Chapter 3: Offer

Question 1

What is the definition of an offer

Answer 1

The expression of willingness to be bound under all or certain terms of a contract with the intention it becomes binding upon acceptance

Question 2

What is the definition of an invitation to treat

Answer 2

The expression of willingness to negotiate terms of a contract with the intent that new contract will be created at a later stage

Question 3

What is an agreement

Answer 3

• consesus ad idem (meeting of the mind) between 2 or more parties
• To become an enforceable contract the agreement has to be supported with consideration

Question 4

What are the 2 ways to identify if an agreement exists

What case shows this?

Answer 4

• The Eurymedon’s case -
  Identifying the marked slots for offer, acceptance, and consideration sequentially and there should be no vitating factors (mistakes)
• Objective test
  reasoning forward & reasoning backward

Question 5

What are the 5 ways to identify an offer

Answer 5

1. Examine pre contractual statements
2. Determine if it is an offer or is the statement soliciting for offers
3. Examine the definition of offer
4. Examine the definition of an invitation to treat
5. Examine the cases and how the courts have concluded

Question 6

What are the 2 legal concepts of an offer

Answer 6

• offer
• Invitation to treat

Question 7

How can we decide if it is an offer, what are the 2 approaches that are used to do this

Answer 7

Doctrine of judicial precedent and concludes that similar facts will attract similar decisions

Objectivity test

Question 8

What are unilateral contracts?

What are 4 things to note?

Answer 8

A promise for an act, where once the act is performed, the contract is binding/concluded

• Usually made to large groups of people, but doesn’t have to be
• terms must be clear as to what the Act is required to constitute acceptance
• Does not impose any obligation on the other party to do the act (it is their own willingness to do it)
• Doesn’t need to be communicated to offeror

Carlil v Cabolic Smoke Ball Co.

Question 9

What are bilateral contracts

Answer 9

Offer (treitel)
* No requirement fior for the offer to be in any particular form. Can be written, oral or by conduct

Invitation to treat
* negotiating

Question 10

What are the 4 types/methods of offers

Answer 10

1. Advertisements
2. Display of goods for sale
3. Auctions
4. Tenders

Question 11

What are the 2 types of advertisements?

Answer 11

Selling goods or services (ITT)

Advertisements for rewards (uni)

Question 12

Partridge v Crittenden

Answer 12

Facts: Advertised cocks and hens for sale, then was charged with offence of ‘offering for sale’ wild live birds contrary to Protection of Brids Act 1954

Held: ad was bilateral transactions (ITT), as he only sells when he has stock, and undergoes negotiations with his customers

Parker LJ stated that it makes business sense otherwise advertiser could find himself contractually obliged to sell more goods than he owned

Question 13

Carlil v Cabolic Smoke Ball Co.

Answer 13

Facts: D (vendors) of a medical preparation manufacturer placed a newspaper ad

$100 pounds to person who contracts influenza, or any disease after using their ball 3 times daily for 2 weeks

C in faith of the ad bought 1 ball and used it and got influenza

Held: ad was an offer. D was liable for anyone who before it is restricted, performs the condition

Question 14

Fisher v Bell

Answer 14

Facts:

1. Defendant had knife displayed at window with a price tag, statute made it a criminal offence to ‘offer’ such flick knives for sale

Held:

1. conviction was quashed as goods on display in shops are not offers but an ITT
2. Court appealed the literal rule of statutory interpretation
3. Display of goods in a ship window is ITT, as the offer is made by customer when he presents the goods on the cash register

Question 15

Pharmaceutical Society of GB v Boots Cash Chemist

Answer 15

Facts: A pharmacy was selling their products where customers pick up goods and put into their basket and take them to cashier to pay

D was charged with breach of Section 18 (1) of the Pharmacy and Poison Act 1993 where sale of drgus take place under suipervision of registered pharmacists

The pharmacist at the cashier is authoriesed to prevent customer from purchasing any drug if he say fit do do so

Held: sale of goods only took place at the cashier, and not when goods were taken from the shelves

