OFFER AND ACCEPTANCE

A party who wishes to establish that a legally bnding contract have been formed between himself and another party must prove a number of matters: o The first is that the parties have reached agreement; normally done by showing that one party has made and offer and the other has accepted it. o Secondly, the agreement must be expressed in a form that is sufficiently certain for the court to be able to enforce. o Thirdly, the agreement must be supported by consideration. o Fourthly, the law may only recognize the validity of the agreement if it is entered into in a particular form. o Finally, the parties must have intention to create legal relations. This intention is presumed in commercial transactions but in the case of domestic and social agreements the law initially presumes that the parties did not intend to be bound by their agreement. So is intention subjective or objective? The general rule is that the existence and content of an agreement are objective questions that must be answered by reference to the intention of the parties, objectively ascertained. This objectivity raises three issues: o The first relates to the justification for the adoption of an objective approach. If contract is about the enforcement of promises voluntarily made, why does the law not place primary emphasis on the subjective intention of the parties? The reasons for a subjective approach are, primarily, the need to encourage certainty in commercial transactions and the desire to avoid the evidential difficulties associated with an inquiry into the actual state of mind of a party to the contract. It also protects the performance interest of the party who acquired oin good faith the other partys promise while being unaware that the promise is not in accord with the genuine will of the party who made it. o The second issue relates to the definition or the scope of this objective theory of contract. o The third issue relates to the role of the sibjective intentions of the parties to the contract. Are they irrelevant or do they have some residual significance? Cases in which it has been argued that the courts have resorted to a subjective approach are cases in which one party attempts to snap up an offer which she knows the other party did not intend, and where one party was at failt in not eealizing that the other party had made a mistake.

Smith v Hughes Mr Hughes was a racehorse trainer. Mr Smith brought him a sample of oats, and Hughes ordered forty to fifty quarters of oats at 34 shillings a quarter. Sixteen quarters were sent to start with. But when they arrived, Hughes said they were not the oats he thought they were. He had apparently wanted rolled oats (which are the only ones racehorses can eat), and he was getting new, green oats. In fact, Smith's sample was of green oats. Hughes refused to pay and Smith sued for breach of contract, for the amount delivered and for damages for the amount for oats that were still to be delivered. The jury at the County Court of Surrey holden at Epsom, initially held for Mr Hughes that there was a mistake on his part, but were directed by the judge that if Mr Hughes was under a mistake about the oats (thinking they were old when they were green oats) and Mr Smith had known it, they should find in Mr Hughes' favour. Mr Smith appealed. Mr Smith was held to be under no duty to inform Mr Hughes of his possible mistake about the kind of oats, reaffirming the old idea of caveat emptor (buyer beware).[2] A unilateral mistake is therefore in principle no ground for rescission of a contract.[3] Cockburn CJ gave the first judgment. "If, whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party's terms."

Smith was decided at a time when juries were still in common use in civil disputes.

If the acceptance contains terms which differ from those contained in the offer, it is not treated by the courts as an acceptance but as a counter-offer. Thus, far from amounting to an acceptance of the offer, a counter-offer operates as a rejection of the terms contained in the original offer and is instead a fresh offer to be bound on the new terms put forward.

General Application - The offer and acceptance rules urport to be of general application; that is to say, they are applicable to all contracts and not just to some. - The supposed universality of these rules is, in itself, a source of difficulty; contracts are made in very different ways. - Contracts can be made in writing or orally; letter, fax, phone etc. Further the contract between the parties may be bilateral or unilateral in nature. - Indeed there are relatively simple situations in which the findin of an enforceable contract cannot be equated satisfactorily with offer and acceptance: The Satania. - Having such difficulties in mind, Lord Denning suggested that the sole test should be whether the parties have reached agreement rather than forcing the facts into the template of offer and acceptance. - However, this approach was rejected by the HoL in Gibson, and it is arguable that its adoption would substitute uncertainty for the prescriptive rigidity, yet comparitive predictability of offer and acceptance.

