What is an offer?
An offer is the starting point for a contract, and a proposal (a promise) showing a willingness to contract on firm and definite terms.
What is a bilateral offer?
A bilateral offer is a promise that to be accepted requires communication of a promise in return; it is often one made to a specific individual or group.
What is a unilateral offer?
A unilateral offer is a promise that does not require acceptance to be promised or communicated; doing the act required is enough. Such offers are often made to the world in general.
Who is the offeror and the offeree?
- The offeror (or ‘promisor’) is the person making the offer.
- The offeree (or ‘promisee’) is the person to whom an offer is made
What are the cases for a unilateral offer?
Carlill v Carbolic Smokeball Co - Carbolic Smoke Ball Co advertised that any person taking their smoke ball as directed and catching flu could claim £100 from them. As evidence of their seriousness they placed £1,000 in the bank. Mrs Carlill took the ball as directed and still caught flu.
The advertisement was a unilateral offer to the whole world that she had accepted. Her compliance with the terms had turned it from an offer to the whole world to contract with her personally.
What different ways can an offer be made?
An offer can be express (made verbally or in writing) or implied (arising as a result of conduct or circumstances).
For example, in Wilkie v London Passenger Transport Board the parties’ actions implied the formation of a contract on a bus journey.
What does it mean for an offer to be definite in its terms?
The offer must be definite in its terms.
Words such as “might be prepared” are not an offer.
Gibson v Manchester City Council [1979]
The council wrote to a tenant saying “we may be prepared to sell to you … “. This was not an offer.
Held: The tenant’s formal application stating that they wanted to buy the house was the offer, and it was up to the council to accept or reject it.
A request for further information is not an offer.
Harvey v Facey [1893]
Harvey sent a message “will you sell me Bumper Hall Pen? State the lowest price”. Facey replied “lowest price for Bumper Hall Pen £900”.
Held: Facey’s reply was a response to a request for further information and not an offer.
Who can make an offer?
An offer can be made by anyone: an individual, a company, an employee or even a machine.
Thornton v Shoe Lane Parking
Thornton put money into a machine to open a car park barrier and was given a ticket.
Held: The owner of the car park made the offer, which Thornton accepted when he put his money
in the machine.
To whom can an offer be made?
An offer can be made to an individual, a group of people or to an organisation like a company. It can even be made to the world at large, for example, an offer to pay a reward to anyone finding a lost dog.
What is an invitation to treat?
An ITT is not an offer and therefore cannot be accepted and form a contract. An ITT is merely an indication of a willingness to start negotiations and it invites the other person to make an offer, which can then be accepted or rejected.
What are the 3 ways of inviting an individual to treat?
a) Goods on display in a shop
b) Advertisements
c) Auctions
What is the case for goods on a display shop?
In Fisher v Bell, a shopkeeper was prosecuted because he had a flick knife in his shop window with a price label on it, he was charged with offering the knife for sale.
Held: he was not guilty under the Restriction of Offensive Weapons Act 1959 as he was not offering the knife for sale as a window display is merely an invitation to treat.
What is the case for advertisments?
Generally, an advertisement is an invitation to treat and not an offer.
In Partridge v Crittenden, a newspaper advertised ‘bramblefinch cocks and hens [£1.25]’. It was an offence to offer wild birds for sale.
Held: Crittenden had not offered the birds for sale; the advertisement was merely an invitation to treat.
What is the exception for advertisements being an invitation to treat?
However, an advert may be classed as an offer if there are terms included in the advertisement that the customer has acted upon, or if an advertisement contains a clear indication that there is an offer because it is expected to be taken seriously - as demonstrated in Carlill. This usually occurs in a unilateral contract rather than a bilateral contract.
In Lefkowitz v Great Minneapolis Stores, the defendant store advertised a sale at 9am Saturday of 3 fur coats worth $100 for only $1 – first come first served. On the day, the seller refused to sell a coat to one of the first three customers as he was a man.
Held: This was an offer, not an invitation to treat, as it required certain terms to be fulfilled. The man had accepted the terms of the offer so he was entitled to the coat for $1.
What is the case for auctions?
