ADM 3123 - Quiz 2

Contract Law - Offer and Acceptance

What makes an Offer?

It is a promise to be bound, on specified terms, as soon as it is accepted. Contains necessary essential terms (e.g., price), which are fixed and certain.

What is the difference between “Invitation to Treat” vs. "Offer”?

Invitation to Treats are “inviting” offers rather than making them. It is an indication/expression the party wishes to do business or is open to negotiation. When a person agrees to the terms of the invitation, that person is who makes an offer. The maker of the invitation is the offeree.

What are some typical situations that might involve invitation to treat?

• Advertisements

• Display of goods in stores

• Price lists/goods catalogs

Carlill v Carbolic Smoke Ball Company

This was a case where the Smoke Ball Company made an offer for “anyone who contracts the increasing epidemic influenza, colds, or any disease… after having used the ball three times daily for two weeks according to the printed directions…”

This statement was considered to be an “offer” due to “anyone who,” thus Carbolic Smoke Ball Co. had to pay out the 100 British Pounds per person as claimed.

Established that an offer is a promise to be bound, on specific terms, and with sufficient certainty, as soon as the offer is accepted.

Pharmaceutical Society of Great Britain v Boots Cash Chemists

Boots had drugs displayed on open shelves, with a pharmacist supervising the sale of drugs at the cashier’s desk. Two customers selected items from a shelf, put them into a basket, and took them to the cashier. Ruling stated display of drugs is an invitation to treat, thus the offer was made when customers brought items to the cashier. The sale is not completed until the shopkeeper accepts the sale.

Thornton v Shoe Lane Parking

Ruling made the machine the offerer as the machine is in no place to negotiate. The acceptance occurs when the offeree places money into the slot to pay.

What are the four ways to terminate an offer?

• Revocation/withdrawal (any time prior to acceptance).

• Rejection

• Modification (i.e., counteroffer)

• Lapse of time (i.e., time is specified “by such date/time” in the offer and it lapses past that date before acceptance)

What is the mirror rule for acceptance?

The purported acceptance must mirror the offer by demonstrating unconditional, unqualified, and complete willingness to enter into the contract on the precise terms proposed.

Hyde v Wrench

Wrench offered to sell property for $1.5 million, Hyde counter-offered with $1 million. Wrench rejected and Hyde tried to enforce the previous $1.5 million offer since Wrench made it. Ruling stated the original offer became unenforceable due to the counteroffer made by Hyde.

Felthouse v Bindley

Uncle wanted a horse for a set price “if i hear nothing else i consider the horse is mine.” Nephew intended but gave no verbal acceptance. Ruling: nothing has been done to vest the horse in the uncle’s name

What is the general rule for acceptance?

When the offerer receives communication of acceptance, the offer is accepted.

Can be the following formats:

• in-person, telephone

• writing, mail/post, fax, email

• clicking a button (Rudder v. Microsoft)

• mere conduct/action (Lowe v. Upper Clements Family Theme Park)

Lowe (DJ) Ltd. v Upper Clements Family Theme Park

Ruling was made that mere conduct/action counts as acceptance. Lowe delivered the crane, thus accepted.

What is the postal and recipient rules for acceptance?

Recipient - acceptance occurs upon receipt (e.g., email, verbal, etc.)

Postal - if using post/mail, acceptance is effective at the time of posting the acceptance letter

• Adams v. Lindsell case is precedent for this.

Christmas v Fort MacKay

Forming employment contract between two provinces over e-mail correspondence, acceptance was formed in location the acceptance was received (i.e., in this case, Alberta).