1
Q
To make an offer, and offeror must make a what?
A
- A clear and unequivocal statement that he will regard himself as legally bound to perform his promise if the other party accepts his offer.
2
Q
What is not an offer? (3)
A
- Invitation to Treat
- Supply of Information
- Statement of Intention
3
Q
Invitation of Treat: Example?
A
- Goods on a store shelf in not an offer, takes place at the till.
- We can return it otherwise
4
Q
Supply of Information: Example?
A
- This is how much it is worth, if you make an offer, I may accept it.
5
Q
Statement of Intention: Example?
A
- Parties sometimes communicate that they intend to do something.
- the communication is not intended to be binding
- There is no offer
6
Q
Goods on display in a shop are what kind of offer?
A
- Not an Offer
- They are an invitation to treat
7
Q
Are Advertisements offers?
A
- Generally no
- Invitation to Treat
8
Q
Advertisement case law? (1)
A
Partridge v Crittenden
9
Q
Partridge v Crittenden (1968)
A
- Hens and cocks for sale in advertisement
- they were protected birds, making it illegal to offer to sell them
Held: - Not guilty
- It was not an offer
- Invitation to treat
10
Q
Is supplying information an offer?
A
- No
- Supply of information
11
Q
Is a Statement of Intention an offer?
A
- No
- the communication is not intended to be binding, thus there is no offer
12
Q
What is a Bilateral Contract?
A
- They are contracts where there is an outstanding obligation on either side
13
Q
What is a Unilateral Contract?
A
- A contract where only one party has an obligation from the outset
- ex: Missing cat reward, no obligation to accept, only to pay
14
Q
Carlill v Carbolic Smoke Ball Co. (1893) (Issue)
A
- Unilateral Contracts
15
Q
Carlill v Carbolic Smoke Ball Co. (1893) (facts)
A
- Carlill purchased a smoke ball to get rid of the flu
- Carlill used it according to the directions
- D offered a reward to anyone that was still sick after using it for so long (£100)
- Carlill sought the reward
Held: - It was a unilateral offer
- Carlill fulfilled the terms and accepted it
16
Q
Termination of an offer?
A
- Unless acceptance happens, there is no contract
- Acceptance must occur in order for the contract to be binding
- Offer is still open if these do not happen
17
Q
Methods of Terminating a Contract? (4)
A
- Revocation
- Rejection
- Expiry
- Lapse
18
Q
Termination By Revocation?
A
- Must be communicated to the Offeree or an intermediary
- Offeree must actually receive the revocation
- Cannot accept if revoked
19
Q
What if the offeree is not aware of the revocation and accepts the offer?
A
- revocation is no good
- there is a binding contract
- Offeree must actually receive the revocation
20
Q
What if the offeree began the act of acceptance for a unilateral offer?
A
- Cannot be revoked
- Once acceptance has started, cannot revoke the offer
21
Q
Rejection?
A
- Offer may be rejected by the offeree
- Expressively or by counter-offer
- If there is a condition in the offer that is not fulfilled, the offer terminates
22
Q
How can an offeree reject an offer? (2)
A
- Expressively
- Counter-offer
23
Q
What happens if a condition in the offer is not fulfilled?
A
- Offer terminates
24
Q
Lapse & Death
A
- Offer may lapse for want of acceptance
- Offeror dies, offer may lapse
25
Acceptance
- Must be communicated
- There is no contract until offer is accepted
- Revocation cannot take place after offer is accepted
26
Exception to acceptance? (3)
- Postal Acceptance Rule
- Prescribed mode
- Via Third Party
27
Acceptance in response?
- Must be in response to the offer
28
Knowledge of Acceptance?
- Knowledge of the offer is required
| - Not sufficient that the wishes of the parties simply coincide through accident
29
Communication of acceptance?
- Acceptance must be communicated to the offeror
| - Offer cannot be accepted by silence
30
Exception to the need for communication?
case?
- Where the offeror has waived the requirement for communication
- Carlill v Carbolic Smoke Ball Co.
31
Postal Acceptance Rule?
- Acceptance by post takes effect where and when letter is posted (Dispatch Rule)
- Exception to rule that acceptance must be communicated
- Risk of rule falls on offeror
- Only applies if reasonable for offer to be accepted by post
32
Telegraph Acceptance Rule
- Where it is reasonable to use telegraph
| - Acceptance takes place when the acceptance is handed to the person authorised to take telegraphs
33
Telexes and telephones?
- Postal rule does not apply to these
- They are a form a instantaneous communication
- Not an exception
34
Electronic Contract Formation?