The Satania Both the plaintiff and the defendant entered their yachts into a regatta. In doing so they agreed to be bound by the sailing rules of the Yacht Racing Association. One of these rules provuded tgat the owner of any yacht disobeying or infringing any of these rules shall be liable for all damages arising therefrom. In breach of one of the rules, the defendants yacht ran into and sank the plaintiffs yacht. The collision occurred without fault on behalf of the defendant. It was held that the parties had accepted a contractual obligation not to disobey the sailing rules with the result that the defendant was liable to the plaintiff for the loss suffered as a result of the breach and, further, that the effect of the agreement between the parties was to displace the limitation on liability which would otherwise have been appplicable as a sresult of the application of a statutory provision. It is important to remember that the issue in this case was between two of the competitors and the question for the court was one that related to the terms of the contract concluded betwee the competitors. How was this contract formed? No clear answer can be given. A contract is concluded if: o the parties intend to be legally bound, and o they reach a sufficient agreement without any further requirement. As a general rule, an offer can be revoked at any time before it is accepted. It has been argued that the rules of contract law attach undue significance to the precise moment in time at which the contract between parties was concluded. The offer and acceptance model, it is argued, does not capture the dynamic nature of the relationship between the parties. The formation of contract today is analysed in terms of foffer and acceptance, an intention to creat legal relations and the doctrine of consideration. If these requirements are satisfied there is a contract and this gives rise to rights in the contracting parties for whose violation the law provides remedies in the form of actions ofor damages, injunctions, and decrees of specific performance.

Has an Offer been made? - The first question to be answered when deciding whether or not a contract has been concluded is whether or not an offer was made. The existence or otherwise of an offer will depend upon

the intention of the party alleged to have made the offer. Did he intend to be bound by the terms that he has proposed to the other party or not? If he did, then the statement is likely to be an offer. If he did not, then it is likely that he has not made an offer but simply expressed a willingness to negotiate on the terms proposed. o However, the courts are not generally concerned to ascertain the subjective intention of the party alleged to have made the offer. A judge cannot establish what was actually taking palce in the minds of the parties. Rather he will examine the intention of the party alleged to have made the offer, as that intention appears to others. In other words the courts look at the objective intention of the parties, not their subjective intention. o The second point to be made is that the party making the statement alleged to constitute the offer may not have had in mind the distinction between an offer and an expression of a willingness to negaotiate when making his statement. In such a case the court must endeavour to ascertain as best it can the intention of the party who made the statement. Harvey v Facey Plaintiff sent telegraph saying will you sell us Bumper Hall Pen? Telegraph lowest cash price. The defendant replied Lowest cash price for Bumper Hall Pen 900. This was held not to constitute an offer, it was an invitation to negotiate. The next telegraph sent by the plaintiffs was held to be the offer. Gibson Defendants statement that they may be prepared to sell was considered by the HoL to consitute an invitation to treat.

Advertisements The general rule applicable to advertisements is that, at least in the case of bilateral contracts, an advert constitutes an invitation to negotiate and not an offer. The principle reason for this is said to be the need to protect the party placing the advertisement from incurring a liability in contract to every person who is willing to purchase the goods at the stipulated price: Partridge v Crittenden. The conclusion that an avertisement is an invitation to negotiate is not, however, an invariable one. Cases can be found in which the courts have concluded that an advertisement is an offer and not an invitation to negotiate. The leading case on this is Carlill v Carbolic Smoke Ball Company. It is one of unilateral contract; the inference that an afvert is an offer rather than an invitation to negotiate will often be more readily drawn in the context of a unilateral contract.

Carlill v Carbolic Smoke Ball Company An advert was held to be an offer because the clarity of its wording, linked with an intention to be bound as evidenced by the deposit of money with the bank, demonstrated the required degree of intent and specificity. Among the reasons given by the three judges were (1) that the advert was a unilateral offer to all the world (2) that satisfying conditions for using the smokeball constituted acceptance of the offer (3) that purchasing or merely using the smokeball constituted good consideration, because it was a distinct detriment incurred at the behest of the company and, furthermore, more people buying smokeballs by relying on the advert was a clear benefit to Carbolic (4) that the company's claim that 1000 was deposited at the Alliance Bank showed the serious intention to be legally bound. The general rule is that an acceptance, to be valid, must must communicated to the party who made the offer. This rule was held not to be applicable to Mrs Carlill because the terms of the offer demonstrated that the need for communication had been waived by the defendants. Another general rule is that an offer cannot be revoked once it has been accepted. But if acceptance does not take place until the completion of the course then the defendants may be entitled to revoke the offer even in the case where the purchaser had begun to use the smoke ball.

