Contract Law- offer and Acceptance PDF

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Contracts: Formation of Contracts Friday 2nd February 2018 Formation of contract looks at the agreeing together of the two parties to soething they are going to have in common, the delivery of favours…. Offer and Acceptance= consensus ad idem (agreement to the same thing)  3 sorts of communication

1. invitation to treat (offer to)  Is distinguished from offer in the sense thean offer has to be capable of being immediatly accepted, thus turns into an Agreement  Offer = Acceptance = Agreement  Agreement + (Consideration/form + intention) = Contract  Is a statement made by a party, which invites someone to make an offer (an invitation to negotiate)  Pharmaceutical Society of GB v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401 - Boot introduced the then new self-services checkout machines, where shoppers pick up their goods and put them in their basket and then take them to the cash till to pay - Pharmaceutical Society of Great Britain brought an action to determine the legality of the system with regard to sale of pharmaceuticals - The breach of the Poison Act - The Court held that as a matter of contract law the acceptance had to be an offer. - Goods on the shelf constitute an invitation to treat not an offer. A customer takes the goods to the till and offers to buy the goods at the price displayed. - The shop assistant the accepts the offer if yes. If No the offer will not be accepted by the store.  Fisher v Bell [1961] 1 QB 394 (moral panic and public safety) (criminal prosecution) - The defendant had a flick knife displayed in his shop window with a price tag on it. - He had been given a warning - He said he never offered to sell them - What is an offer for sale? - Means the same in criminal law as it does in criminal law - A mere display of goods is not an offer, but an invitation to treat - Statute made it a criminal offence to ‘offer’ such flick knives for sale.

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The conviction was quashed as goods on display in shops are not an offer in the technical sense but an invitation to treat The law on to make a exposure for goods incriminating??

 Partridge v Crittenden [1968] 1 WLR 1204 - The defendant placed an advertisement in a classified section of a magazine offering some bramble flinches for sale - S.6 of the Protection of Birds Act 1954 made it an offence to offer such birds for sale. - He was charged with the - The conviction was quashed - The advert was an invitation to treat not an offer Advertisement, Display of goods do not amount to an offer, they are just an invitation to treat.  Byrne & Co v Leon Van Tienhoven & Co (1880) - The defendant wrote a letter on the 1st of October, to the plaintiff offering the sale of 1000 boxes of tin plates. - The defendant was based in Cardiff and the plaintiff was based in New York

2. Offer An offer is an imitation, by words or conduct, of a willingness to enter into a legally binding contract, and, which in it’s terms expressly and impliedly indicates that it is to become binding on the offeror as soon it has been accepted by n act, forbearance or return promise on the part of the person who it is addressed to.  Something that is not an invitation to treat  A proposal to one or more other parties that you should enter into contractual arrangement  It must be dome with the intention that should they accept the invitation you will be legally bound.  Sufficient content must be within the contract, to give a degree of certainty  Defining the term by what is not

 Certainty!!!!  The law can imply a reasonable prise based on The Sales of Goods Act  The offer defines the way acceptance must take place in some cases (Bigger money contracts) the offeror must specify how it is to be accepted… or it could be bound by implied terms

3. Acceptances (sometimes have to be distinguished from counter offers)

 Is subject to the mirror image rule  An offer must be /accepted exactly with no modification  “yes, it must be delivered by…”- this is a counter offer

- the counter offer kills the original offer - A makes an offer to B - B accepts (the contract is binding) - B comes back and says ill buy your product and the stated price, on terms payment made 30 days (counter offer)

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A can reply ‘alright’ which is an acceptance, thus we have a binding contact

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If A was to reject the counter offer, B is not able to accept the original offer to bind B to a contract.

