1.1 Agreement

What is an offer?

a manifestation of willingness to be bound, on certain terms, without further negotiation.

What is the effect of an offer?

the offeree acquires the power to create a contract by accepting.

What is an invitation to treat?

an attempt to induce negotiations or an offer

Why did the House of Lords find that there was no agreement in Gibson v Manchester City Council [1971]?

The House of Lords adopted the “conventional approach”, looking for literal offer and acceptance in the correspondence.

The council’s letters were too tentative to be an offer, and were instead an invitation to treat.

Why did Lord Denning in the Court of Appeal find an agreement in Gibson?

The Court of Appeal, under Lord Denning, argued for a holistic approach. He argued that there was agreement based on the correspondence as a whole.

Look at the correspondence as a whole and see if the parties have come to an agreement on everything that was material.

It is a mistake to think that all contracts can be analysed as offer and acceptance

Why was there agreement in Storer?

The Council had attached an agreement in the correspondence, which Storer signed and agreed to.

What is the precedent for Pharmaceutical Society v Booths [1953]?

Goods on display are an invitation to treat, rather than an offer. The customer offers to buy the product at the till, which the cashier then accepts.

• If goods were the offer, then the customer, accepting by picking it up, would never be able to put it back. (Romer).

• The shopkeeper is not offering that anyone in the world can come and pick up these goods. (Birkett).

What are the 5 precedents of Carlill v Carbolic Smoke Ball?

1. Advertisements can be invitations to treat if the advert contains clear language o commitment.

2. Reward promises may be offers.

3. Offers to all the world are offers

4. Offers cannot be too uncertain

5. Mere puff is not an offer

Why was there an offer in Carlill but not Pepsico?

In Carlill, the company showed sincerity by depositing money in a bank,

Hyde v Wrench

Counter-offers are rejection

Shuey v United States

Offers can be revoked by the offeror before acceptance, this can happen through a third party.

Offers to all the world can be revoked if they are revoked in the same way the offer was made.

2 additioal end of offer conditions

1. failure of condition

   1. lapse of timeW

What is acceptance?

a manifestation of assent to the transaction proposed in the offer.

What are the 4 elements of acceptance?

1. Appropriate method.

2. In response to an offer

3. be communicated to the offeror

   1. Correspond exactly with the terms of the offer

Felthouse

Silence will not suffice as acceptance, except for unilateral contracts

Postal Acceptance Rule (Household Fire v Grant)

acceptance in a properly prepaid and addressed letter is effective at the point of posting, even if the letter never arrivesExe

Exception to the Postal Acceptance Rule

Instantaneous methods of communication (Entores)

Why did Thesiger in Household Fire support the Postal Acceptance Rule?

• It creates a meeing of minds.

• The Post Office is an agent of both parties. If this agent makes a mistake, the burden should fall on the offeror as the master of the offer, who could have stipulated that he must have personally received the acceptance.

Why did Bramwell in Household Fire oppose the PAR?

By not receiving an acceptance, the addressee has no choice but to anticipate that their offer has not been accepted.

Why are contracts assessed objectively?

• Prevents Carelessness

  • Creates common standard, providing stability

Tamplin v Jones

Contracts are generally assessed objectively, not subjectively

Chwee Kin Keong v Digilandmall

Contracts are void if one party has made a mistake and the other party is aware of this mistake