Contract Law revision 1 PDF

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Contract Law Revision 1. Offer or invitation to treat? • • • •

1.

Invitation to treat Partridge v Crittenden Advertisements are usually invitations to treat. Advertisement is inviting others to negotiate and make offers in response.

Explain law with reference to authority

2. Application to facts

Bilateral or unilateral contract? • Bilateral by default. Promise in exchange for promise. • Binding contract before performance begins. • Likely result of negotiations is a promise to build a conservatory and a promise to pay (usually deposit and balance on completion. 1. Explain law

2.

Apply to facts 2. What is the effect of Paul’s statement that he could do the work for £8,500?

• Firm offer • Definite promise to be bound on acceptance of £8,500 to do the work without further negotiations. • Firm offer- statements offer is open until next Wednesday- when it will lapse. Routledge v Grant or Dickinson v Dodds. Explain law

Apply to facts 3. Significance he told Nazia he needed to know whether she wanted him to do the work by next Wednesday?

Two consequences: Firm offer Needed to know- Ousts the postal rule

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3. Firm offer “Need to know by Wednesday” makes the offer firm. Offer can be revoked before Wednesday Offer will lapse after Wednesday. Offer can be revoked before Wednesday because the offer is not supported by any consideration. Routledge v Grant. If Nazia’s letter had arrived on Thursday 22nd October. The offer had lapsed on Wednesday and so is not available for acceptance.

• • • • •

3 “Needs to know” - ousts the postal rule Postal rule- acceptance as soon as correctly addressed envelope placed in post box. • These words indicate actual communication of acceptance is required. Postal rule not applicable therefore. • There must be actual communication of acceptance. Holwell Securities or Entores Explain law Apply to facts 5. What type of communication is Nazia’s letter of 16th October? •

• • •

Letter of acceptance Acceptance matches the offer Factual an acceptance

Two requirements for valid acceptance

1. Acceptance IN FACT  

Recognisable in law as an acceptance Offeree’s agreement, must be made in response to, and exactly match, the terms of the offer

AND 2. Acceptance must be COMMUNICATED 5. When does Nazia’s letter take effect? Postal acceptance? • Letter has been posted. Usual postal rule is that acceptance occurs on dispatch of a correctly addressed letter. Adams v Lindsell, Household Fire Insurance v Grant Postal rule has been ousted! • Postal rule inapplicable on these facts. The words of the offer require actual communication of acceptance. Holwell Securities v Hughes. • The letter of acceptance although posted on 16th will not take effect until the letter reaches Paul on Wednesday 21st October.

6. What type of communication is Paul’s letter? • Paul’s letter to Nazia (received Tuesday 20th October) is purporting to revoke the offer. • Revocation (withdrawal of an offer) needs to be actually communicated. Byrne v Van Tienhoven, Routledge v Grant, Payne v Cave • Revocation cannot use the postal rule. • Revocation actually communicated Tuesday 20th October.

7. Is there an agreement? • • •

No. Revocation on 20th October comes BEFORE Nazia’s acceptance on 21st October. The offer is revoked before it can be accepted....