Displays of goods for sale in a shop

The general rule in relation to the display of goods for sale in a shop is that the display constitutes an invitation to negotiate and not an offer. The leading case is Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd.

Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd The important factor of the case was the place at which the contract was concluded. It sufficed for the court to decide that the contract was concluded at the cash-desk and thus under the supervision of the pharmacist. It treated the display as an invitation to negotiate and stated that the offer was made by the customer which the defendatns could then decide whether to accept or reject. However in Lefkowitz v Great Minneapolis Surplus Stores Inc the court held that a display of goods in a shop, or an advertisement to the effect that goods will be sold at a particular price, constitutes an offer. So there are exceptions. Tenders - The practice of inviting parties to tender, or to bid, for a particular project is not an uncommon one. It is perhaps most frequently encountered in the context of construction projects. - Does the invitation to tender constitute an offer? The answer ultimately depends upon the specific facts of the case. - At common law the general rule is that an invitation to tender constitues an invitation to negotiate and not an offer. - In the case of Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council an invitation to tender was held to be an offer. It was the cumulative nature of a number of factors that made this so; no one factor was decisive. Some factors: (i) the invitation to tender was addressed to a small number of interested parties; (ii) the tender proecuder was clear; (iii) the outcome was, in the opinion of the court, consistent with the assumptions of commercial parties.

What Constitutes an Acceptance? - An acceptance has been defined as a final and unqualified expression of assent to the terms of an offer: Chiity on Contracts 29th edn - Must the acceptance coincide exactly with the terms of the offer? - The general answer is that acceptance must be an unqualified expression of assent to the terms proposed by the offeror. Thus a purported acceptance which attempts to vary the terms contain in an offer is not an acceptance at all. In fact, it will be interpreted by the court as a rejection of the offer and as a fresh offer (or a counter-offer) which is then open for acceptance or rejection by the original offereror: Hyde v Wrench - However, it is imporant to be cautious on this matter because what could at first look like a counter-offer could actually be a mere inquiry for information. For example, enquiry into the delivery time etc. does not constitute an acceptance: Stevenson, Jacques & Co v McLean. - In Butler Machine tool Co Ltf v Ex-Cell-O Corporation a different idea was reached: A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer. However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance. Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially.

Must the acceptance be communicated to the offeror? - The general rule is that an acceptance, to be valid, must be communicated to the offeror. The general rule makes good sense; if it were otherwise, an offeror could be bound by an acceptance of which he was blissfully unaware.

However, this general rule is not without exceptions. Thus the party making the offer can waive the requirement of communication (Carlill), and the rule does not apply when the reason for the lack of communication is attributable to the fault of the offeror: Entores Ltd v Miles Far East Corporation, nor does it apply to communications sent by post.

Entores Ltd v Miles Far East Corporation Leading case on the rule that acceptance must be communicated to the offeror. The plaintiffs, a company based in London, made an offer by telex to the defendants, a company based in Amwsterdam who acted as agents for an American corporation. The defendants sent their acceptance of the offer by telex. It was held that the contract was formed when the communication of the acceptance was received by the plaintiffs in London. - Denning distiguishes cases of instantaneous communications between the parties and the case where the means of communication chosen by the parties is the post. - The rule that the acceptance must be communicated to the offeror does not apply to postal communications: the general rule being that acceptance takes place when the acceptance is posted, not when it is received. - Telex is different to the postal rule, acceptance is established when the telex is received. - This decision was approved by the HoL in the decision of Brinkibon Ltd v Stahag-Stahl und Stahlwarenhandelsgesellschaft mbH. The issue was the same as that which arose in Entores and the conclusion of the HoL was the same; namely that in the case of communications by telex the acceptance is effective when it is commuicated to the offeror, with the result that the contract is concluded in the place where the offeror is when he receives it.

