Note: Substitute ‘Offeror’, ‘Claimant’ etc. for the names given in the fact pattern
OFFER & ACCEPTANCE
OFFER
A contractual agreement is an offer by one party accepted by the other. An offer is an ‘expression of
willingness to contract on certain terms’, binding ‘as soon as it is accepted by the person to whom it is
addressed’ (Treitel, The Law of Contract, 13th edn, p 8). This must be distinguished from an
invitation to treat, where there is no intention to be bound and thus no contract.
*Consider if any of the below are relevant and, if so, apply to the facts*
Scenario Legal Principle
Goods on display in Goods on display in supermarkets and self-service shops are generally
supermarkets regarded as invitations to treat and not offers (Pharmaceutical Society of
Great Britain v Boots Cash Chemists; Fisher v Bell). The customer
offers to buy the goods when the customer presents them at the payment
point, and acceptance takes place when the shop takes payment for the
goods. However, a display of goods may amount to an offer in very
limited circumstances where there is a clear intention to be bound (e.g. a
display of goods in a special sale). Here… apply to facts.
Advertisements Advertisements are generally regarded as invitations to treat, not offers
(Partridge v Crittenden). However, an advertisement of a reward may
amount to an offer of a unilateral contract, as only one party is making a
promise (i.e. to pay a reward) and there is an intention to be bound as
soon as the information is given/criteria are met (Williams v
Carwardine; Carlill v Carbolic Smoke Ball Company). Here… apply to
facts.
Auction An auctioneer’s request for bids is usually an invitation to treat; the bid
is an offer which the auctioneer may accept or reject (s.57(2) SGA
1979). However, if the auction is advertised ‘without reserve’, there is
an offer of a unilateral contract by the auctioneer (i.e. a promise to
accept the highest bid) which is accepted by the highest bidder. In this
instance, should the auctioneer refuse to accept the bid, the highest
bidder will have a claim in damages against the auctioneer (Barry v
Davies). Here… apply to facts.
Tenders Requests for tenders are generally considered invitations to treat; the
tenders will be the offers, which may or may not be accepted by the
business which has invited them. Putting the matter out to tender does
not imply any intention to accept any particular tender (Spencer v
Harding). However, an invitation for tenders may give rise to a
unilateral contract, and thus constitute an offer, under certain
circumstances. For example, if there is an offer to sell to the highest
bidder (Harvela Investments Ltd v Royal Trust Company of Canda Ltd)
, or to consider all tenders (Blackpool & Fylde Aero Club Ltd v Blackpool
Borough Council). Here… apply to facts.
Business quote When a business sends a quote, it is usually likely to be an offer, rather
than an invitation to treat. On the facts, Offeror made an offer by [letter,
email etc.] for £?.
TERMINATION OF OFFER
Counter Offer
A counter offer constitutes an implied rejection of the original offer and as such destroys it (Hyde v
Wrench). However, where there is simply a request for information, the original offer still stands and
can be accepts (Stevenson Jacques and Co v McLean). Here… apply to facts.
Withdrawal of Offer
As a general rule, an offer can be withdrawn any time before acceptance (Routledge v Grant),
provided the offeree has not given consideration for the promise to keep the offer open (Mountford v
Scott). Here… apply to facts. Revocation must be communicated to the offeree in order to be effective
(Byrne & Co v Van Tiernhoven & Co). It may be communicated by the offeror or a reliable third party
(Dickinson v Dodds).
*Consider if any of the below are relevant and, if so, apply to the facts*
Scenario Legal Principle
Offer made to the An offer made to the public at large may be revoked through the same
public at large channel as it was made, provided the revocation is given the same
prominence (Shuey v United States). Note: this is a US authority so not
binding, but reasonable to apply.
Partial performance of Partial performance of a unilateral contract is sufficient to prevent
a unilateral contract revocation by the offeror (Errington v Errington and Woods). In other
words, once the offeree has started to perform the act of acceptance, it is
likely that the offeror cannot revoke. Here… apply to facts.
Offeree has moved Notice of withdrawal sent to the offeree’s last known address is
address effective if they had moved without notifying the offeror (Treitel, The
Law of Contract, 13th edn, p.43). Here… apply to facts.
Offeree has chosen not A withdrawal which reaches the offeree may be effective if the offeree
to read the withdrawal simply chooses not to read it (Treitel, The Law of Contract, 13th edn,
p.43). Here… apply to facts.
Offeree is a business Notice will be effective on receipt where it is reasonable to expect a
member of staff to be available to read a notice of revocation (i.e.
during normal business hours – The Brimnes). Note: this depends on the
context/situation and reasonable expectation of the sender. If The
Brimnes rule does apply here… apply to facts.
