fleming Buildings Ltd. v Forres
- An offer, once made, can be revoked at any time before the offeree’s acceptance is communicated McMillan v Caldwell
- If a time limit is set for accepting the offer then the offer will lapse on expiry: Flaws v International Oil Pollution Compensation Fund
- offer will lapse after a ‘reasonable’ period of time has passed: Glasgow Steam Shipping Co. v Watson
- If you promise to keep an offer open for a certain time, you will be held to that promise – obviously! See Paterson Ltd. v Highland Railway Co.
Things which are not an offer:
(i) A unilateral promise (remember – no acceptance needed here).
(ii) Replies to a request for information or an enquiry as to willingness to sell (Harvey v Facey [1893] A.C. 552)
(iii) Party recapping its negotiating position (Glasgow City Council v Smith [2015] CSOH 143)
Is the display of goods in a shop window an offer?
No, it is likely an ITT (see Fisher v Bell [1961]).
Are goods displayed on a supermarket shelf considered an offer?
They are likely an ITT (see Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953]).
Are automated machines or vending machines offers?
They are probably a standing offer, not an ITT (see Thornton v Shoe Lane Parking [1971]).
Are advertisements considered offers?
Advertisements are generally presumed to be ITTs, even if they call themselves offers or quote a price (see Fenwick v Macdonald Fraser & Co Ltd [1904]).
Can an advertisement ever be an offer?
Yes, exceptionally, it can be an offer, as shown in Carlill v Carbolic Smoke Ball Co. [1893], where the court treated it as an offer to the public.
engagement stage
According to Stair, obligations are only formed at the “engagement” stage. Desire resolution engagement
postal rule
The postal rule states that an acceptance is effective when posted, not when received by the offeror (Jacobsen Sons v Underwood and Son Ltd. 1894)
This prevents the offeror from withdrawing the offer once the acceptance is posted (Thomson v James 1855).
postal rule application
The rule applies only to postal acceptances, not to offers or withdrawals (Carmarthen Developments Ltd. v Pennington
what happens after a qualified acceptance?
The qualified acceptance/counter-offer itself becomes an offer that is open to acceptance – ie. the offeree switches positions and becomes the offeror.
(Wolf & Wolf v Forfar Potato Co 1984 S.L.T. 100)