Prescribed Method of Acceptance - It is open to an offeror to state in the terms of his offer that an acceptance must assume a particular form or be sent to a particular place. In such a case, is the offeror bound by a purported acceptance of the offer that does not comply with the requirements stipulated in the offer? - If the form of acceptance is mandatory then a purported acceptance that ssumes a different form will not be effective. On the other hand, if it is not mandatory and the method of acceptance adopted differs from that stipulated but is no less advantageous to the offeror then the acceptance may be effective to conclude a contract between the parties: Manchester Diocesan Council for Education v Commercial and General investments Ltd. - It is basically incumbent upon an offeror to state in clear terms that an acceptance must assume a particular form. Can Silence amount to Acceptance? - The general rule is that silence does not amount to an acceptance and the rule is a good one. Felthouse v Bindley Imposing silence as a means of acceptance is not normally permissible.

The Postal Rule - English law has adopted the view that acceptance takes place upon posting of the letter of acceptance. - This rule is a relatively unique antiquity of English law, and it has been criticised a lot. - Adam v Lindsell as authority. Holwell Securities Ltd v Hughes The offeree was requested to exercise his option by notice in writing. These words were held to exclude the postal rule as the offeror was specifying the need to see the acceptance (i.e. have notice of it) before any contract was formed. There is another interpretation, though. For the postal rule to apply, the acceptance must be properly addressed, the rules must not be excluded by the terms of the offer.

The applicability of the postal rule depends, not on the medium by which the offer is communicated, but upon whether the parties contemplated that the post might be used as a means of communicating the acceptance: Henthorn v Fraser. Where the postal rule is applicable, acceptance takes place even if the letter goes astray and is lost: Household Fire and Carriage Accident Insurance Co Ltd v Grant. The postal rule does not operate if its application would produce manifest inconvenience and absurdity, but much depends on what is meant by the phrase. (case above) Why has the Englsh law adopted the postal rule? Why does acceptance take place at the moment of posting the letter and not the moment of receipt? The strongest justification for the postal rule is that it places a limit on the offerors power to withdraw his offer. Academic authority suggests that the postal rule should not apply to contracts concluded by email and that the general rule requiring communication of the acceptance should apply.

Acceptance in Unilateral Contracts - One modification is that the courts may readily imply, as they did in Carlill, that the offeror has waived the requirement that the accptance be communicated to him. - The general rule is that the offerir us entitled to require that the offeree perform the requested act in its entirety. - A second issue relates to the time at which the offeror can withdraw his offer. Daulia Ltd v Four Millbank Nominees Ltd There must be an iomplied obligation on the part of the offeror not to prevent the condition becoming satisfied, which is seems to me must arise as soon as the offeree starts to perform. Until then the offeror can revoke the whole thing, but once the offeree has embarked on performance it is too late for the offeror to revoke his offer. Errington v Errington A father bought a house for his son and daughter-in-law. The house was bought with the assistance of a mortgage. The father told his son that the house would be theirs if they paid off the mortgage on the house. The couple began to pay off the mortgage but were not subject to any contractual obligation to continue to pay off the mortgage. Th father died nefore the mortgage had been paid off. In his will he left the house to his widow and in the present action his widow brought an action for possessiojn of the house against the daughter-in-law. It was held that the widow was not entitled to an order for possession. It was necessary for the court to examine the nature of the relationship between the father and daughter-in-law in order to establish whether or not the daughter-in-law was entitled to remain in possession of the house. The fathers promise was a unilateral contract a promise for the house in return for them paying instalments. It could not be revoked by him after the couple had started paying instalments, but it would cease to bind him if they left it incomplete and unperformed, which they have not done. It was held that if the daughter-in-law continues to pay all of the building society instalments, the couple will be entitled to have the property transferred to them.

Acceptance in Ignorance of Offer - The general rule is that performance of the requested act does not amount to an acceptance unless the party performing the act did so with knowledge of the existence of an offer. - Were it otherwise, a party could find himself bound to the terms of a contract which he was wholly unaware. - There might be an exception to this in the case of unilateral contracts though. - It has been stated that an act which is wholly motivated by factors other than the existence of the offer cannot amount to an acceptance; but if the existence of the offer plays some part, however, small, in inducing the person to do the required act, there is a valid acceptance of the offer. - Howeever, on Williams v Cardwardine it has recently been argued that English law does not inquire into the motive of the person carrying out the act. Hence, provided that the person was aware of the offer at the time at which he performed the act that is alleged to constitute the acceptance unless it is proved affirmatively that he did not intend to accept the offer when carrying out the particular act.