- General Contractual principles will be applied to issues raised by electronic correspondence
35
Prescribed Method of Acceptance
- an offeror may prescribe that acceptance is made in a certain way
- Offeree must accept via the prescribed method if the offeror clearly states that he will only be bound if the prescribed method is followed
36
Brogden v Metropolitan Railway Co. (Issue Topic)
Communication of Acceptance
37
Brogden v Metropolitan Railway Co. (Facts)
- Railway and Coal
- Agent did not sign the contract
- Had issues, referred to contract to resolve them
-Sued and said there was no contract
Held:
- Contract was enforceable because they behaved as so
- Can accept through behviour
38
Brogden v Metropolitan Railway Co. (Principle)
Can accept a contract through behaviour
39
Gibbons v Proctor (Facts)
- Police officer unknowingly fulfilled a reward
Held:
- Court allowed officer to collect the reward
- Exception to the rule
- Must have knowledge of the offer to accept it
40
Gibson v Manchester City Council (Issue Topic)
Invitation to treat
41
Gibson v Manchester City Council (Facts)
- Selling Council house
- Council "may" be prepared to sell the house
- Is it an offer?
Held:
-No
- Not capable of being accepted
42
Harris v Nickerson (Facts)
- Said there was an auction that was selling office furniture
- Did not actually sell the office furniture
Held:
- There was no offer
- Statement of Intention
43
Harvey v Facey (Issue Topic)
Supply of Information
44
Harvey v Facey (Facts)
-Told Pen is around £900
- H agreed to buy it
- F argued that it was not an offer, he was only stating that he was willing to sell at
Held:
-It was not an offer
- It was a Supply of Information
45
Partridge v Crittenden (Issue Topic)
Advertisement
| Invitation to treat
46
Pharmaceutical Society v Boots (Issue Topic)
Goods on Display
| Acceptance
47
Pharmaceutical Society v Boots (Facts)
- Self Service Shop
- when does acceptance take place?
Held:
- Offer is accepted when item is swiped and placed in bag
48
Storer v Manchester City Council (Issue Topic)
Offer & Acceptance
49
Storer v Manchester City Council (Facts)
- S wanted to buy a council house
- Signed the agreement and returned it to the council
- Gov't changed before the council signed it
- New gov't did not want to sign it
Held:
- S did everything he could to bind himself
- Gov't was bound to sell
50
Thornton v Shoe Lane Parking (Facts)
- Parking Facility
- Does the offer occur when ticket machine was ready for payment or when money goes in?
Held:
- Acceptance was made when money was inserted
51
Harris v Nickerson (Issue Topic)
Statement of Intention
52
Intention to Create Legal Relations?
- Agreements will not be enforced unless the parties intended to create contractual relations
53
Balfour v Balfour (1919) (facts)
- Came with wife to England
- He left, she stayed
- He gave her money to stay
- They got divorced
- Does he have to continue to pay her the £?
Held:
- No
- Agreements made while still spouses are generally not enforceable
- Family Members
54
Are Social/Domestic Arrangements Binding?
- Agreement entered into in domestic context
- Presumption is that the parties did not intend to create legal relations
- Generally, no
55
Jones v Padavattan (1969) (Principle)
- Agreements in domestic situations are typically non binding
56
Jones v Padavattan (1969) (facts)
- Mother to pay maintenance
- They fought
- J sued her own daughter
- Is there a binding contract?
Held:
- No
- Not sufficient evidence
57
Parker v Clark (1960) (Principle)
- Agreements entered into in domestic situations can be binding if the agreement is contractual in nature
58
Parker v Clark (1960) (Facts)
- P to live with C to take care of them
- Agreed to give house to P when die
- C changed will
- Was the agreement binding?
Held:
- Yes
- Agreement was contractual in nature
59
Intention and Reasonable Expectation
test?
- Test is objective
| - If reasonable person concludes that there is an intention to contract, than person making promise would be bound
60
Commercial Agreements? Binding?
- General assumption that there is an intention to create legal relations
61
Kleinwort Benson Ltd v Malaysia Mining Corp. Bhd (1989) (Facts)
- M subsidiary approached K for a loan
- K gave loan, wanted guarantee from M
- M said they won't guarantee, but it is part of their public policy to repay loans
- M wrote a letter of comfort (not an agreement)
- M took the loan
- M did not pay K back
Held:
- No legal effect
- Comfort letter is not a guarantee
62
Kleinwort Benson Ltd v Malaysia Mining Corp. Bhd (1989) (Issue Topic)
- Commercial Agreements
63
What is Certainty?
o In order to constitute a valid contract, the parties must express themselves that their meaning can be determined with a reasonable degree of certainty
* Must be reasonably clear
* They both meant the same thing
64
Cases regarding Certainty? (3)
May & Butvcher v R (1945)
Hillas v Arcos (1932)
Foley v Classique Coaches (1934
65
May & Butvcher v R (1945) Facts
* Was there a contract in the case?
