Ch 2.100 - 2.150

Chapter 2: Agreement

Overview of Invitations to Treat

• Invitations to Treat: A legal term referring to a facilitator's intention to negotiate a deal rather than make a binding agreement.

  • Common Examples: Calling for bids at auctions, calling for tenders, and displaying goods in a shop.

  • Pharmaceutical Society of Great Britain v Boots Cash Chemists: Demonstrates that displaying goods is an invitation for customers to make an offer by choosing items and attempting to purchase them.

Offer and Acceptance in Auctions

• Auction Process: The auctioneer invites offers rather than making them. Each bid serves as an offer, and the acceptance occurs when the auctioneer accepts the final bid by the fall of the hammer.

• Tenders: Similar to auctions, invitations to tender signal readiness to accept offers. Specific conditions, such as accepting the highest bid indicated in the advertisement, transition it into an offer.

  • If a detailed process is specified, a contract may be created upon the submission of a tender.

Termination of Offers

• Withdrawal of Offer: An offeror may retract their offer at any time before acceptance without ramifications, even if a time period is mentioned for its validity.

  • Must communicate the withdrawal effectively to the offeree.

• Reasonable Time for Acceptance: If no time limit is specified, acceptance must occur within a reasonable timeframe.

• Options: If value is exchanged for keeping an offer open, a contract known as an option is formed, preventing revocation during the stipulated period.

  • Case Example: Goldsbrough Mort & Co Ltd v Quinn illustrates that options are binding when consideration is given.

Case Study: Goldsbrough Mort & Co Ltd v Quinn (1910)

Summary of the Case

• Facts: Quinn offered Goldsbrough the right to purchase land within a specified timeframe in exchange for five shillings.

• Judgment: The buyer’s appeal for specific performance was upheld as the option was not revocable once consideration was given.

  • Key Legal Principle: An option for value cannot be terminated without breach of contract once accepted.

Judgment Quotes

• GRIFFITH CJ: Explained how agreements consist of an offer and acceptance, emphasizing that options with consideration are binding.

Unilateral Contracts and Acceptance

• Complexity of Unilateral Contracts: Acceptance involves performance of an act; thus, termination of the offer relies on whether the act has commenced.

• Mobil Oil Australia v Wellcome International: A case discussing if Mobil could revoke its incentive scheme despite franchisees starting to meet performance criteria.

  • The court found that revocation is possible unless implied promises or estoppel apply.

Termination of Unilateral Offers

• Finding: Offerors can revoke unilateral offers unless an implied promise not to revoke exists or estoppel is established.

• Key Judicial Insights: Emphasis on no universal rule against revocation after performance commencement; cases should be viewed individually regarding offer expectations.

Acceptance in Contract Law

Principles of Valid Acceptance

• Consensus Ad Idem: Agreement must exist for a binding contract; acceptance requires full assent to offer terms without variations.

• Response to Offer: Acceptance must directly correspond to the offer, indicating clear acknowledgment of the offer terms.

  • In bilateral contracts, only directed persons can accept; in unilateral contracts, action constitutes acceptance.

Key Cases Illustrating Acceptance

• Hyde v Wrench: Example of counter-offers terminating original offers.

• Tinn v Hoffman & Co: Clarifies that a mere inquiry does not equate to rejection, maintaining the offer's viability.

• Stevenson Jacques v McLean: Highlights that requests for clarifications do not cancel the original offer.

Conclusion on Offer and Acceptance

• Understanding the dynamics of offers, invitations to treat, unilateral contracts, and acceptance principles is critical in determining contact validity and enforceability in legal situations.