Offer and Acceptance
The concept of an offer
What is an offer?
“An expression of willingness to contract on specified terms made with the intention
(actual or apparent) that it is to become binding as soon as it is accepted by the person
to whom it is addressed”
Terminology: offeror (person making the offer) and offeree (person to whom an offer is
being made)
Invitations to treat
● An invitation to treat is where one party invites another to make an offer
● Often seen in the context of advertisements or shop displays
● Usually these are considered NOT to be offers
● However there are some situations on which the courts have considered them to
be so clear and unambiguous that they have been held to be binding
E.g Partridge v. Crittenden (1968) 1 WRL 1204
Grainger v. Gough (1896) AC 325
Lefkowitz v. Great Minneapolis Surplus Store 86 NW689 (Minn. 1957)
Carlill v. Carbolic Smoke Ball Co (1893) 1 QB 256
● Created considerable uncertainty in offer/ acceptance situations Fisher V. Bell
(1961) 1 QB 394
Revocation of an offer (withdrawing an offer)
● An offer can be revoked at anytime before it’s accepted
● Offord v. Davies (1862) 12 Common Bench NS 748
❏ Promise made to guarantee payments for 12 months was subsequently
withdrawn
● A revocation must be communicated in order to be effective
● Revocation can be communicated by a third party
● Dickinson v. Dodds (1876) 2 ch 463
❏ Dodds offered to sell property to Dickinson on Wednesday, offer open until
Friday
❏ On Thu Mr. Berry told Dickinson the houses had been sold
❏ Fri morning - Dickinson finds Dodds and tries to accept the offer
❏ Conclusion: no binding contract since Mr. Berry communicated with
Dickinson and told him the houses were sold
, ● Byrne & Co. v Van Tienhoven & Co. (1879-80) LR 5 CPD 344
❏ Held: revocation of offer ineffective
❏ a person who accepted the offer not knowing it has been revoked, should
safely be in a position to act upon the offer and acceptance constitute a
binding contract on both parties
● Shuey v. United States (1874) 92 U.S. 73
Acceptance and counter- offers
● Acceptance: “A final and unqualified expression of assent to the terms of the
offer” - Chitty on contracts
Counter-offers
● If new terms are added to an offer, or if existing terms are changed- this is a
counter offer
● A counter offer destroys the original offer
● Haggling over the price= a series of counter offers that destroy the previous offer
Hyde v Wrench (1840) 3 Beav 334
❏ Farm for sale, W offers to sell to H for £1000
❏ H replies with offer to buy £950, W rejects offer of £950
❏ H purports to revert to original offer to sell at £1000
Requests for information
● Seeking clarification of the terms of an offer and not trying to alter the existing
deal is not a counter-offer
● Stevenson, Jaques & Co. v McLean (1879-80) LR 5 QBD 346
❏ M wrote to S,J & Co offering iron for sale at 40s. Per ton cash
❏ S,J & Co telegraphed to the defendant: “please wire whether you would
accept forty for delivery over two months, or if not, longest limit you could
give”
❏ Not viewed as counter-offer
❏ Framed as inquiry, not framed as a rejection and counter-offer
● Harvey v. Facey (1893) AC 552
❏ Privy council decision from Jamaica
❏ F selling a large property in Kingston, with initial interest from local
government
❏ H sought to hijack the sale and telegrammed asking for the lowest cash
price that might be accepted
❏ F replied, H declared that he would buy at this price
The concept of an offer
What is an offer?
“An expression of willingness to contract on specified terms made with the intention
(actual or apparent) that it is to become binding as soon as it is accepted by the person
to whom it is addressed”
Terminology: offeror (person making the offer) and offeree (person to whom an offer is
being made)
Invitations to treat
● An invitation to treat is where one party invites another to make an offer
● Often seen in the context of advertisements or shop displays
● Usually these are considered NOT to be offers
● However there are some situations on which the courts have considered them to
be so clear and unambiguous that they have been held to be binding
E.g Partridge v. Crittenden (1968) 1 WRL 1204
Grainger v. Gough (1896) AC 325
Lefkowitz v. Great Minneapolis Surplus Store 86 NW689 (Minn. 1957)
Carlill v. Carbolic Smoke Ball Co (1893) 1 QB 256
● Created considerable uncertainty in offer/ acceptance situations Fisher V. Bell
(1961) 1 QB 394
Revocation of an offer (withdrawing an offer)
● An offer can be revoked at anytime before it’s accepted
● Offord v. Davies (1862) 12 Common Bench NS 748
❏ Promise made to guarantee payments for 12 months was subsequently
withdrawn
● A revocation must be communicated in order to be effective
● Revocation can be communicated by a third party
● Dickinson v. Dodds (1876) 2 ch 463
❏ Dodds offered to sell property to Dickinson on Wednesday, offer open until
Friday
❏ On Thu Mr. Berry told Dickinson the houses had been sold
❏ Fri morning - Dickinson finds Dodds and tries to accept the offer
❏ Conclusion: no binding contract since Mr. Berry communicated with
Dickinson and told him the houses were sold
, ● Byrne & Co. v Van Tienhoven & Co. (1879-80) LR 5 CPD 344
❏ Held: revocation of offer ineffective
❏ a person who accepted the offer not knowing it has been revoked, should
safely be in a position to act upon the offer and acceptance constitute a
binding contract on both parties
● Shuey v. United States (1874) 92 U.S. 73
Acceptance and counter- offers
● Acceptance: “A final and unqualified expression of assent to the terms of the
offer” - Chitty on contracts
Counter-offers
● If new terms are added to an offer, or if existing terms are changed- this is a
counter offer
● A counter offer destroys the original offer
● Haggling over the price= a series of counter offers that destroy the previous offer
Hyde v Wrench (1840) 3 Beav 334
❏ Farm for sale, W offers to sell to H for £1000
❏ H replies with offer to buy £950, W rejects offer of £950
❏ H purports to revert to original offer to sell at £1000
Requests for information
● Seeking clarification of the terms of an offer and not trying to alter the existing
deal is not a counter-offer
● Stevenson, Jaques & Co. v McLean (1879-80) LR 5 QBD 346
❏ M wrote to S,J & Co offering iron for sale at 40s. Per ton cash
❏ S,J & Co telegraphed to the defendant: “please wire whether you would
accept forty for delivery over two months, or if not, longest limit you could
give”
❏ Not viewed as counter-offer
❏ Framed as inquiry, not framed as a rejection and counter-offer
● Harvey v. Facey (1893) AC 552
❏ Privy council decision from Jamaica
❏ F selling a large property in Kingston, with initial interest from local
government
❏ H sought to hijack the sale and telegrammed asking for the lowest cash
price that might be accepted
❏ F replied, H declared that he would buy at this price
