Offer and Acceptance

Question 1

A valid offer must be

Answer 1

clear, certain and show an intention to be bound

Question 2

What are the requirements of a binding contract?

Answer 2

Offer, acceptance, consideration and ICLR

Question 3

Offeree

Answer 3

The person to whom an offer is made

Question 4

What approach does the court take when determining whether an agreement exists between the offeror and offeree?

Answer 4

An objective approach, by considering what the reasonable person would say was the intention of the parties having regard to all the circumstances

Question 5

an invitation to treat

Answer 5

a first step in negotiations which may or may not lead to a firm offer by one of the parties

Question 6

General rule for advertisements (Partridge v Crittenden)

Answer 6

they are regarded as statements inviting further negotiations or invitations to treat

Question 7

General rule - display of goods for sale (Fisher v Bell)

Answer 7

They are an invitation to treat

Question 8

General rule - invitation to tender (Spencer v Harding)

Answer 8

inviting parties to tender = an invitation to treat

Question 9

Exception to general rule for invitations to tender (Harvela Investments Ltd v Royal Trust Co. of Canada (CI) Ltd.)

Answer 9

If the invitation to tender expressly contains an undertaking to accept the highest or the lowest bid, the party requesting tenders has made a unilateral offer to enter into a contract with the party submitting the highest / lowest bid

Question 10

The auctioneer’s request for bids is…

Answer 10

an invitation to treat (Payne v Cave (1789))

Question 11

Acceptance of the bidder’s offer will be indicated by

Answer 11

the fall of the auctioneer’s hammer (s 57 SGA)

Question 12

When can the auctioneer be sued for breach of contract?

Answer 12

they can be sued for breach of contract in a sale without reserve if they refuse to sell to the highest bidder

Question 13

A no reserve sale constitutes what kind of contract?

Answer 13

unilateral contract

Question 14

What is the consequence in a no reserve sale if a reserve is not applied and the goods are withdrawn from sale?

Answer 14

there is a breach of this unilateral contract and the highest bona fide bidder is entitled to be compensated by the payment of damages (Barry v Davies)

Question 15

‘mirror image rule’ for acceptance

Answer 15

acceptance must correspond with the offer

Question 16

Rule on prescribed mode of acceptance

Answer 16

if the offeror prescribes a specific mode of acceptance, you have to use that method to validly accept

Question 17

Acceptance where an offer is made generally to the world at large

Answer 17

everyone with notice of the offer is an ‘offeree’, and a valid acceptance may be made by any person with notice of the offer

Question 18

Acceptance must be unqualified (Hyde v Wrench)

Answer 18

Acceptance must be unqualified and must correspond exactly with the terms of the offer

Question 19

Can you prescribe a specific mode of acceptance of an offer?

Answer 19

Yes, if the offeror makes it clear that they will not be bound unless acceptance is communicated in that precise way and by no other, only acceptance by that mode will suffice. The prescribed mode of acceptance must be mandatory to apply exclusively.

Question 20

What is required from the offeror to prescribe a specific mode of acceptance?

Answer 20

particularly clear words

Question 21

What is the meaning of the rule that acceptance must be unqualified?

Answer 21

The acceptance must correspond with the offer (eg not be a counter-offer)

Question 22

What is the effect of a counter-offer?

Answer 22

The original offer is terminated

Question 23

The postal rule applies even where the acceptance is

Answer 23

delayed or lost in the post (Household Fire and Carriage Accident Insurance Co. v Grant)

Question 24

the postal rule does not apply if

Answer 24

it is not contemplated that post would be used

Question 25

The postal rule does not apply to revocations

Answer 25

Revocation of an offer must be received to be effective [Byrne v Van Tienhoven]

Question 26

When does acceptance of an offer via postal rule take effect?

Answer 26

Acceptance takes effect from the moment the letter of acceptance is properly posted by the offeree / third party on their behalf

Question 27

Where an acceptance is made by an instantaneous mode of communication, the general rule is that

Answer 27

the acceptance takes place at the moment the acceptance is received by the offeror (Entores v Miles Far East)

Question 28

Does email fall under the postal rule?

Answer 28

No, an email must be received by the offeror to apply

Question 29

Unilateral contracts are open to acceptance by

Answer 29

performance of the acts required in the offer

Question 30

Where acceptance is communicated by post, when is the contract formed?

Answer 30

the contract is formed as soon as the letter of acceptance is properly posted

Question 31

A binding contract requires all material terms to be

Answer 31

certain and complete

Question 32

To determine whether the parties have reached an agreement on all material terms, the court applies an

Answer 32

objective test, asking whether, in all the circumstances of the case, the parties have agreed all the terms they considered to be a precondition to creating legal relations

Question 33

the courts will not enforce an agreement if it is too

Answer 33

vague or ambiguous. However, this is seen as a last resort and the courts will look to enforce the agreement, reflecting the intentions of the parties, where possible.