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OfferDefinition of an Offer An offer is an expression of willingness to contract on specified terms, made with intention that it is to become legally binding as soon as the person to whom it is addressed accepts it.Offers to Public at Large Generally, offers can be made to the world at large.Issue: ...

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Offer Definition of an Offer An offer is an expression of willingness to contract on specified terms, made with intention that it is to become legally binding as soon as the person to whom it is addressed accepts it. Offers to Public at Large Generally, offers can be made to the world at large. Issue: Unilateral offers to the world Carlill v Carbolic Smoke Ball Company (1893): Company claimed carbolic smoke ball could prevent influenza. It was advertised that if anyone used their smoke ball 3 times daily for 2 weeks and in accordance with the printed directions, and still caught influenza, the company would pay that person £100. The advertisement stated the company had deposited £1000 with their bankers. Carlill bought the smoke ball and used it according to the instructions but still caught influenza

Offer Distinguished from Invitation to Treat Invitation to treat: an expression of willingness to enter into negotiations with the other party. There is no intention to be bound. English courts state that an apparent intention to be bound would suffice if the offeror, through his words or conduct, induces a reasonable person to believe that he did intend to be bound, despite having no such intention. Advertisements General Rule: Invitation to treat, unless there is an intention to be bound. Patridge v Crittenden (1968): Defendant was charged with “offering for sale” a wild bird contrary to the provisions of the Protection of Birds Act 1954. His conviction was quashed on appeal on the grounds that his advertisement was not an offer but an invitation to treat. Issue: Online advertisements Chwee Kin Keong and others v Digilandmall.com Pte Ltd (2004): Similar principles apply to electronic trading on the Internet or e-commerce. Advertisements posted on a website amount to invitations to treat. EXCEPTIONS: However, cannot rule out the possibility of the advertisement constituting an offer rather than an invitation to treat. Esp. when the buyer is guided on screen step by step by the seller until he clicks “I accept” and pays the purchase price online. Key element: intention of the parties.

Displays of Goods for Sale General Rule: All such displays are regarded as invitations to treat. Fisher v Bell (1960): Defendant had displayed flick knives in his shop window and was convicted of the criminal offence of offering such knives for sale. Court held that the display of goods with a price ticket attached in a shop window is an invitation to treat and not an offer to sell. Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953): The Court of Appeal in this case had to identify the precise time when a contract was concluded. This required them to decide whether the display of goods on the open shelves in a self-service store amounted to an offer of goods for sale or an invitation to treat. The court held that the display of goods was an invitation to treat. The customer made the offer to buy at the cash desk and the sale was completed when the cashier accepted the offer. Two practical consequences: 1. Shop does not have to sell the goods at the marked price especially where it has misquoted the price. 2. Buyer cannot insist upon buying a particular item on display even if the shop has run out of stock. Auction Sales General Rule: the call for bids by the auctioneer is an invitation to treat. The bids made by those present at the auction are offers. Offer is accepted with the fall of the hammer. EXCEPTION: Warlow v Harrison (1859): Advertising that an auction will be “without reserve” amounts to an offer by the auctioneer that once the auction has commenced, the lot will be sold to the highest bidder however low the bids may be Tenders General Rule: Invitations to tender are invitations to treat and not offers (Spencer v Harding (1870)) EXCEPTION: Harvela Investments Ltd v Royal Trust Co of Canada (1986): First defendants decided to sell shares of a company by sealed competitive tender. They invited two parties to submit tenders, promising to accept the highest offer. Plaintiff’s bid was higher but the second defendants lower bid was accompanied by a clause which stated “or $100,000 in excess of any other offer”. House of Lords held that given the expressed intention of the vendor to sell to the highest bidder, the invitation to tender was a contractual offer. It held that the second defendants’ “referential bid” was invalid.

Termination of Offer If an offer is terminated prior to its acceptance no contract can come into existence. There are five ways to terminate an offer. Revocation Offeror can revoke the offer anytime before acceptance by the other party. However, the revocation must be communicated to the offeree.

offer at any time before acceptance, even though the deadline had not yet expired. EXCEPTION: Issue: A legally binding option will be created if the offeree provides consideration for the offeror’s promise to be kept open.