Display of goods is ITT

Question 16

What is the general rule in auction sales

Answer 16

auctioneer by inviting bids is making an invitation to treat. Offer is (1st) made by the bidder which is accepted when the auctioneer (2nd) strikes down his hammer or an other customary manner

Question 17

Harris v Nickerson

Answer 17

Facts:

1. D auctioneer advertised that certain items including office furniture would be sold by him at Buury St Edmunds on a certain day
2. Condition was ‘highest bidder to be the buyer’. C attended the sale and office furniture was not up for sale
3. C brought action to recover 2 days of loss time. Said that it would be extremely inconvenient if the auctioneer had to give a notice everytime they withdraw something they said they were selling

Held:

• Auction was ITT. C didn’t even have a contractual agreement that was binding with the auctioneer, there was no acceptance to anything

Question 18

Warlow v Harrison

Answer 18

Facts: C had bid for a pony at D’s auction but sold it to himself (the highest bidder), there was no reserve
His appeal against rejection of his claim against the auctioneer, the appeal succeeded after court allowed amendment

Held: Baron Martin held there was a contract with the auctioneer that sale was to be without reserve

Question 19

What is the rule when auction contracts are made without reserve

Answer 19

Contracts that are made without reserve (meaning to say there’s no conditions that they instated, then by nature it should be sold to the highest bidder), in times of breach, has the right of action against the auctioneer

Question 20

Barry v Davies

Answer 20

Facts: D was selling 2 brand new engine analysers, each for about $14,521 pounds

They failed to get the price they bargained for, and C offered $200 for each machine (the highest bid then), but they refused to sell it

Few days later they sold $750 through an advert magazine
C brought proceedings against D contending that in an auction without reserve price the auctioneer was bound to deliver goods to the highest bidder

Held: holding of an auction for sale without reserve is an offer by the auctioneer to sell to the highest bidder

Question 21

What is the general rule of tenders

Answer 21

nature of tenders is ITT

Offer is made by the person who (1st) submits the tender (tenderee), and the acceptance is made when (2nd) the tenderer accepts one of them

Question 22

Spencer v Harding

Answer 22

Facts:

1. D advertised sale by tender of the stock in trade belonging Eilbeck & Co. They specified where it can be viewed and must be paid for in cash
2. No reserves stated
3. C made the highest bid but D refused

Held:

1. total absence of any words to intimidate that the highest bidder is to be the purchaser

Not always the highest bidder is winner, unless there are reserves

Question 23

Harvela Invetments v Royal Trust Co. of Canada

exception to the general rule

Answer 23

Facts: D decided to sell shares where 2 parties most likely to be interest to submit sealed competitive offer and stated they would accept the highest offer (made a reserve) received by them which compiled with terms of invitation

C tendered fix bid of $2.175M
D tendered a referential bid of $2.1M or $101,000 more than any other offer, whicher is higher. D accepted the second D bid

Held: D is bound to accept C’s bid as it was a unilateral contract to sell shares to the highest bidder

In this case is offer

Question 24

Blackpool Fylde Aero Club v Blackpool Borough Council

Answer 24

Facts: D (local authority) invited tenders for coincession to operate pleasure flights from Blackpool airport
Satiated that ‘council do not bind themselves to accept all or any tender.’

No tender received after the last date and time specified (12 March 1983, 12pm) shall be admitted for consideration

C posted bid at 11 March, 11am, but was letter was left in letterbox until 18 March
C’s bid was not considered by the Council cause it was late

Held: D’s contractually obliged to consider C’s tender and were therefor liable in damages

Question 25

What are the 2 types of terminations of offers

Answer 25

Operation of law Acts of parties

Question 26

What are the 3 types of acts of parties

Answer 26

1. Rejection by offeree 2. Counteroffer or request for more infroamtion 3. revocation (withdrawal)

Question 27

What are the 3 types of operation of law

Answer 27

1. Death 2. Time lapse 3. Destruction of subject matter

Question 28

# Counteroffer Hyde v Wrench | Counter offer

Answer 28

Facts: D offered to sell a farm to C for $1000 pounds which C responded by offering $950, through his agent. D rejected offer thenm C accepted D original offer D didn’t want a price lower than $1000 so when C did the counteroffer he just declined Held: No valid contract. C made his own counter offer which rejected the offer previously made

