Contract Law Large Group 2 Notes general principles PDF

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Contract Law Large Group 2  

Agreement: Offer + Acceptance Acceptance: “the unqualified expression of assent to the terms of the offer’’ o Must be communicated to the offeror - Entores Ltd v Miles Far East Corp (1955)

SILENCE  Felthouse v Bindley (1862) o Paul Felthouse wanted to buy a horse from his nephew, John Felthouse. o Paul received a letter from John concerning their discussion. o Paul replied saying, "If I hear no more about him, I consider the horse mine at £30.15s." John did not reply. By accident, the horse was sold by auction. o Paul sued the auctioneer in the tort of conversion - using someone else's property inconsistently with their rights. o SILENCE BY ACCEPTANCE CANNOT BE IMPLICATED. IMPOSED BY OFFEREE 

Re Selectmove Ltd (1995) Can be a valid acceptance ‘if you hear nothing from me, assume I have accepted’

Acceptance in an Electronic World 

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Bletchley Engineering Ltd (“BEL”) made an offer to sell an industrial grinder for £20,000 to Godfrey Curtis Fabrications (“GCF”). Alan Curtis, the operations director of GCF, is trying to accept the offer by an e-mail which he sends within office hours at 4:40pm. He sends it to Bridget Webber, the sales manager of BEL Acceptance by e-mail of an offer takes place when Bridget should have read it Brinkibon Ltd v Stahag Stahl und Stahlwarenhandel GmbH (1983) o “No universal rule can cover such cases: Acceptance by email of an offer takes place when  it was intended by the parties to be accepted…  by reference to sound business practice…  having regard to where the risks between the parties may lie.’’

Normal rule exception: Postal Rule 

A letter of acceptance that is posted is communicated when it is posted.

Adams v Lindsell (1818) Conditions: 

Only applies to acceptances

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Where it was reasonable for the letter to be sent by post

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Letter must be properly stamped, addressed and posted

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Rule must not be excluded by the offeror.

Acceptance by conduct They can accept by continuing conduct. Brogden v Metropolitan Railway Co (1877) B had supplied coal to M for 2 years; no “overall” contract M sent draft formal contract, asking B to insert the name of an arbitrator and to sign and return it B signs and returns draft with name inserted – offer M put it in a drawer - no reply M orders coal B supplies coal

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Unilateral contracts Carlill v Carbolic Smoke Ball Co (1893) A promise in return for an act Other responses to an offer 

Rejection

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Counter offers (implied rejection) - Hyde v Wrench (1840)

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Terms and conditions – whose terms apply?

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o Butler Machine Tool Co Ltd v Ex-Cell-O Corporation (England) Ltd [1979] The claimant offered to sell machinery to the defendant. Delivery was to be in 10 months’ time, and the price was £75,000. The claimant sent the offer on its usual standard form. The form said that the claimant’s terms were to prevail over any

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terms on the defendant’s standard form. The claimant’s terms included a price variation clause which allowed the claimant to increase the price of the machinery to keep pace with inflation. The defendant sent back a form purporting to accept the claimant’s offer. The defendant’s form of acceptance, however, said that the price must be fixed at £75,000. The defendant’s form of acceptance asked the claimant to sign and return a tear-off slip. This slip provided that the terms of the defendant should prevail.

The claimant signed and returned the tear-off slip. When the claimant delivered the machinery it tried to invoke the price variation clause in its original offer, and claimed an extra £2,800. The defendant refused to pay and the claimant sued. FINAL OFFER PREVAILS AND EVRY COUNTER OFFER IS AN IMPLIED REJECTION.

Requests for information - More info of the offer but leaves the offer open- - Stevenson, Jacques & Co v McLean (1880) 5 QBD 346 - M: Offer to sell 3,000 tonnes iron at 40 Shillings net cash per tonne - S: “Please wire whether you would accept 40/- for delivery over two months, or if not, what is the longest limit you could give.” - M sells iron but fails to tell S - S: OK, we accept the offer to sell at 40 Shillings Agreement: Agency - Definition: The power to change legal relations of another person Always 3 - Principal gives authority to agent - Authorised to bind into contacts - Customer is third party - Auctioneers - Football agents Agency: Creation “a legal relationship between principal and agent created by consensual agreement to which they alone are the parties”. Freeman & Lockyer v Buckhurst Park Properties (Mangal) Limited (1964) 

Two different types of authority

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Express actual authority Implied actual authority Apparent authority : don’t acc have authority...