Topic 2 - Agreement: offer and acceptance

Flashcards covering the foundational concepts of contractual agreement, offers, acceptance, and termination rules based on English contract law.

Agreement

The first essential element of a contract, typically constituted by a corresponding offer and acceptance.

Bilateral contract

A contract involving the exchange of promises between two parties.

Unilateral contract

An exchange of a promise for an act, creating an obligation only for the offeror (e.g., a reward for finding lost property).

Objective theory of agreement

The principle that the legal effect of words or actions is determined by the reasonable inference they support, rather than the subjective intentions of the parties (Smith v Hughes).

'Snapping up' doctrine

An exception to the objective approach where an offeree is not permitted to accept an offer they know is mistaken as to its terms (Hartog v Collins and Shields).

Offer

An expression of willingness to contract on certain terms, made with the intention that it will become binding upon acceptance.

Invitation to treat

An indication of a willingness to do business, invite offers, or commence negotiations (e.g., a display of goods in a shop window).

Statement of intention

A communication where a party states they intend to do something, which is not an offer (Harris v Nickerson).

Supply of information

Providing facts or answering queries (such as the lowest price for property) without intending to be bound by an offer (Harvey v Facey).

Cross-offers

Identical offers sent simultaneously between parties (e.g., A to B and B to A) which do not result in a contract until accepted (Tinn v Hoffman).

Mirror image rule

The requirement that an acceptance must be a complete agreement to each of the terms of the offer without variation.

Counteroffer

A response to an offer that attempts to add new terms, thereby rejecting and destroying the original offer (Hyde v Wrench).

'Last shot' rule

The principle in a 'battle of the forms' where the last set of terms sent before the contract is performed typically prevails (Butler Machine Tool v Ex-Cell-O).

Law of restitution

A branch of civil law that may impose an obligation on a party to pay for benefits received even if no contract exists (BSC v Cleveland Steel).

Silence as acceptance rule

The general principle that silence cannot constitute acceptance when it would involve forcing a contract on an unwilling party (Felthouse v Bindley).

Unmanned receptor

A machine like a fax or email server; communication to it is effective from the time it is reasonable to expect the machine to be checked (The Brimnes).

Postal acceptance rule

The exception to the general rule of communication, stating that acceptance is complete the moment it is posted (Adams v Lindsell).

Revocation

The withdrawal of an offer, which must be communicated to the offeree at any time before acceptance to be effective (Payne v Cave).

Collateral contract (Auctions)

Reference to an auctioneer's separate agreement to accept the highest bid in an auction without a reserve price (Warlow v Harrison).

Lapse of an offer

The termination of an offer because a stipulated time period has passed or a reasonable amount of time has expired (Ramsgate Victoria Hotel v Montefiore).

Condition unfulfilled

Where an offer is made subject to a condition (implied or express) that is not met, causing the offer to terminate (Financings Ltd v Stimson).