Offer, Acceptance, Certainty & Intention Flashcards
(16 cards)
What is an offer vs an invitation to treat?
- Offer: Expression of willingness to contract on specific terms and to be bound by it
- Invitation to treat: Expression of willingness to negotiate, not intended to be bound by it
What is acceptance?
The final expression of assent to the exact terms of an offer, acceptance & offer must coincide (meeting of the minds). Confirmed that there still needs to be offer and acceptance in Gibson v Manchester CC
What is the mirror image rule?
Original offer must not be changed or met with a counter offer, must be a meeting of minds. This may be used to find that there has been a contract formed if there is a ‘battle of forms’
* Lord Denning in Butler v Ex-Cello suggested this was out of date, instead we should look at all correspodence between the parties to determine whether they have agreed on all material points. The judge may have to reconcile different terms if possible and, if not, imply terms
What is a bilateral contract vs a unilateral contract?
- Unilateral contracts have a promise in exchange for the performance of an action, they are open to multiple people / anyway to complete, the other party only has to do something when the action has been performed
- Bilateral contracts involve two parties exchange promises between them for specifics acts and obligations towards one another
Using cases, give examples of invitations to treat
- Goods on display (PSGB v Boots)
- Advertisements (Partridge v Crittenden) UNLESS they make a promise in relation to a product forming a unilateral contract (Carlill v Carbolic Smoke Ball)
- Merely stating a price (Gibson v MCC)
What is the position of the law in cases of tenders?
General rule is that a tender is an invitation to negogiate but not an offer
* HOWEVER, per Blackpool & Fylde Aero Club v Blackpool BC, where tenders are solicited from select parties and prescribe a clear, orderly and familiar procedure, if the invitee submits a conforming tender before the deadline he is entitled that this be considered
* Harvela v Royal Trust, invitation to tender can amount to an offer where it states it will accept the highest offer. A referential bid is not a valid acceptance, purpose of the offer would be deafted by this
What two things must acceptance be?
- Unconditional, there must be no attempt to change the offer
- Communicated, silence is not enough (Felthouse v Bindley)
What is the postal rule?
If acceptance is made by post, acceptance is effective once the letter is sent, NOT when it is received (Household Fire Insurance v Grant)
When will the postal rule not apply?
- Revocation of an offer (Byrne v Van Tienhoven)
- Instanenous methods of communication such as telex or email, Entores v Miles Far East Corp (but where there is fault on part of the offeror in not receiving he must accept it)
- HOWEVER, Brinkibon where the risk of non-delivery of acceptance lies with the offeror, he is bound by acceptance even if not received
- Where the contract expressly excludes use of the postal rule (Holwell Securities v Hughes)
What is the rule if acceptance has been prescribed to a particular form?
- If the form of acceptance is mandatory then acceptance in a different form will not be effective
- However, if not mandatory and the method adopted is no less advantageous then it may be effective per Manchester Diocesan Council for Education v Commercial and General Investments
In what other ways can acceptance be done?
- By conduct (Brogden v Metropolitan Railway)
- Acceptance can occur without knowledge of the offer (Gibbons v Proctor) HOWEVER, note this is weak authority, could distinguish given that before the information reached the relevant person he became aware of the offer
What is meant by ‘Battle of the Forms’?
Butler Machines v Ex-Cello Corp: The last terms that are agreed upon without objection will form the contract, it does not matter who made the original offer, follows the mirror principle
What does the case law on revocation of an offer demonstrate?
- Byrne & Co v Van Tienhoven: Revocation of an offer must be communicated before it is accepted
- Dickinson v Dodds: It did not matter that termination was communicated by a third party
- Errington v Errington: Unilateral contract is accepted and cannot be revoked once the offeree entered on performance
What is certainty?
- Terms of a contract must be clear, specific and unambigious so that both parties are aware of the obligation they are under
- British Steel Corp: Letters of intent are not binding where negotiation for key terms is ongoing
- Walford v Miles: Agreement to negogiate in good faith is not certain enough. An agreement to not to negotiate with other people will be enforceable when it specifies an end date (negative obligation)
What is the assumption in cases with an intention to create legal relations?
- Social & family agreements are often assumed to not have an intention to create legal relations (Balfour v Balfour)
- The opposite is presumed in a business setting (Esso Petroleum v Customs & Excise)
- RTS Flexible Systems: Whether there is a intention to create legal relations is to be inferred objectively based on the expectations of reasonable honest businessmen
What does the case of Blue v Ashley show?
Language of an offer can be used without expressing a genuine willingness to be bound, assume that parties do not intend to create legal relations for statements in social context, with vague langauge, in anger or jest
