Contract Law lecture 8 PDF

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Contract Law lecture 8...

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19/10/2017

Contract Law- lecture 8 Unilateral contracts- the person performing the act must be aware of this. You must have knowledge of the offer in order to accept it.

“The person who makes the offer may dispense with the notice to himself…” bowen, lj.  Performance of the requested act is acceptance  Must have knowledge of the offer in order to accept

R V Clarke (1927) 40 CLR 227- (Australian case) There can be no acceptance of an offer where there is ignorance to the offer. Clarke was arrested and gave information about the murder of two police men. An award was advertised for a reward for information. Clarke was not allowed to receive the award since his information was given ignorantly to the reward. The offer and the action have to be connected. He did not have the requisite knowledge at the time he made the acceptance and therefore, no contract was formed. Gibbons v Proctor (1891) 64LT 594 Policeman (D) came forward to give information with regards to a crime. At the time he did this, he did not have any knowledge of the reward. However, he later saw a poster with information about the reward. The court said he could still be rewarded the money. The person he told the information to had to give the information to the Sergeant, the Sergeant then had to pass the information forwards. The time that it took to do all of this, the D had seen the notice. Williams v Cawardine (1833) 5 C&P 566 2 men accused of murder of the D’s brother. Mrs C gave information at the time of the trial but she didn’t give all the information she could have done. Williams offered a reward for any further information. She was worried that she was dying and in a state of guilt then gave the relevant information. The offer of the reward played no part in her decision to give the information. She was still able to claim the reward as the motive does not have to be to get the reward, as long as you perform the act (she gave the knowledge.)

ACCEPTANCE – UNILATERAL – PARTICUALR PROBLEMS Example- an offer to pay someone to complete a big walk. The acceptance wouldn’t be made until the walk has been completed. Someone may have walked part of the journey? Can the offer then be retracted?

19/10/2017 Errington v Errington [1952] 1 All ER 149 Father said his son and his son’s wife could have the house if they played the mortgage. He died and left his estate to his wife who wanted to the others out. “The father’s promise was a unilateral contract, a promise of the house in return for their act of paying the instalments. It could not be revoked by him [or his estate] once the couple entered on performance of the act, but, it would cease to bind him if they left [the act] incomplete and unperformed, which in this case, they have not done.” Acceptance was not made until the performance had been fully made. If it is never completed, then no binding contract will ever come into existent. However, once the performance of the offer has been started, the offer cannot be revoked.

Daulia v Four Millbank Nominees [1978] 2 All ER 557 “…the offeror is entitled to require full performance of the condition which he has imposed and short of that he is not bound…” per Goff, LJ. ‘we have to understand a unilateral offer as containing 2 as opposed to one promise. 1. Reward itself 2. Implied offer that the offeror will not prevent the act from being satisfied.’

Termination of offers Revocation- if you chose to revoke your offer, it must be communicated to the offeree. Payne v Cave (1789) 3 Term Rep 148: an offer may be revoked at any time before acceptance. Routledge v Grant (1828) 130 ER 920: an offer to sell a house which was to remain open for 6 weeks. The offeror sold the property before the end of the 6 weeks. The court held that the offer could be withdrawn at any time before acceptance. In this case, the promise given to hold the offer open for 6 weeks was done gratuitously. If the person to who he had made that offer had given something in return for that promise, it may have been difference. The law of contract does not enforce gratuitous offers. Dickinson v Dodds (1876) 2 Ch D 463 The D offered to sell his house and was to hold the offer open for 2 days. However, he sold the house the next day to someone else. The P then tried to accept the original offer on day 2. The Court of appeal held that the P could not accept the offer as they knew the offer had been revoked. The withdrawal of the offer can be communicated to the offeree by a source other than the offeror. As long as they know, it does not matter how they are told.

Other ways an offer can come to an end Lapse of time- an offer will generally remain open for a reasonable length of time (‘reasonable’ depends on the particular offer in question) i.e. acceptance of a bunch of bananas is no good after 3 weeks as they will have perished.

19/10/2017 i.e. Ramsgate Victoria Hotel Co v Montefiore (18866) LR 1 Exch109- 5-month gap between offer and acceptance which was held to be ‘excessive and unreasonable.’  Conditional- if the condition is not met, then acceptance is invalid. If the condition is never satisfied, then acceptance can never occur.  Death- An offeree cannot accept an offer once he has been notified of the offeror’s death. i.e. Bradbury V Morgan (1862) 1 H7C 249- Plaintiff continued the contract not knowing that B had passed away. Plaintiff then tried to sue his family. The court said that death in general does not act as revocation.  Rejection/ counter offer  Supervening incapacity REVOCATON OF A UNILATERAL OFFER Errington v Errington- if there has not been any commencement of the performance, then the offer may be revoked. If the performance has been started, then it cannot be revoked. How do you communicate your intention to revoke to the whole world? 

Shuey v US (not authoritative, only persuasive as American case)- revocation could be effectively communicated to the whole word if notoriety given to the revocation is given in the same way as the offer was made. I.e. Smokeball case- could have retracted their offer, as long as they had given publication of this in the same way as the offer was made....