If you do not act in reliance of the offer you are not entitled to claim for it. It will generally be a difficulty task for an offeror to prove that the offeree did not intend to accept the offer at the time at which he performed the requested act. But this is not impossible. E.g. An offer to pay 100 to any person who should swim a hundred yards in the harbour on the first day of the year, would be met by volunatrily performing the feat with reference to the offer, but would not in mu opinion be satisfied by a person who was accidentally or maliciously thrown overboeard onn that date and swam the distance simpluy to save his life, without any thought of the offer. The offeror might or might not feel morally obliged to give him the sum in such a case, but would be under no contractual duty to do so: Clarke.

Has the Offer been Withdrawn or otherwise Terminated? - The final issue to be considered is whether or not an offer, once made, can be withdrawn or revoked. - The general rule is that an offer may be withdrawn at any time before it has been accepted and, for this purpose, the revocation must have been communicated to the offeree prior to his acceptance of the offer. Byrne & Co v Van Tienhoven & Co An offeree can withdraw any acceptance provided the withdrawal is communicated before the acceptance. The postal rule does not apply with revocation. Revocation must be brought to the mind of the person to whom the offer is made. What about when the offer has been made to the general public? What are the implications surrounding revocation? Basically you have to revoke in the same means that you put out the offer: Shuey v United States You cant revoke an offer in a unilateral contract as soon as there anything done in reliance on it by somebody. In an appropriate case, the revocation can be communicated to the offeree by a third party.

Dickinson v Dodds Dickison is regarded as authority for the proposition that a promise to keep an offer open for a particular period of time is not binding unless the offeree has provided consideration for the promise to keep the offer open. It is generally thought that an offer cannot be accepted in the case where the offeror dies before the offer is accepted.

HOW TO ANSWER QUESTIONS ON OFFER & ACCEPTANCE

Structure 1) First, has an offer been made? a. An offer is a specific and definite proposition manifesting the offerors clear intention to be bound. Such statements must be contrasted with mere invitations to negotiate, which lack any contractual significance, e.g. the majority of adverts and displays in shops. b. This is the case because adverts will often (i) lack specific details, (ii) the adverts is often couched in eulogistic terms, (iii) the responsibility for making an offer may be firmly placed on the enquirer and (iv) a reasonable person would not intend to expose himself to limitless actions for breach of contract where a limited supply of goods has become exhausted. c. Nevertheless, there are situations where an advertisement will include all the necessary ingredients to make an offer: Carlill v Carbolic Smoke Ball Co. The

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difference between an offer and an ITT will depend on the circumstances and the specificity of the language employed, so never attempt to be too dogmatic in your answer. Secondly, if an offer has been made, has the offeree unequivocally accepted this offer? a. Does the purported acceptance contain any new terms? If so, it might be a counteroffer: Hyde v Wrench. b. Does the acceptance display the requisite degree of intent? For example, there is a strong presumption in land law that accepting subject to comntract creates no contractual liability. c. Has the conduct of the offeree clearly established the fact of acceptance? Silence rarely constitutes acceptance, unless the offeree has agreed to that method of acceptance; but actions sometimes speak louder than words: Brogden v Metropolian Ry Co. d. Has the acceptance been authorised and communicated by the offeree or his agent? This is a stricter test than that of revocation by third parties: Powell v Lee e. When email is the mode of communication, has the offeree incorportated his/her name within the body of the email? The sending of an email where the ISP adds the senders name after transmission may be insufficient proof of an intention to accept an offer or, separately, to make an offer in the first place: J Pereira v Fernandes SA v Mehta. Thirdly, has the acceptance been communicated effectively? In particular: a. Is the acceptance effective on receipt or must it be actually read and understood by the offeror? This might have far-reaching consequences for acceptances recorded on answering machine or faxes received outside office hours. b. Has the offeree used the correct mode of communication? If a particular mode is prescribed by the offeror and the offeree uses an alternative means the acceptance will neot be valid unless the alternative mode is equally expeditious. c. Does the postal rule apply to the acceptance? The rule states that a postal acceptance is effective on posting but this will be subject to a test of reasonableness and the express reservations contained within the offer: Holwell v Hughes. d. If dealing with modern forms of communication, how has the common law approach to communication been affected by the Electronic Commerce Regulations 2002. Fourthly, at the moment when the acceptance is deemed to have been effective, is the offer still open? In particular: a. Has the offer lapsed. Expiry of a specified acceptance period, death of the offeror, and rejection of the offer and just some of the circumstances where the offer may no longer be capable of acceptance. b. Has the offer been revoked? Revocation is effective at any time before the date of effective acceptance, provided it is communicated to the offeree personally or through a reliable third party source: Dickinson v Dodds. c. Also consider objective standards of whether further offers may imply withdrawal of the earlier offer: Pickfords Limited v Celestica Limited. Finally, is there any precedent for suggesting a departure from the aforesaid rules of offer and acceptance?