Issue: Revocation ineffective; revocation came after acceptance

Mountford v Scott (1975): the purchaser of a house paid the seller 1 pound for an option to buy, exercisable within six months. The Court of Appeal held that the seller could not withdraw the offer before the option expired.

Byrne v Van Tienhoven (1880): Defendants sent a letter of revocation which reached the plaintiff 9 days after the plaintiff had accepted the offer by telegram. (Postal acceptance rule applied) The court held that there was a binding contract and the revocation was ineffective.

Subsequent Offer An offer may be revoked when it is replaced by a subsequent offer. The second offer must state that it supersedes the earlier offer.

Communication by a Reliable Third Party to Offeree Dickinson v Dodds (1876): Defendant offered to sell a house to the plaintiff, the offer “to be left open until June 12, 9am”. Defendant then sold the house on 11 June. Plaintiff heard about sale of the house from his property agent on the same day, but purported to accept the offer on 12 June. English Court of Appeal held that defendant had validly withdrawn his offer and that the withdrawal was validly communicated to the plaintiff through a reliable third party. Revocation need not be Explicit Overseas Union Insurance Ltd v Turegum Insurance Co (2001): In March 1999, defendants offered to accept a sum of US$220,000 from plaintiff to reduce its outstanding liability. Plaintiff purported to accept the offer on 21 Oct. However, defendants claimed that the offer had since been withdrawn by the defendants’ letter of demand for payment by the plaintiff of its full liability made on 5 Oct. Singapore High Court agreed with the defendants that the offer had been revoked. Court held that notice of withdrawal does not to be explicit, as long as enough information was given to show that the offeror does not want to proceed with the offer. Time of Withdrawal: Position Unsure The Brimnes (1975): In the case of withdrawal of a vessel sent by telex during ordinary business hours, the withdrawal was effective when received. There was no requirement that it actually be read. In general cases, revocation could be effective when the letter reaches the plaintiff or when he actually reads it. No Legal Obligation to Keep Offer Open There is no legal obligation on the part of the offeror to keep the offer open for a specified period even if he had promised to do so. Routledge v Grant (1828): the defendant offered to buy the claimant’s house, giving the claimant six weeks to consider the proposal. The court held that he could withdraw the

Rejection/Counter Offer Issue: Offer is terminated when it is rejected or when offeree issues counter-offer. Counter-offer has 2 distinct effects. Rejects original offer and stands as a new offer capable of being accepted by offeror. Hyde v Wrench (1840) [Pg.181] – Defendant offered to sell farm at $1000, plaintiff counter-offers $950 but defendant rejects. Plaintiff then purports to accept original offer of $1000 but it was held that there was no contract. Stevenson v McLean (1880) [Pg.181] – Defendant offered to sell iron to claimant. Claimant asked if they could have credit terms but no reply given so they accepted the offer. Defendant then sold to others. Court held that there was a breach of contract as claimants were not issuing a counteroffer but rather an enquiry of terms.

3. Lapse of Time a) When offeror has specified a time limit, offer will lapse if not accepted within that time. EXCEPTION: If it is clear from the offeror’s conduct and other evidence that the terms of the supposedly lapsed offer continue to govern the relationship after the specified period, then the offer is still valid and capable of acceptance after the deadline: Panwell Pte Ltd & Anor v Indian Bank (No 2) (2002) b) If the offeror has not specified a time limit it will lapse after a reasonable time. Ramsgate Victoria Hotel v Montefiore (1866) [Pg.182]: Defendant paid a deposit for shares in the plaintiff’s company. He heard nothing for 5 months and then plaintiffs told him shares have been allotted to him and asked for the balance due. Court held that defendant need not pay as 5 months was not a reasonable amount of time due to the rapidly fluctuating nature of share prices. 4. Failure of a Condition An offer may be made subject to conditions which may be stated expressly by the offeror or implied by courts from the circumstances of the case. If such conditions are not

satisfied, the offer is not capable of being accepted. Overtly stated or implied condition. Financings Ltd v Stimson (1962) [Pg.182]: Defendant saw a car and signed a hire purchase form that stated the agreement will only be binding when signed by the finance company. Defendant returned car due to dissatisfaction and company car was stolen. It was recovered in bad condition and finance company later signed agreement, unaware that the car was in bad shape. Court ruled that defendant need not pay as there was implied condition that the car should be in a good condition and that was not fulfilled 5. Death: Law not entirely clear. Offer dies with the offeror. When offeror dies: Appears that offer will terminate if the offeree knows that the offeror has died; it will not if the offeree has no notice of it: Bradbury v Morgan (1862). His acceptance may be valid if made in ignorance of the death of the offeror, depending on the nature of the contract. If the offer involves personal services of the offeror, it cannot be accepted. Other offers may survive and be accepted and binding on the personal representatives of the deceased. When offeree dies: If offeree dies before accepting offer then offer is no longer capable of acceptance.

