Offer
Must be certain ( Gunthing v Lynn )
Must still exist when accepted
Must be distinguished from invitations
A response to a request for information is not an offer ( Harvey v Facey )
A request for information is not a counter offer ( Stevenson v McLean )
Revocation must actually be communicated to the offeree ( Byrne v Van
Tienhoven )
May be made to the world at large ( R v Clark, Williams v Carwardine, Carlill v
Carbolic )
Invitation to treat
An invitation to negotiate (make a deal)
Response cannot result in a binding contract
Advertisement is an offer - a person who accepts the offer makes a contract with
the person who advertised.
Advertisement is only an invitation to treat - it cannot be accepted in such a way
that a contract is thereby formed.
Case: Partridge v Crittenden (1968)
The defendant advertised wild birds in a magazine. A customer posted a cheque and
bought the bird.
Outcome: the defendant was not guilty because the advertisement was an invitation to
treat and not an offer, therefore no contract has been made.
- If the advertisement had been an offer, then the defendant (supplier) would have had to
supply a bird to everyone who wrote in accepting the offer.
- The defendant had only a limited supply of birds and so could not have intended that
any number of customers would be supplied with one.
Unilateral contract
Unilateral contract – only one promise is made. The party making the offer promises
that if the offeree performs some specified act, then the offeror promises to do
something in return, thereby creating a contract. (sometimes called ‘if’ contracts).
Bilateral (two-sided) contract – both parties make a promise to the other (exchange
of promises).
Case: Carlill v The Carbolic Smoke Ball Co
Acceptance
, Acceptance cannot vary the original offer. That would be a counter-offer
( Northland Airlines v Dennis Ferranti Meters )
The offer must still be ‘open’ at the time of acceptance ( Hyde v Wrench )
Acceptance must be communicated to the offeror, but offeror may waive the
right of communication ( Carlill v Carbolic )
It may be communicated by a reliable third party ( Powell v Lee )
Silence cannot be acceptance ( Felthouse v Bindley )
- An acceptance of an offer of a bilateral contract is only effective when it is
received.
- A person cannot accept a contract by saying nothing and doing nothing
even if the offeror has specified it that way.
Case: Felthouse v Bindley (1862)
Claimant wanted to buy a horse from his nephew and in his letter, he stated that if the
claimant does not hear back, the horse is his. The auctioneer sold the horse by mistake.
Outcome: the auctioneer was not liable as the horse was nephews property and not the
claimants.
Acceptance may be by conduct ( Brogden v Metropolitan Railways )
Postal rule applies ( Household Fire Insurance Co v Grant )
Acceptance must be made within a reasonable time ( Ramsgate Victoria Hotel v
Montefiori )
The postal rule
Termination of offers
, A created contract might cease to exist in various ways. Once an offer has ceased to exist
it can no longer be accepted.
Revocation
- Called off by the offeror.
- Once revoked, can no longer be accepted.
- Effective when it is received rather than when it was sent.
- Acceptance before revocation – contract
- Revocation before acceptance – no contract
- An offer of a unilateral contract can be revoked before the offeree has begun to
accept it
- If the offer was made to the whole world as an advertisement, it can be revoked in
two ways
(i) By direct communication with an offeree
(ii) By another advertisement likely to reach the same audience as the
advertisement which made the original offer
- It is impossible to revoke the offer of a unilateral contract once the offeree has begun
to perform the act which was requested as acceptance.
Errington v Errington
Refusal
- If an offeree refuses an offer, then the offer is terminated and cannot be later
accepted.
- A request for more information does not imply a rejection of the offer.
Hyde v Wrench
Lapse of time
- If there is a time limit on an offer, the offer will end when the time limit expires.
- Offer available only for a reasonable amount of time.
Dickinson v Dodds
Battle of the forms
- Both the seller and buyer insist that a contract is made upon their own particular
standard terms.