The auctioneer, in inviting bids, is deemed to be issuing an invitation to treat. Bids are offers, and these are accepted or rejected by the auctioneer. Acceptance is made when the auctioneer bangs his hammer on the table, as confirmed in BCA v Wright.
How long does an offer last?
An offer can only be accepted while it is open. The offer comes into existence when it is communicated to the offeree. Once it has ended it cannot be accepted. An offer cannot be accepted unless the person who is seeking to accept it knows of its existence.
What are the 5 ways in which an offer can end?
a) Revocation
b) Rejection
c) Counter-offer
d) Lapse of time
e) Death
How does revocation end an offer?
The offer can be revoked (withdrawn) at any time before acceptance, but this must be communicated to the offeree (even by a third party).
Byrne v van Tienhoven
Held: the revocation of an offer must be communicated to the offeree.
Dickinson v Dodds
Held: a reliable third party could notify the offeree of the revocation of an offer.
When is revocation not allowed?
The courts generally do not allow the offeror to withdraw the offer when the acceptance is an ongoing act. This is to protect the offeree, the weaker party, who would otherwise be greatly disadvantaged.
Errington v Errington
Held: Paying the mortgage was an ongoing act of acceptance. Once the couple had begun paying the offer could not be withdrawn.
Shuey v US
Held: Revocation of a unilateral offer must be by the same method as the original offer or one of equal notoriety. The offer had been effectively revoked.
How does rejection end an offer?
If the offeree rejects the offer, it is extinguished. The rejection of the offer must be communicated. If the offeree attempts to accept the offer after rejection, they are in fact making a fresh offer that can be accepted or rejected. The rejection must be a clear rejection.
How does a counter offer end an offer?
If the offeree replies to an offer with a counter-offer – changing elements of the original offer, such as suggesting a different price or delivery date – then the original offer ends. There is no acceptance since the offeree is not agreeing to all of the terms of the offer. The counter-offer completely removes the original offer. If the counter-offer is rejected by the offeror, then the offeree cannot go back to the original offer.
Hyde v Wrench
On the 6th June, Wrench offered to sell his farm to Hyde for £1,000. Hyde offered £950 but, on the 9th June, Wrench rejected Hyde’s offer. On the 21st June Hyde tried to accept the offer to buy at £1,000. Wrench refused to sell at £1,000, as his original offer had ended with Hyde’s counter-offer of £950.
Held: Hyde’s counter-offer had extinguished Wrench’s original offer. He did not have to sell.
What is not a counter offer?
A request for further information is not a counter-offer
Stevenson v McClean
Stevenson had been offered goods for sale and he enquired as to whether he could have two months’ credit. He didn’t hear back and so accepted the offer.
Held: the query about credit was only a request for information and not a counter-offer. The offer therefore remained open and had been accepted.
How does lapse of time end an offer?
An offer can come to an end by lapse of time. An offer can be made for a fixed period of time and then come to an end. Where no time is given, the offer will lapse after a reasonable time.
Ramsgate Victoria Hotel v Montefiore
On 8th June, Montefiore offered to buy shares at a fixed price in the hotel. On the 23rd Nov the offer was accepted, but Montefiore no longer wanted the shares.
Held: the long delay meant the offer made by Montefiore had lapsed, as a reasonable time had passed. It could not be accepted.
How may death end an offer?
Death may also end an offer, if the offeree is aware that the offeror has died and the contract requires personal performance. However, if the contract can be performed by another person, for example someone from the deceased offeror’s company, and the offeree was unaware of the offeror’s death, then it may be decided that the offer has not ended, as in Bradbury v Morgan.
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Offer24
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Acceptance20
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Consideration23
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Intention to Create Legal Relations10
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Express and Implied Terms18
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Sales of Goods and Services Act - Terms Implied by Statute in non-consumer contracts4
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Consumer Rights Act 2015 - Terms Implied by Statute in Consumer Contracts19
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Conditions, Warranties and Innominate Terms6
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Misrepresentations28
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Economic Duress10
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Performance8
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Frustration13
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Breach of Contract4
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Exclusion Clauses14