* Price is important
* They said they would agree upon a price in the future
* Used tents
* Did R have to sell the excess of tents to P?
* Courts said no
* Price was too vague, so not really a contract
66
Hillas v Arcos (1932) Facts
* Contract for sale of timber
* Gave option to buy more timber in the following year
* Because it gave the quantity, it was a valid contract
* Is it reasonable to set a price/amount?
* What is reasonable given the circumstances
67
Foley v Classique Coaches (1934 Facts
* Supply of Petrol
* Price agreed by parties in writing and from time to time
* Binding without a specific price?
* Held: it was a binding agreement
* Why different from other case?
* Petrol price changes all the time. More flexible regarding price. Tents don’t change.
68
Ambiguity, vagueness, incompleteness cases? (4)
Scrammell v. Ouston (1941)
Nicolene v Simmonds (1953)
Winn v Bull Chancery Division (1877)
Raffles v Wichelhaus (1864)
69
Scrammell v. Ouston (1941) Facts
* D agreed to buy a van from P
* Place higher purchase terms
* Was there a contract based on higher purchase terms?
* Held: no, not specific enough
* If no certainty, then there is nothing for the court ot interpret.
70
Nicolene v Simmonds (1953) Facts
* One term at the end. Very vague and leacked meaning
* Argued that the quality of the product was poor
* P argued that they have a contract
* Held: removed problematic clause
* Severance of the problematic term in the contract
* Court wants to do the least intrusive thing in order for the contract to continue
71
Winn v Bull Chancery Division (1877) Facts
* Lease a dwelling house.
* If agreement is “subject to contract”, need a contract in order for the agreement to be enforceable
* Term sheet is not a contract
72
Raffles v Wichelhaus (1864) Facts
* Unusual
* P was supposed to sell cotton to D
* Supposed to arrive on a ship called the peerless
* There were more then one ship called this
* P was ready to sell, D didn’t want it anymore
* D said that he meant the peerless that arrived at a later date
* Should D be bound?
* Held: no binding contract unless the parties agree to the same thing
* Too ambiguous
73
Are Agreements to agree enforceable?
Generally, No
Walford v Miles (1992)
Petromec Inc. v Petroleo Brasileiro SA Petrobas (2005)
74
Walford v Miles (1992)
| Facts
* Sale of photo item
* P said that D said they wouldn’t go elsewhere
* D did go elsewhere
* Is this enforceable?
* Problem: cannot make a promise for an indefinite amount of time
* Limited in duration
* Not enforceable
75
Petromec Inc. v Petroleo Brasileiro SA Petrobas (2005) Facts
* Pruchase of oil production platform
* Anticipated that it need to be upgraded
* Discovered new oilfield
* Had to make changes to contract
* 4 parties
* 2 parties had agreement to negotiate in good faith regarding upgrade
* Is this enforceable? (Negotiate in good faith)
* Common law: do what you said you would in the contract
* It was an agreement to agree
* Can’t prove “lack of good faith”
* Loss was quantifiable
* Was termination made in good faith
* Judge: good faith is not justification to terminate a contract
* Agreement was enforceable
* If sophisticated parties, we make it difficult for them to get out of contracts that they get into
76
Modern Approach to Agreements to to agree? (case)
```
Bear Stearns Bank v Forum (2007)
• P owed D money
• D would sell titles to P
• Court: valid agreemen
• Pagnan v Feed Products (1987)
• Parties are masters to their own contractual state
• Should know consequences
```
77
Implied Terms case?
British Steel v Cleveland Bridge & Engineering
78
British Steel v Cleveland Bridge & Engineering Facts
• Letter of intent to supply with nodes
• Negotiated terms of contract
• No contract agreed originally
• Quantum Marowit?
• The amount the goods that we have provided to
• Made a contract claim, if not, thy provided goods which have a value
• D said no, they are not paying. Counter sued because of delay
• Question
• Type of contract?
o Executory contract: if do x, I will do Y
o Not applicable in this case
o No if
o Still in state of negotiations
o By deliverying nodes, does not enforce contract
• Held: D had obligation to pay P the value of nodes.
• D couldn’t claim damages because there was no contract
79
General rule of Performance?
2 cases
Once performance has begun, court will usually enforce the agreement
oFoley v Classique coaches
oSudbrook Trading Estate Ltd v Eggleton (1983)
80
5 Requirements to enter into a contract?
```
Offer
Acceptance
Intention
Certainty
Consideration (if not, promissory estoppel)
```
81
Butler Machine Tools case Facts
?
82
Butler Machine Tools case Principle
?
83
New Zealand Shipping Co case Facts
?