Butler v Ex-Cell-O Corp (1979)
Intention to create legal relations
Must be certain ( Gunthing v Lynn )
Must still exist when accepted
Must be distinguished from invitations
A response to a request for information is not an offer ( Harvey v Facey )
A request for information is not a counter offer ( Stevenson v McLean )
Revocation must actually be communicated to the offeree ( Byrne v Van
Tienhoven )
May be made to the world at large ( R v Clark, Williams v Carwardine, Carlill v
Carbolic )
Invitation to treat
An invitation to negotiate (make a deal)
Response cannot result in a binding contract
Advertisement is an offer - a person who accepts the offer makes a contract with
the person who advertised.
Advertisement is only an invitation to treat - it cannot be accepted in such a way
that a contract is thereby formed.
Case: Partridge v Crittenden (1968)
The defendant advertised wild birds in a magazine. A customer posted a cheque and
bought the bird.
Outcome: the defendant was not guilty because the advertisement was an invitation to
treat and not an offer, therefore no contract has been made.
- If the advertisement had been an offer, then the defendant (supplier) would have had to
supply a bird to everyone who wrote in accepting the offer.
- The defendant had only a limited supply of birds and so could not have intended that
any number of customers would be supplied with one.
Unilateral contract
Unilateral contract – only one promise is made. The party making the offer promises
that if the offeree performs some specified act, then the offeror promises to do
something in return, thereby creating a contract. (sometimes called ‘if’ contracts).
Bilateral (two-sided) contract – both parties make a promise to the other (exchange
of promises).
Case: Carlill v The Carbolic Smoke Ball Co
Acceptance
, Acceptance cannot vary the original offer. That would be a counter-offer
( Northland Airlines v Dennis Ferranti Meters )
The offer must still be ‘open’ at the time of acceptance ( Hyde v Wrench )
Acceptance must be communicated to the offeror, but offeror may waive the
right of communication ( Carlill v Carbolic )
It may be communicated by a reliable third party ( Powell v Lee )
Silence cannot be acceptance ( Felthouse v Bindley )
- An acceptance of an offer of a bilateral contract is only effective when it is
received.
- A person cannot accept a contract by saying nothing and doing nothing
even if the offeror has specified it that way.
Case: Felthouse v Bindley (1862)
Claimant wanted to buy a horse from his nephew and in his letter, he stated that if the
claimant does not hear back, the horse is his. The auctioneer sold the horse by mistake.
Outcome: the auctioneer was not liable as the horse was nephews property and not the
claimants.
Acceptance may be by conduct ( Brogden v Metropolitan Railways )
Postal rule applies ( Household Fire Insurance Co v Grant )
Acceptance must be made within a reasonable time ( Ramsgate Victoria Hotel v
Montefiori )
The postal rule
Termination of offers
, A created contract might cease to exist in various ways. Once an offer has ceased to exist
it can no longer be accepted.
Revocation
- Called off by the offeror.
- Once revoked, can no longer be accepted.
- Effective when it is received rather than when it was sent.
- Acceptance before revocation – contract
- Revocation before acceptance – no contract
- An offer of a unilateral contract can be revoked before the offeree has begun to
accept it
- If the offer was made to the whole world as an advertisement, it can be revoked in
two ways
(i) By direct communication with an offeree
(ii) By another advertisement likely to reach the same audience as the
advertisement which made the original offer
- It is impossible to revoke the offer of a unilateral contract once the offeree has begun
to perform the act which was requested as acceptance.
Errington v Errington
Refusal
- If an offeree refuses an offer, then the offer is terminated and cannot be later
accepted.
- A request for more information does not imply a rejection of the offer.
Hyde v Wrench
Lapse of time
- If there is a time limit on an offer, the offer will end when the time limit expires.
- Offer available only for a reasonable amount of time.
Dickinson v Dodds
Battle of the forms
- Both the seller and buyer insist that a contract is made upon their own particular
standard terms.
Butler v Ex-Cell-O Corp (1979)
Intention to create legal relations