The basic distinction between an offer and an ITT is that an ITT lacks the required objective intent and specificity to transform it into an offer. An offer can be withdrawn at any time before acceptance unless Philip has provided consideration for the offer to be kept open (e.g. payment). An acceptance must be an unequivocal statement, unambiguous and communicated. There is as yet no definitive case authority dealing with the use of email communication in the context of offer and acceptance. One must therefore extrapolate relevant principles from existing authority that might be appropriate to deal with the current situation. You have to look at the intention attached to any stipulated rules of how the offeror has required acceptance to be communicated. If it is equally expeditious, it is valid.

EMAIL - There is as yet no definitive case authority dealing with the use of email communication in the context of offer and acceptance. One must therefore extrapolate relevant principles from existing authority that might be appropriate to deal with the current situation. - The basic principle stays the same: to be effective the revocation of an offer must be communicated prior to the time when any effective acceptance has become valid. - In the context of faxes we have seen that communication normally occurs on receipt (Entores) but that this rigid rule is subject to flexible interpretation (Brinkibon). - However, one important difference between a fax and an email is that the latter often requires some positive action by the offeror before the acceptance can be read whilst the former is simply received in printed form. The user has to turn on the PC and have access to the email. - In many ways, opening an email is very similar to opening an envelope in order to read its contents. Seen in this light, email communication is not instantaneous and may not be governed by the Entores principles. If so, consider The Brimnes where the CA suggested thatt a letter (that is not protected by the postal rule) delivered during normal business hours is assumed to have been read a reasoable time after its delivery. - If the same can be said of emails then x could argue that the email was presumptively read a reasonable time after its delivery.

Question 1) Say the first thing to consider is whether constitutes an offer or an invitation to negotiate. To be an offer, x will have to demonstrate a clear willingness to be bound without any need or desire to prolong negotiations: An offer is an expression of willingness to contract on certain terms made with the intention (expressed or implied) that it shall become binding as soon as it is accepted by the person to whom it is addressed. Chitty Say why it might or might not be an offer: e.g. stating a definite price, is it subject to any inspection, is there a prescribed method of communication etc. Anything that demonstrates clear intent is relevant to this as well: Harvela Investments v Royal Trust Co of Canada and Carill. Then give all the reasons why it could possibly not be an offer: bids involved? Requires inspection etc? State the general rule as well (that offers displayed in a shop window do not constitute an offer according to Fisher v Bell). Then it might be an idea to give two different perspectives on the question: one assuming that x is an offer and one assuming that x is not. Consequently, as the contractual status of the notice is debatable, the answer below will assume that either proposition is valid. On the presuming x is not an offer route, decipher whether any offers have been made by other people. Then go on to carefully analyse whether these are in fact offers, or whether any requirements have been changed by the original seller to be able to classify their response as a counteroffer, aka a qualified acceptance. If so, the counter-offer destroys the original offer (Hyde v Wrench) and there would need to be an acceptance of this counter-offer before the contract came into existence. Butler Machine tool Co Ltf v Ex-Cell-O Corporation; is it a material change? Go on to say, assuming it was an unqualified acceptance Postal rule: acceptance is effective on posting according to Adams v Lindsell Say whether the court would declare the postal rule inapplicable or not due to any stipulations made in the offer.