Acceptance An acceptance brings a contract into existence, making both parties legally bound. It is an unconditional agreement to all terms of the offer. General Rule: Offer must still be open and must be accepted either by written or spoken words or by conduct. Acceptance by mental assent or silence is not valid. Two Criteria to Satisfy: - Acceptance must be final and unqualified - Acceptance must be communicated to the offeror

The decision in Entores was approved by the House of Lords in Brinkibon Ltd v Stahag Stahl (1983) [Pg.200]. However, the House of Lords said that telex message sent outside working hours would not be considered instantaneous. A few exceptions to the instantaneous communications due to certain assumptions, e.g. message may not reach recipient immediately. Read Pg. 186 para 7.55 for more. Important point is to look at intentions of the parties. These exceptions stated by Lord Wilberforce in Brinkibon were also accepted in the Singapore case of Transniko Pte Ltd v Communication Technology Sdn Bhd (1996).

Acceptance must be final and unqualified The offeree must agree to all the terms contained in the offer. Any attempt on his part to introduce new terms would result in a counter-offer.

EXCEPTION: Postal Acceptance Rule Acceptance takes place at the time when the letter of acceptance is posted and it is complete regardless as to when the letter reaches the offeror or whether it reaches him at all.

Acceptance must be communicated to the offeror General Receipt Rule: Before a binding contract can come into existence, the acceptance must be communicated to the offeror. Mere mental assent is insufficient, there is a need for objective manifestation.

Postal rule applies only when reasonable to do so, if acceptance was properly stamped and addresse and where postal acceptance is expressly or impliedly authorized.

This general receipt rule applies to all modes of instantaneous communications including face-to-face negotiations and communications by telephone, telex, fax and (possibly) email. In such cases, the rule is that the communication must actually be received by the offeror. a) Acceptance through conduct Brogden v Metropolitan Railway (1877) [Pg.184]: 2 parties decided to formalize their agreement. Railway company sent a draft agreement to Brogden. Brogden filled in some blanks, marked it approved, and returned it to the company. Railway company kept the agreement. Their business dealings continued until a dispute arose. Court held that there was a contract. Brogden’s amendments to the draft agreement amounted to an offer which was accepted by the company through its subsequent conduct with Brogden. b) For instantaneous communication, acceptance must be received by offeror. Entores Ltd v Miles Far East Corporation (1955) [Pg.184]: Dealings between company from Holland and England. The defendants in Amsterdam argued that the acceptance was already made when the reply by telex was typed in Holland. The plaintiffs argued that acceptance was only in effect when they received it in England. Court ruled in favour of the plaintiffs because where a contract is made by instantaneous communication, the contract is only complete when the acceptance is received by the offeror. EXCEPTION: Waiver of Communication It may be implied from the construction of the contract that the offeror has dispensed with the requirement of communication of acceptance (called waiver of communication - which is generally implied in unilateral contracts): Carlill v Carbolic Smokeball Co (1893) [Pg.172].