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COUNTER OFFER is an offer in response to an offer

 Hyde v Wrench (1840) 3 Beav 334 - Counter offer and request for information - You can revive dead offers - Issue: whether there was a valid contract between the parties and if the offer was made in discussion - Ratio: you cannot revive a dead offer  Acceptance must be communicated  What amounts to communication - Communication needs to be received by the offeror (the acceptance in other for it to create effect and create agreement)  Entores Ltd v Miles Far East Corp [1955] 2 QB 327 - The question for the Court was: “at what point (when and where?) the (contract) acceptance came into existence?” - The governing law, is where the contract was made (England it is - Was it made where the telex was made or were it was received) - The Postal Rule of Acceptance- If you reply by post and by no other method at all, it does not apply to any other method at all (when posted acceptance takes place)

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Any reasonable method of communication is generally accepted

Exceptions to the communication rule  In unilateral (one sided) contracts the normal rule for communication of acceptance to the offeror does not apply. Carrying out stipulated task is enough to constitute acceptance of the offer.  The offeror may expressly or impliedly waive the need for communication of acceptance by the offeree, for example, where goods are dispatched in response to an offer to by.  The Postal Rule- where acceptance by post has been requested or where it is an appropriate and reasonable means of communication between the parties, then acceptance is complete, as soon as the latter of acceptance is posted, even if the letter is delayed, delayed or lost in the post so that it never reached the offeror.  The postal rule only applies to communications of acceptance by cable, including telegram, but not to instantaneous modes such as telephone, telex and fax.  Adams v Lindsell (1818) 1 B & Ald. 681 - The latter was delayed by the post office - The defendant claimed the claimant was not interested in the product (wool) - It was held that there was a valid contract - The postal rule  Felthouse v Bindley (1862) - Tort of Conversion – doing stuff with other people’s items - Who owned the horse when it was sold? - The ownership of specific goods passes when the contract said is made - Acceptance must be communicated… silence is never acceptance…. - It has to be within normal office hours when the email is received. a) Argument A- silence is never acceptance b) Argument B- the offeror cannot stipulate silence as mode of acceptance (this is where fundamental problems arise)- this is the true aim of  Abby-life case - She sues to get her money back for the sale of her property - You have to apply for units to be allocated, which may not be the perfect match for the total value of the cheque

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She was sent an offer… she said she never accepted because she did not respond. They didn’t know when acceptance has actually occurred i. When they received her application (offer) they then allocated certain numbers- thus acceptance. ii. By retaining the documents for 7 months means that she could have accepted the offer iii. Did it happened before she complained… or before? Has to be communicated within a reasonable time… it becomes acceptance It is not the silence that is accepting the offer but the conduct of retaining the contract. What would the reasonable person think if they were in the case of Abby? ACCEPTABLE MAYBE BY CONDUCT!!! Compare to the Spice Girls case- philosophically

 Butler Machine Tools Co v Ex-cell-o Corp (England) [1979] 1 WLR 401 - When did agreement occur? - ΩThe tear-off strip was the last bit of paper work to be passed between the parties - The one bit of information which is not returned is the last resort of an agreement (Tennis- the last short to be hit = Agreement) - Look at Lord Denning’s View on this… 

Revocation Same rules as those for acceptance As to be received to take effect (communication by the offeror) It can be by conduct or knowledge of the conduct can be conveyed by a third party The offeror makes an offer to the offeree. The offeree has to receive the offer (subject of the postal rule (only applies to acceptance) Revocation has to be received by the offeree When was the revocation received? - The communication of the revocation does not have to be direct as long as it is received

 Dickinson v Dodds (1876) (also apples to collateral contracts)  The defendant offered to sell his house to the claimant and promised to keep the offer open till Friday.  On the Thursday, the defendant accepted an offer from a third party to purchase the house G G

Unilateral contracts The obligation is all on one side One art to the contract is under obligation (sued for breach) and the other party is under no obligation The acceptance does not need to be communicated  Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256  The advert was merely a mere puff and lacked intent to be an offer  The £1000 was given as evidence of intent.  There are offers made to the world… and they can accept them by performing.  When the performance is completed the offeree is obligated to meet the conditions within the unilateral contract.  The action must be carried out in response to the offer  The court held that she was entitled to her money Collatera/bilaterall contract? Each party to a contract is obliged to some act or forbearance which, at the time of entering the contract, if is future; there is an outstanding obligation on each side. (both promiser and promise have an obligation).  D  It was an on the side contract  These occur in a commercial context  Can contract be both collateral and unilateral ???????? re fucking search it Gibson v Manchester City Council [1979] 1 WLR 294 (HL)...