Unit 2 -- offer and acceptance Flashcards
(19 cards)
What constitutes an offer?
An offer is an expression of willingness to contract on certain terms with the intention that it shall become binding upon acceptance.
It may be made orally, in writing, or by conduct.
It may be made to an individual, a group, or to the world.
E.g. Carlill v Carbolic Smoke Ball Co (1893)
Carlill v Carbolic Smoke Ball Co (1893)
Manufacturers made a ‘smoke ball’, and in an advertisement promised a reward of £100 to anyone who used it as directed and caught flu.
Mrs Carlill caught flu; manufacturers didn’t pay up as said that couldn’t form a contract with the whole world.
Decision was that an offer can be made to the whole world.
» unilateral contract made when Mrs Carlill catches the flu and claims the reward.
Hillas v Arcos (1932)
Agreement about sale and purchase of timber referred to “100,000 standards” and goods being “of fair specification”.
Court decided there was enough certainty of terms, as parties had previous dealings and were very familiar with the timber trade.
Nicolene v Simmonds (1953)
Where a minor term is uncertain, courts will tend to strike it out and enforce the rest of the agreement.
In this case the defendant had said “the usual conditions of acceptance apply” – court said this was meaningless, as there were no such usual conditions: term was struck out.
Scammell + Nephew v Ouston (1941)
Where a major term is uncertain and cannot be resolved, whole agreement fails.
Five different judges reached different interpretations of “on hire purchase terms”. Phrase considered too important and too vague, so whole contract void.
Invitation to treat definition and examples
Invitation for offers or to open negotiations. Whereas offers potentially give rise to liability (if accepted), invitations to treat do not.
E.g. advertisements for bilateral contracts, display of goods, auctions with reserve.
Auctions with vs without reserve
With reserve: request for bids is an invitation to treat. Bids are offers to buy; accepted with hammer.
Without reserve: auctioneer makes offer to sell; highest bidder accepts.
Gibson v Manchester City Council (1979)
Council wrote to Mr Gibson saying that it “may be prepared” to sell his house at a specified price.
Court decided this was an invitation to treat. Mr Gibson’s formal application to buy the house was an offer to buy, so the council could choose not to accept.
Pharmaceutical Society of GB v Boots (1953)
Medicines displayed on shelves. Could only be sold under supervision of pharmacist.
Court decided this was not an offer to sell – just an invitation to treat. Buyer makes an offer to buy, and acceptance then takes place under supervision of pharmacist.
Taylor v Laird (1856)
Offer must be communicated to offeree.
Ship’s captain formally resigned from his post – terminated his employment contract.
Then assisted crew in working the ship back home, but hadn’t communicated to his employers his offer to continue to work (so they couldn’t accept/reject it).
So no contract between them – employers didn’t need to pay.
Baird Textiles v Marks + Spencer (2001)
Baird had supplied clothes to M+S for 30 years. M+S cancelled their order; Baird sued as no notice.
No express contract, but Baird said it should be implied through their dealings.
Court said could not imply as not possible to assess reasonable quantities / costs / notice.
What’s the case?
Manufacturers made a ‘smoke ball’, and in an advertisement promised a reward of £100 to anyone who used it as directed and caught flu.
> > unilateral offer
Carlill v Carbolic Smoke Ball Co (1893)
What’s the case?
Agreement about sale and purchase of timber referred to “100,000 standards” and goods being “of fair specification”.
Court decided there was enough certainty of terms, as parties had previous dealings and were very familiar with the timber trade.
Hillas v Arcos (1932)
What’s the case?
Where a minor term is uncertain, courts will tend to strike it out and enforce the rest of the agreement.
In this case the defendant had said “the usual conditions of acceptance apply” – court said this was meaningless, as there were no such usual conditions: term was struck out.
Nicolene v Simmonds (1953)
What’s the case?
Where a major term is uncertain and cannot be resolved, whole agreement fails.
Five different judges reached different interpretations of “on hire purchase terms”. Phrase considered too important and too vague, so whole contract void.
Scammell + Nephew v Ouston (1941)
What’s the case?
Council wrote to householder saying that it “may be prepared” to sell his house at a specified price.
> > > Court decided this was an invitation to treat.
Gibson v Manchester City Council (1979)
What’s the case?
Medicines displayed on shelves. Could only be sold under supervision of pharmacist.
Court decided this was not an offer to sell – just an invitation to treat. Buyer makes an offer to buy, and acceptance then takes place under supervision of pharmacist.
Pharmaceutical Society of GB v Boots (1953)
What’s the case?
Offer must be communicated to offeree.
Ship’s captain formally resigned from his post – terminated his employment contract.
Then assisted crew in working the ship back home, but hadn’t communicated to his employers his offer to continue to work (so they couldn’t accept/reject it).
So no contract between them – employers didn’t need to pay.
Taylor v Laird (1856)
What’s the case?
Manufacturer had supplied clothes to retailer for 30 years. Retailer cancelled their order; manufacturer sued as no notice.
No express contract, but manufacturer said it should be implied through their dealings.
Court said could not imply as not possible to assess reasonable quantities / costs / notice.
Baird Textiles v Marks + Spencer (2001)