CASES I NEED TO KNOW

Fisher v Bell Displayed price in a shop does not generally constitute an offer, but an invitation to treat. Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd. The general rule is that advertising goods in windows is an ITT. Grainger & Son v Gough The wording in an advertisement is often to vague to constitute an offer. Partridge v Crittenden An advert is construed as an ITT because the supplier/seller would prefer to choose its customers to avoid being inundated with acceptances that could not be fulfilled from existing stock. Carlill v Carbolic Smoke Ball Company An advert was held to be an offer because the clarity of its wording, linked with an intention to be bound as evidenced by the deposit of money with the bank, demonstrated te required degree of intent and specificity. Harvey v Facey Wording and details need to be clear to constitute an offer. Gibson v Manchester City Council The defendants statement that they may be prepared to sell was considered by the HoL to constitute an ITT. Harvela Instruments Ltd v Royal Trust Co. of Canada Expressing a fixed amount (price) means a valid offer has been made usually. Hyde v Wrench Counter-offer destroys any previous offer that has come before it. Butler Machine tool Co Ltd v Ex-Cell-O Corporation Have the material requirements of the offer been changed? Unless the offeror objects to nonmaterial changes made, the subsequent acceptance will be good. Adams v Lindsell Postal rule rule. Holwell Securities Ltd v Hughes The postal rules must not be excluded by the terms of the offer. It is also relevant if the letter is addressed wrongly, and if posting was a reasonable means of communication. However, also, if the postal rule is inapplicable, receipt of the letter when it actually arrives could constitute an acceptance. Eliason v Henshaw The general rule is that the offeree must adhere to the prescribed mode provided it is explicit and dogmatic, otherwise the acceptance is invalid. Tinn v Hoffman However, if the required degree of precision is lacking, the offeree may choose an equally expeditious means of communication. Same instantaneousness etc. Felthouse v Bindley Silence as a means of acceptance is not normally permissible.

Re Select-Move Ltd However, if an offeree agrees to silence being a means of acceptance then failure to communicate with the offeror is equivalent to acceptance. Grounds of acceptance by conduct. Powell v Lee If someone is acting as an agent to a person who made an offer, acceptance is given when it is communicated to the agent. However, this person must have authority to act as an agent. Thornton v Shoe Lane Parking Ltd It is possible that an answering machine could be a mechanical agent. Byrne v Van Tienhoven The normal rule is that an offer can be accepted, subject to the need for communication, at any time before notice of its withdrawal has reached the offeree. Any post-contractual attempt to increase the quote, for example, will represent a breach of contract. Society of Lloyds v Twinn CA recognized that there was no reason why an offeree should not unconditionally accept an offer whilst, at the same time, making a separate offer collateral to the original offer.

Entores CA suggested that communication was equivalent to understanding, e.g. if the offeror does not hear the acceptance it is not effective. However, this rule is not inflexible. The Brimnes Communication of withdrawal of an offer by telex is effective when it could be read, rather than when it is in fact read. The CA concluded that the telex was effective on receipt as the plaintiffs had been told that it was the defendants ordinary practice to read such telexes immediately. Brinkibon v Stahag Stahl und Stahl Since 1955 the use of Telex communication has been greatly expanded, and there are many variants on it. The senders and recipients may not be the principals to the contemplated contract. They may be servants or agents with limited authority. The message may not reach, or be intended to reach, the designated recipient immediately: messages may be sent out of office hours, or at night, with the intention, or on the assumption that they will be read at a later time. There may be some error or default at the recipients end which prevents receipt at the time contemplated and believed in by the sender. The message may have been sent and/or received through machines operated by third persons. And many other variants may occur. No universal rule can cover all such cases; they must be resolved by reference to the intentions of the parties, by sound business practice and in some cases by a judgement where the risks should lie. Brinkibon; Brimnes If by some fault of the offeror in maintaining communications equipment is relevant, then acceptance may be deemed to occur at the moment when it would have been received. Entores Lord Denning considered the possibility of Os telex machine running out of ink and therefore, being incapable of receiving As acceptance. His Lordship suggested that if an offeree reasonably believed that the acceptance had been received, and the offeror was at fault, then the latter would be estopped from saying that acceptance was not received.