OFFER AND ACCEPTANCE

agreement

agreement

meeting of minds on the subject of the agreement

consensus ad idem

meeting of minds/agreement

what type of approach did the courts develop to test an agreement?

an objective approach

an agreement consists of:

1. an offer

2. acceptance

3. intention to create legal relations

butler machine tool v ex-cell-o corporation

the ‘last shot fired’ wins in a battle of the forms

what approach did lord denning mr suggest regarding the battle of the forms?

a more liberal approach looking at all circumstances to see if parties have objectively reached an agreement

invitation to treat

invitation for the other party to make an offer, which the former party is free to accept or reject

gibson v manchester city council

lord diplock: ‘may be prepared to sell’ sufficed as an invitation to treat

partridge v crittenden

advertisement: advertisment of a wild bramblefinch bird held not to be an offer

unilateral offer

one person makes a promise to the world in exchange for fulfilment of certain requirements

carlil v carbolic smoke ball

satisfying conditions for using the smokeball constituted acceptance of a unilateral offer

pharmaceutical society v boots

displays: display of a product on a shelf was not an offer; customer offered to buy the product by taking it to the till

fisher v bell

displays: display of flick knives was an invitation to treat

auction with reserve

each bid is an offer accepted by the auctioneer

auction without reserve

auctioneer makes a unilateral offer which is accepted by placing the highest bid

british car auctions v wright

the auction of a car was an invitation to treat

revocation

offeror may revoke an offer before acceptance takes place

dickinson v dodds

revocation: revocation of an offer can be communicated through a third party

byrne v van tienhoven

revocation: the postal rule is not applicable to a revocation of an offer

ways to terminate an offer:

1. revocation

2. rejection from offeree

3. lapse of time

4. counter offer

5. death or insanity

ramsgate victoria hotel v montefiore

lapse of an offer: a long period of time had passed between the offer and acceptance therefore the offer had lapsed

hyde v wrench

counter offer: a proposal of different terms by the offeree kills the original offer

bradbury v morgan

death or insanity: contracts cannot automatically be revoked by death alone and notice must be given to the offeree, except when there is a unilateral offer

importance of communication

acceptance must be communicated to the offeror

instantaneous communication

generally binding when it is received

entores v miles

postal rule does not apply to acceptance delivered by instantaneous communication

brinkibon v stahag stahl

where risk of non-delivery of acceptance lies with the offeror, he is bound even if it wasn’t received

non-instantaneous communication

postal rule applies

postal rule

when post is the agreed means of communication, a posted acceptance is binding from the moment of posting, so long as the letter is properly stamped/addressed

adams v lindsell

case authority to the postal rule

holwell securities v hughes

postal rule will not apply if expressly excluded in the offer

felthouse v bindley

silence cannot constitute acceptance even when the offeree has intention to accept

rust v abbey life

woman’s inaction over 7 months sufficient to establish acceptance of an investment policy taken out on her behalf

hyde v wrench

most counter offers are interpreted as rejections of the original offer

stevenson, jacques and co v mclean

a request for information is not a counter offer

tenders

request for tenders represents and invitation to treat and each tender submitted amounts to an offer

blackpool and fylde aero club v blackpool bc

an invitation to tender before a deadline can imply a unilateral contract to consider all timely bids

machines

machine represents the offer and acceptance is inserting the money

thornton v shoe lane parking

terms of a contract written on the back of the ticket is too late to be incorporated

scammell v ouston

vague agreements: buyer purchased lorry with price to be paid ‘on hire purchase terms’ and HoL held the agreement was uncertain, therefore the contract was void

may and butcher v the king

incomplete agreements: HoL held the agreement was incomplete; lacked price and payment schedule

an agreement to agree is…

unenforceable

domestic agreements

no presumption of intention to create legal relations

commercial agreements

presumption of intention to create legal relations

prima facie rules

first impression rules which can be reversed if appropriate

balfour v balfour

married at the time of agreement therefore no intent to create legal relations

meritt v meritt

presumption of no intent in domestic agreements is weaker when splitting property at the end of a relationship (divorce)

jones v padavatton

relationship between mother and daughter a purely domestic agreement

parker v clark

detrimental reliance by one party is sufficient to rebut the presumption in domestic agreements

radmacher v granatino

parties to increasingly common pre-nuptial agreements can be thought to intend legal relations

rose and frank v crompton bros

presumption of legal intent in a commercial agreement was displaced by an express statement of ‘binding in honour only’