Offer and Acceptance

An Offer - A statement of terms upon which a person is prepared to enter into a contract. 

Invitation to treat - An indication of willingness to enter into a contracted obligation, without offering contractual terms. An invitation for an offer. 'May be prepared to sell'.

Goods DisplayedPharmaceutical Society v Boots (1953) - no offence comitted. product on shelves were an invitation to treat.

Advertisements: Partridge v Crittenden (1968) - no offence comitted, invitation to treat.

Carlill v Carbolic Smoke Ball Co. (1893) - constituted an offer, possible to make an offer to the world.

Harvey v Facey (1893) - no offer of sale, meerly a response to a request for information 

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Communication & Ending an Offer

Communication: Evidence must be proved otherwise offeree cant accept. Terms of the offer must be clear and not vague. It is possible to make an offer available for a fixed period of time.    Guthing v Lynn (1831) - Too indistinct to enforce. No indication given to what the promise really meant. 

Ending an Offer: 

Revocation: An offerer is entitled to withdraw an offer prior to acceptance. Dickinson v Dodds (1876) - no binding contract. Communication via friends or third party to end an offer is valid. Entitled to change your mind on how long an offer stays open for.

Rejection: When an offeree rejects an offer, the offer ceases.  Counter offers end the initial offer. Hyde v Wrench (1840) - counter offer ends existing offer. Offer could no longer be accepted. 

Lapse of Time: Easy to identify if there was a particular date. Ramsgate Victoria Hotel v Montefiore (1866) - delay meant the offer had lapsed. 

Death: acceptance can take place until the offeree is aware of offerers death. If offeree dies, the offer ends. 

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Acceptance & The Postal Rule

  • Acceptance Must be: positive, by words, communicated, clear (e.g. handshake, signature)
  • Acceptance Can't be: Silence, a request for information, 

Felthouse v Bindley (1863) - there was no contract, no acceptance (silence doesnt amount to acceptance), obligation cannot be imposed. 

Yates v Pulleyn (1975) - 'recorded delivery or post' was valid for acceptance. 

The Postal Rule: 3 conditions -

  • the rule only applies if post is the expected method of communication
  • the letter must be properly addressed and stamped
  • the offeree must provide proof of postage

Adams v Lindsell (1818) - acceptance not valid at the time of posting. Did not matter that it had not been recieved by the offerer.

The postal rule doesnt apply to electronic methods of communication Brinkibon Ltd v Stahag (1982) - accepted when it would be reasonable to assume it would be open

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Consideration is something of value that a party offers to exchange within a contract. 

  • Up to the parties to declare adequacey not the law. Thomas v Thomas (1842) - payment was consideration, despite its comparison to the market value of the property (£1 annually)
  • Past consideration is not sufficient - Re McArdle (1951) - contract wasnt enforceable. The consideration was past and prior to the agreement and therfore no value. 

Performing a pre-existing duty to an existing contractual party cant be consideration for new contract. 

  • Stilk v Myrick (1809) - payment of extra monies wasnt enforceable. No new consideration beyond what they were already obliged to do. 
  • Williams v Roffey (1990) - there was additional consideration so the contract was enforceable. The consideration was the confirmed benefit of timely completion. 
  • Consideration can be present even if an individual is under a contractual duty - Scotson v Pegg (1861) - an existing duty owed to a third party can amount to valid consideration for a new and separate contract. 

A person cant be sued/ sue under a contract, unless there is consideration (Tweedle v Atkinson 1861)

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Intention to Create Legal Relations (ITCLR)

It is necessary to prove for the establishing of a contract that the parties did intend for the contract to be legally enforceable. 

Family relations - usually not ITCLR as agreements arent usually legally enforceable. 

  • Balfour v Balfour (1919) - not an enforceable contract, purely domestic
  • Merritt v Merritt (1970) - legally enforceable. parties had ITCLR. 

Business and Commercial - agreements are usually binding. 

  • Jones v Vernon Pool (1938) - the wording on the coupon indicated there was no ITCLR. 
  • McGowen v Radio Buxton (2001) - there was ITCLR. the purpose of the competition was a commercial advantage.
  • Kleinwort v MMC (1989) - their correspondance was a letter of comfort rather than an indication of ITCLR.
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