LU1024 Lecture 2

Offer and Acceptance

  • Final Offer and Acceptance

    • The final offer made by one party is the basis of the contract.
    • If the other party does not object to this last offer and performs the contract terms, they are effectively accepting the contract.
    • Example: If a party tears off a slip and signs it, they have accepted the final offer presented.

  • Role of Silence in Acceptance

    • Silence alone cannot be construed as acceptance. However, if the party performs an action in accordance with the last offer made, acceptance is implied through that performance.
    • This implies a negligence issue if the party did not fully understand the agreement they accepted.

  • Judicial Precedents

    • Reference to the case of Butler, where the courts stated that traditional rules should be applied rather than Lord Denning’s broader context approach.
    • If a counter offer negates the previous offer, the last offer made is the one that forms the basis of acceptance if no objection is raised.

Overriding Clauses

  • Purpose of Overriding Clauses

    • Overriding clauses are included at the start of the contractual relationship to prevent confusion should counteroffers be made.
    • These clauses must be expressly agreed upon at the outset of the agreement.
    • Example: In a supply agreement for electronic resistors, the supplier included a clause that invalidated any contrary conditions proposed by the buyer.

  • Impact on Battle of Forms

    • In typical scenarios of battles of forms, without overriding clauses, the last set of terms presented usually governs the contract.

Counteroffers and Acceptance

  • Understanding Counteroffers

    • Counteroffers are made when one party responds to an offer with altered terms, effectively negating the original offer.
    • Without overriding clauses, previous offers are considered void if a counteroffer is made.
    • Example dispute at the end of lectures concerning an initial accepted offer with no clear terms showing acceptance of a counteroffer.

  • Case Reference for Counteroffers

    • The case of Hide and Wrench exemplifies the implications of counteroffers and their effects on initial offers.

Acceptance in Unilateral Contracts

  • Characteristics of Unilateral Contracts

    • Unilateral contracts involve an offer made to the public at large (e.g., a reward for finding a lost item).
    • Acceptance occurs through performance of the specified action.

  • Revocation of Offer

    • The general rule allows for the revocation of an offer before acceptance.
    • However, once performance has begun, the offer cannot be revoked.

  • Cases Illustrating Performance as Acceptance

    • Dalai Limited v. Paul Milbank Nominees: Once the offeree begins performing the terms of the offer, acceptance is established even if the performance is incomplete.
    • Carlisle and Carbolic Smokeball: Acceptance occurred once Mrs. Carlisle adhered to the advertised conditions.

Intention to Create Legal Relations

  • Requirements for Contractual Intention

    • There must be a serious intention among parties to enter into a legal contract, which the context can affect.

  • Presumptions Regarding Intention

    • In domestic settings (e.g., family relationships), courts generally presume that no intention to create legal relations exists to avoid trivial lawsuits.
    • This presumption can be rebutted, especially during divorce or separation as relationships transition from familial to contractual.

  • Case Law around Domestic Relationships

    • Jones v. Padavatton: The courts demonstrate reluctance to enforce agreements among family members absent clear intent.
    • Merit and Merits v. Family Dynamics: Intentions of separating parties are viewed through a commercial lens upon divorce, necessitating legal arrangements.

Contrasted Cases on Commercial vs Domestic Relations

  • Case References
    • Blue v. Ashley: Examined the intention from comments made in a social setting (pub) and ruled them as not binding.
    • The drunken