Question 29

Stevenson v McLean

Answer 29

held: Held there was no counter proposal (claimant said it was a CO) The words used in the telegram by C was nothing specific by way of an offer or rejection, but **merely an inquiry** Which should have been answered and not treated as a rejection of the offer

Question 30

What are the rules of lapse of time? Can an offer be revoked in this case? | 1 case

Answer 30

Lapse of time is when there is a **time stipulated** by the offeror, a deadline to communicate acceptance. Time given should be that a reasonable man would expect a **reasonable amount of time**, **given the situation or circumstances of the contract** During this, anytime **before the deadline**, the offeror can **revoke the offer**, provided the offer is communicated to the offeree - **Routledge v Grant (1828)**

Question 31

Can lapse of time be extended? | 1 case

Answer 31

Lapse of time will ultimately end after the stipulated time, unless there was a **collateral contract** with **consideration** provided to keep the offer open till the time stipulated - Offord v Davies (1862) If there was consideration (10rm to extent offer) then the time can be extended. But then the **offeror is now bound to the new collateral contract**. | **collateral contract** is contract made on the side

Question 32

# Destruction of subject matter Taylor v Caldwell | destruction of subject matter

Answer 32

Facts: D granted C’s license to use surrey gardens and music hall for series of concerts Contract concluded but before performance happened, the hall burnt down Held: Held that destruction of the hall rendered performances, and that the **contract automatically ended** If subject matter is destroyed after the formation of the contract, the contract can be discharged by way of frustration

Question 33

# Lapse of time Ramsgate Victoria Hotel v Montefiore | Lapse of time

Answer 33

Facts: 8 June D made application for shares and paid deposit Secretary submitted list of subscribers including D to directors who said its not advisable to it out immediately 8 November D received no commuincaiton so **withdrew the application**. 23 November shares allotted to D and letter sent requesting balance Held: allotment **must be made within a reasonable time**. Since it wasn’t made therefor D not bound to accept shares allotted

Question 34

What are the elements of revocation of an offer

Answer 34

* Anytime **before acceptance** * Revocation of the offer has to be **communicated to the offeree** | take note with unilateral offers is different case

Question 35

Revocation can be done by the offeror or | 1 case

Answer 35

**Dickinson & Dodds** - A realiable third party (someone they know, or are commonly known)

Question 36

What form of offer can't be revoked or doesn't apply to revocation | 1 case

Answer 36

Postal rule - Bryne v Van Tien Hoven | Delay in the revocation to the offeree will cause big issue

Question 37

What is the general rule for revoking unilateral offers

Answer 37

* Can be revoked anytime before the acceptance, although if they have already committed to the performance - it isin't fair (expenses & time spent)

Question 38

Errington v Errington | revoking unilateral offers

Answer 38

Facts: Offeror (father) sold offered to sell house with monthly mortgage to son and daugter. Father died and PR (personal representatives) of his estate sought to evict them Held: Father’s promist was a **unilateral offer**, which can’t be revoked once the couple had **embarked upon the performance** provide they did not leave the performance “incomplete or unperformed” (Offeror must have **knowledge** that the oferee has **embarked/started the act of acceptance**)

Question 39

Daulia v Four Mill Bank Nominees | revoking unilateral offers

Answer 39

Facts 1. offeror was’t fair to the offerees, needed his signature to complete acceptance. 2. Offeror got a better deal and didn’t want to sign Held * **Unilateral contract** * Goff LJ (obiter): offer **can’t be unfair or impossible to complete**

Question 40

Soulsbury v Soulsbury | revoking unilateral offers

Answer 40

Held: in the case of classic unilateral offer, once promisee acts on promise in offer, promisor can't revoke the offer