,ACCEPTANCE
For an acceptance to be valid, there must be a complete acceptance of all the terms of the offer
without qualification or addition (Treitel, The Law of Contract, 13th edn, p 17). The general rule is
that acceptance must be communicated (Entores Ltd v Miles Far East Corp); this may be by either the
offeree or its duly authorised agent (Powell v Lee).
Note: the validity of the acceptance also depends on whether the offer still stands (e.g. if been revoked
and thus validity of revocation) so make sure to consider potential termination of the offer first!
*Consider if any of the below are relevant and, if so, apply to the facts*
Scenario Legal Principle
By Electronic By analogy with The Brimnes, an acceptance communicated electronically
Communication will be effective when it would be reasonable to expect the recipient to
have read it, even if it is not read until a later time. In such cases, it may
help to consider the intentions of the parties and sound business practice
(Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelgesellschaft GmbH).
Here… apply to facts.
By Post An exception to the general rule about communication is the postal rule.
According to the postal rule, a letter of acceptance is deemed effective
when posted and the contract will be formed at that point (Adams v
Lindsell), even if the letter is lost in the post (Household Fire and
Carriage Accident Insurance Co (Ltd)). The postal rule will apply
provided the following conditions are satisfied:
1) It was reasonable for the acceptance to be sent by post. Here…
apply to facts.
2) The letter was properly stamped, addressed and posted. Here…
apply to facts.
3) The rule has not been expressly or impliedly excluded by the
offeror. Here… apply to facts.
• E.g. ‘need to know’/tell me/stipulated deadline
• E.g. ‘notice in writing’ – Holwell Securities Ltd v Hughes
If the postal rule is excluded, a letter will not be an effective acceptance
unless and until it is received. If the postal rule does not apply, retraction
of an acceptance is clearly possible unless and until the acceptance is
actually communicated, because until that point there will not be a binding
contract (Entores v Miles Far East Corp).
On the facts, the postal rule does/does not apply because… and thus there
is [a valid/no] contract.
, CERTAINTY AND COMPLETENESS
In order for an agreement to be enforced by the courts, there must be no uncertainty as to what has
been agreed and no material terms left to be determined. This will be judged objectively and in
context, considering:
a) Whether the parties are in the same trade;
b) Trade usage;
c) Whether the agreement has been acted on for any length of time;
d) Whether there is an objective mechanism for resolving any uncertainty (e.g. arbitration
clause).
Here… apply to facts.
Conclude.
OFFER & ACCEPTANCE
OFFER
A contractual agreement is an offer by one party accepted by the other. An offer is an ‘expression of
willingness to contract on certain terms’, binding ‘as soon as it is accepted by the person to whom it is
addressed’ (Treitel, The Law of Contract, 13th edn, p 8). This must be distinguished from an
invitation to treat, where there is no intention to be bound and thus no contract.
*Consider if any of the below are relevant and, if so, apply to the facts*
Scenario Legal Principle
Goods on display in Goods on display in supermarkets and self-service shops are generally
supermarkets regarded as invitations to treat and not offers (Pharmaceutical Society of
Great Britain v Boots Cash Chemists; Fisher v Bell). The customer
offers to buy the goods when the customer presents them at the payment
point, and acceptance takes place when the shop takes payment for the
goods. However, a display of goods may amount to an offer in very
limited circumstances where there is a clear intention to be bound (e.g. a
display of goods in a special sale). Here… apply to facts.
Advertisements Advertisements are generally regarded as invitations to treat, not offers
(Partridge v Crittenden). However, an advertisement of a reward may
amount to an offer of a unilateral contract, as only one party is making a
promise (i.e. to pay a reward) and there is an intention to be bound as
soon as the information is given/criteria are met (Williams v
Carwardine; Carlill v Carbolic Smoke Ball Company). Here… apply to
facts.
Auction An auctioneer’s request for bids is usually an invitation to treat; the bid
is an offer which the auctioneer may accept or reject (s.57(2) SGA
1979). However, if the auction is advertised ‘without reserve’, there is
an offer of a unilateral contract by the auctioneer (i.e. a promise to
accept the highest bid) which is accepted by the highest bidder. In this
instance, should the auctioneer refuse to accept the bid, the highest
bidder will have a claim in damages against the auctioneer (Barry v
Davies). Here… apply to facts.
Tenders Requests for tenders are generally considered invitations to treat; the
tenders will be the offers, which may or may not be accepted by the
business which has invited them. Putting the matter out to tender does
not imply any intention to accept any particular tender (Spencer v
Harding). However, an invitation for tenders may give rise to a
unilateral contract, and thus constitute an offer, under certain
circumstances. For example, if there is an offer to sell to the highest
bidder (Harvela Investments Ltd v Royal Trust Company of Canda Ltd)
, or to consider all tenders (Blackpool & Fylde Aero Club Ltd v Blackpool
Borough Council). Here… apply to facts.
