Offer And Acceptance

Question 1

What is a contract?

Answer 1

A contract is a legally binding agreement between two or more parties.

Question 2

What are the four essential elements of a contract?

Answer 2

1. An offer, which must be accepted; 2. Both parties must provide consideration; 3. There must be an intention to create legal relations.

Question 3

How does a question identifying an offer typically start?

Answer 3

The question will start in 1 of 3 ways: Offer, Invitation to Treat (ITT), Request for Information & Reply.

Question 4

What is the definition of an offer?

Answer 4

An offer is the terms by which the offeror is prepared to be bound. It must be certain and communicated.

Gibson v MCC.

Question 5

What is an invitation to treat?

Answer 5

An invitation to treat is NOT an offer. It simply invites the other person to make an offer, which can then be accepted or rejected.

Question 6

What are the three types of invitation to treat?

Answer 6

1. Adverts; 2. Items on Display; 3. Auctions.

Question 7

When can adverts be considered an offer?

Answer 7

Adverts will be an offer if the advert is made to a specific group of people, or if the advert is for a unilateral contract.

Partridge v Crittenden.

Question 8

What is the legal status of items on display in a shop?

Answer 8

Items on display in a shop are an invitation to treat, not an offer.

Fisher v Bell.

Question 9

What is the definition of a request for information?

Answer 9

A request for information, and a reply is NOT an offer.

Harvey v Facey.

Question 11

What is a counter-offer?

Answer 11

A counter-offer rejects and ends the original offer and creates a new offer. It must be communicated.

Hyde v Wrench.

Question 12

Can an offer be revoked?

Answer 12

An offer can be revoked at any time before it is accepted and must be communicated to the offeree, even by a third party.

Dickinson v Dodds.

Question 13

What is required for a rejection of an offer?

Answer 13

A rejection must be a clear rejection and must be communicated.

Stevenson v McClean.

Question 14

What is the effect of lapse of time on an offer?

Answer 14

If the offer has a time limit and it runs out, or after a reasonable time, the offer lapses.

Ramsgate Victoria Hotel.

Question 15

What happens if the offeror dies?

Answer 15

The offer can still be accepted until the offeree knows about the death.

Question 16

What is acceptance in contract law?

Answer 16

Acceptance is an agreement to all the terms of an offer and is valid as soon as it is communicated.

Question 17

Can acceptance be silent?

Answer 17

Acceptance can be in any form except silence.

Felthouse v Bindley.

Question 18

What must acceptance involve?

Answer 18

Acceptance must involve positive conduct.

Carlill v Carbolic Smoke Ball.

Question 19

What is the postal rule regarding acceptance?

Answer 19

A letter of acceptance takes effect at the moment of posting.

Question 20

When does the postal rule apply?

Answer 20

The postal rule applies only if post is the usual/expected method of communication, the letter is correctly stamped and addressed, and the claimant can prove the letter was posted.

Question 21

How can one avoid the postal rule?

Answer 21

By making it a term that acceptance only takes effect when communicated.

Question 22

What is the effect of electronic communication on acceptance?

Answer 22

Acceptance by fax, email, or text takes effect when received, not when sent.

Entores v Miles Far East.

Question 23

What happens if acceptance is received outside business hours?

Answer 23

It counts at the start of the next working day.