Adams v Lindsell (1818) [Pg.186]: Defendants did not address letter correctly and letter reached plaintiffs on 5 Sept instead of 3 Sept. Plaintiffs posted their acceptance on 5 Sept and it reached the defendants on 9 Sept. Defendants sold the wool to a third party on 8 Sept. Court held that the contract was concluded on 5 Sept when the letter of acceptance was posted. Household Fire and Carriage Accident Insurance Co v Grant (1879) [Pg.187] Letter of acceptance was not received by offeror but was still held as contract as letter was posted hence acceptance was communicated. Can postal acceptance be revoked before it reaches the offeror? (Two sides) NO: if the postal rule applies, a contract is formed immediately once the letter is posted, thus there is no acceptance to revoke. Also, it would not be fair to the offeror if the offeree were allowed to have the best of both worlds – to avail of the postal acceptance rule if it suited him, or to revoke his acceptance if it did not. YES: there is no prejudice to the offeror if he is unaware of the acceptance, and the letter of acceptance can be intercepted by faster means. The offeror had the choice of the medium. If he chose the postal medium, he must bear the consequences. With regards to email, refer to Pg. 188. d) Acceptance by silence: Silence cannot be treated as acceptance. Felthouse v Bindley (1862) pg 188 – Uncle issue offer to Nephew saying if he does not hear from him he takes it as acceptance. Nephew willing but forgot to reply, told auctioneer not to sell horse but horse still got sold. Uncle sued auctioneer for selling his property however it was held that there was no contract because silence not accepted.

This is to prevent people from forcing contracts onto unwilling parties. Exception: If offeree was seeking possibility of acceptance by silence – Re Selectmove Ltd (1995) [Pg.189]. Textbook inconclusive. e) Ignorance of Offer: Cannot accept offer of which he has no knowledge of.

Some Issues regarding certainty and completeness. If parties enter agreement stating that terms and conditions to be agreed upon later then in this case there is no contract. So pay extra attention to how the language is used. Also if conduct or evidence contradicts the language, the court will hold that a binding contract has been concluded.

Electronic Contracts R v Clarke (1927) pg 190 – Clarke an accomplice gave information on the murder of two policemen in exchange for pardon. However, he was ignorant of reward that was put up and when he tried to claim it court did not allow. Williams v Cawardine (1833) pg 190 – Plaintiff knew about reward but gave information to ease conscience. Court ruled that she was still entitled the reward. Exception: Gibbons v Proctor (1891) pg 189 – Plaintiff ignorant of reward for information leading to arrest of criminal but was still rewarded anyway, because he knew of it by the time the information was given on his behalf.

Invitation to Treat Labelled as “invitation to treat” or something to that effect, or with insufficient terms and conditions Indeterminate availability of stock When supply of the products or services are necessarily limited in the face of the potential demand (e.g. worldwide market) Bargaining expected The selection and picking up of the goods is too equivocal to constitute acceptance

1) Do the rules on formation of contract (offer & acceptance) apply to transactions carried on through electronic means? YES ALLOWED • s5. (1) ETA: Nothing in Part II shall affect any rule of law or obligation requiring the agreement or consent of the parties as to the form of a communication or record, and (unless otherwise agreed or provided by a rule of law) such agreement or consent may be inferred from the conduct of the parties. •

s5(2) and (3) ETA: Provisions of ETA can be excluded, varied or added to.

•

s11 ETA: For the avoidance of doubt, it is declared that in the context of the formation of contracts, an offer and the acceptance of an offer may be expressed by means of electronic communications.

Offer Labelled an offer and is unequivocal

S12 eta: a declaration of intent or other statement shall not be denied legal effect, validity or enforceability solely on the round that it was made electronically. 2) Distinguishing between invitation to treat and offer: • s14. A proposal to conclude a contract made through one or more electronic communications which is not addressed to one or more specific parties, but is generally accessible to parties making use of information systems, including a proposal that makes use of interactive applications for the placement of orders through such information systems, is to be considered as an invitation to make offers, unless it clearly indicates the intention of the party making the proposal to be bound in case of acceptance.

• Technology allows for constant and immediate update of stock Where products are available in limitless quantities (ease of replication) and can be easily transferred (ease of distribution), particularly relating to digital products No bargaining involved Where the offer appears to be perfected upon an acceptance, such as a unilateral offer

f) Cross-Offers: There will be no contract in the case of cross offers. Crossoffers happen when two parties send offers to each other in identical terms and at about the same time and the letters cross each other in transit. No meeting of minds. g) Battle of forms: Butler Machine Tool Co v Ex-Cell-O Corporation (England) Ltd (1979) pg 206 -acceptance must be final and unconditional on the latest form, not merely a counter offer. Sometimes parties would like to conclude contract upon their own terms. This would lead to an endless exchange resulting in no contract. Lord Denning suggests looking through the documents passing between them to determine if there...