Business quote When a business sends a quote, it is usually likely to be an offer, rather
than an invitation to treat. On the facts, Offeror made an offer by [letter,
email etc.] for £?.
TERMINATION OF OFFER
Counter Offer
A counter offer constitutes an implied rejection of the original offer and as such destroys it (Hyde v
Wrench). However, where there is simply a request for information, the original offer still stands and
can be accepts (Stevenson Jacques and Co v McLean). Here… apply to facts.
Withdrawal of Offer
As a general rule, an offer can be withdrawn any time before acceptance (Routledge v Grant),
provided the offeree has not given consideration for the promise to keep the offer open (Mountford v
Scott). Here… apply to facts. Revocation must be communicated to the offeree in order to be effective
(Byrne & Co v Van Tiernhoven & Co). It may be communicated by the offeror or a reliable third party
(Dickinson v Dodds).
*Consider if any of the below are relevant and, if so, apply to the facts*
Scenario Legal Principle
Offer made to the An offer made to the public at large may be revoked through the same
public at large channel as it was made, provided the revocation is given the same
prominence (Shuey v United States). Note: this is a US authority so not
binding, but reasonable to apply.
Partial performance of Partial performance of a unilateral contract is sufficient to prevent
a unilateral contract revocation by the offeror (Errington v Errington and Woods). In other
words, once the offeree has started to perform the act of acceptance, it is
likely that the offeror cannot revoke. Here… apply to facts.
Offeree has moved Notice of withdrawal sent to the offeree’s last known address is
address effective if they had moved without notifying the offeror (Treitel, The
Law of Contract, 13th edn, p.43). Here… apply to facts.
Offeree has chosen not A withdrawal which reaches the offeree may be effective if the offeree
to read the withdrawal simply chooses not to read it (Treitel, The Law of Contract, 13th edn,
p.43). Here… apply to facts.
Offeree is a business Notice will be effective on receipt where it is reasonable to expect a
member of staff to be available to read a notice of revocation (i.e.
during normal business hours – The Brimnes). Note: this depends on the
context/situation and reasonable expectation of the sender. If The
Brimnes rule does apply here… apply to facts.
,ACCEPTANCE
For an acceptance to be valid, there must be a complete acceptance of all the terms of the offer
without qualification or addition (Treitel, The Law of Contract, 13th edn, p 17). The general rule is
that acceptance must be communicated (Entores Ltd v Miles Far East Corp); this may be by either the
offeree or its duly authorised agent (Powell v Lee).
Note: the validity of the acceptance also depends on whether the offer still stands (e.g. if been revoked
and thus validity of revocation) so make sure to consider potential termination of the offer first!
*Consider if any of the below are relevant and, if so, apply to the facts*
Scenario Legal Principle
By Electronic By analogy with The Brimnes, an acceptance communicated electronically
Communication will be effective when it would be reasonable to expect the recipient to
have read it, even if it is not read until a later time. In such cases, it may
help to consider the intentions of the parties and sound business practice
(Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelgesellschaft GmbH).
Here… apply to facts.
By Post An exception to the general rule about communication is the postal rule.
According to the postal rule, a letter of acceptance is deemed effective
when posted and the contract will be formed at that point (Adams v
Lindsell), even if the letter is lost in the post (Household Fire and
Carriage Accident Insurance Co (Ltd)). The postal rule will apply
provided the following conditions are satisfied:
1) It was reasonable for the acceptance to be sent by post. Here…
apply to facts.
2) The letter was properly stamped, addressed and posted. Here…
apply to facts.
3) The rule has not been expressly or impliedly excluded by the
offeror. Here… apply to facts.
• E.g. ‘need to know’/tell me/stipulated deadline
• E.g. ‘notice in writing’ – Holwell Securities Ltd v Hughes
If the postal rule is excluded, a letter will not be an effective acceptance
unless and until it is received. If the postal rule does not apply, retraction
of an acceptance is clearly possible unless and until the acceptance is
actually communicated, because until that point there will not be a binding
contract (Entores v Miles Far East Corp).
On the facts, the postal rule does/does not apply because… and thus there
is [a valid/no] contract.
, CERTAINTY AND COMPLETENESS
In order for an agreement to be enforced by the courts, there must be no uncertainty as to what has
been agreed and no material terms left to be determined. This will be judged objectively and in
context, considering:
a) Whether the parties are in the same trade;
b) Trade usage;
c) Whether the agreement has been acted on for any length of time;
d) Whether there is an objective mechanism for resolving any uncertainty (e.g. arbitration
clause).
Here… apply to facts.
Conclude.
