Agreement: Offer and Acceptance
Contract elements:
For a contract to be valid in British law it must have these elements:
- Agreement (offer and acceptance)
- Intention
- Consideration/ Estoppel
- Certainty of terms
If any of these elements are not present then there is no contract and neither parties can go
to court to try to enforce “a breach of contract”
What is agreement:
An agreement is reached when one party makes an offer, which is accepted by another
party. In deciding whether the parties have reached an agreement, the courts will apply an
objective test (How the exchange/ contract appears from both parties NOT intention)
Preliminary distinction:
Differences between two types of contracts:
Bilateral contract Unilateral contract
Promise for promise Promise for action
It is much more common It is not common
Eg: Promising to pay for an item Eg: Promise of a reward for a lost pet
Promising to give an item A promise (payment) would be given
for the action of finding the pet
Williams V Carwardine
How to demonstrate agreement:
There are two approaches that are used to analyze whether there is an agreement
Offer and acceptance Global approach
Most courts follow A few judges follow
Defintion of Offer: The idea is to see if "objectively" the courts
- It is an expression of willingness to should hold there to be a contract, without
be bound by certain terms without looking too closely into all the details of offer
further negotiation and acceptance - "in all the circumstances".
- An effect of making an offer is that it Gibson v Manchester City Council
grants the power to create a contract
by accepting the offer to the offeree
- The objective test is applied
, Agreement: Offer and Acceptance
EXAM TIP:If you are asked to do an agreement analysis, you should do the confidential analysis first, separate
offer and acceptance, and then briefly note the fact that there is another approach, the global approach
Giberson V Manchester city council:
Lord Diplock followed the offer and acceptance approach;
- He stated that the documents did not state a contractual offer by the corporation to sell the
house and an acceptance of the offer by Mr Gibson.
Lord Denny followed the global approach (Holistic view);
- He stated it is a “mistake to think that all contracts can be analyzed in the form of offer and
acceptance”
- Instead one should look at the correspondence (the letters exchanged) as a whole and see
whether the parties have come to an agreement
Offer v Invitation to treat:
Invitation to treat:
It is an attempt to induce negotiations or to induce an offer, it is not an offer
Pharmaceutical Society of GB v Boots cash chemists
Possible analysis: these are scenarios in which an agreement could occur within the case:
- Display on shelf =Offer
Customer puts in basket = acceptance (Rejected)
- Display on the shelf = Invitation to treat
Customer takes it to cash register = Offer
Salesperson rings up sale = acceptance (Accepted)
- Display on the shelf = Offer
Customer takes to cash register = acceptance (Ignored)
- Display product on the shelf = invitation to treat
Customer takes to cash register = invitation to treat (Ignored)
Salesperson rings up sale = offer ‘
Customer pays = acceptance
Exemptions for Invitation to treat
- An advertisement for the sale of goods could be seen as an offer if it is written on the
advertisement that if one wants to buy something from them, he can do it. Moreover,
it should be written that there is an endless amount of stock to be seen as an offer
(IMPOSSIBLE).
- Where the advertisement is unilateral, “reward” contract. If a reward is advertised for
the performance of a specified act, such as supplying information, that advertisement
will constitute a unilateral offer, assuming that the language is sufficiently definite to
be viewed as such. (Carlill v Carbolic Smoke Ball Co.).
Contract elements:
For a contract to be valid in British law it must have these elements:
- Agreement (offer and acceptance)
- Intention
- Consideration/ Estoppel
- Certainty of terms
If any of these elements are not present then there is no contract and neither parties can go
to court to try to enforce “a breach of contract”
What is agreement:
An agreement is reached when one party makes an offer, which is accepted by another
party. In deciding whether the parties have reached an agreement, the courts will apply an
objective test (How the exchange/ contract appears from both parties NOT intention)
Preliminary distinction:
Differences between two types of contracts:
Bilateral contract Unilateral contract
Promise for promise Promise for action
It is much more common It is not common
Eg: Promising to pay for an item Eg: Promise of a reward for a lost pet
Promising to give an item A promise (payment) would be given
for the action of finding the pet
Williams V Carwardine
How to demonstrate agreement:
There are two approaches that are used to analyze whether there is an agreement
Offer and acceptance Global approach
Most courts follow A few judges follow
Defintion of Offer: The idea is to see if "objectively" the courts
- It is an expression of willingness to should hold there to be a contract, without
be bound by certain terms without looking too closely into all the details of offer
further negotiation and acceptance - "in all the circumstances".
- An effect of making an offer is that it Gibson v Manchester City Council
grants the power to create a contract
by accepting the offer to the offeree
- The objective test is applied
, Agreement: Offer and Acceptance
EXAM TIP:If you are asked to do an agreement analysis, you should do the confidential analysis first, separate
offer and acceptance, and then briefly note the fact that there is another approach, the global approach
Giberson V Manchester city council:
Lord Diplock followed the offer and acceptance approach;
- He stated that the documents did not state a contractual offer by the corporation to sell the
house and an acceptance of the offer by Mr Gibson.
Lord Denny followed the global approach (Holistic view);
- He stated it is a “mistake to think that all contracts can be analyzed in the form of offer and
acceptance”
- Instead one should look at the correspondence (the letters exchanged) as a whole and see
whether the parties have come to an agreement
Offer v Invitation to treat:
Invitation to treat:
It is an attempt to induce negotiations or to induce an offer, it is not an offer
Pharmaceutical Society of GB v Boots cash chemists
Possible analysis: these are scenarios in which an agreement could occur within the case:
- Display on shelf =Offer
Customer puts in basket = acceptance (Rejected)
- Display on the shelf = Invitation to treat
Customer takes it to cash register = Offer
Salesperson rings up sale = acceptance (Accepted)
- Display on the shelf = Offer
Customer takes to cash register = acceptance (Ignored)
- Display product on the shelf = invitation to treat
Customer takes to cash register = invitation to treat (Ignored)
Salesperson rings up sale = offer ‘
Customer pays = acceptance
Exemptions for Invitation to treat
- An advertisement for the sale of goods could be seen as an offer if it is written on the
advertisement that if one wants to buy something from them, he can do it. Moreover,
it should be written that there is an endless amount of stock to be seen as an offer
(IMPOSSIBLE).
- Where the advertisement is unilateral, “reward” contract. If a reward is advertised for
the performance of a specified act, such as supplying information, that advertisement
will constitute a unilateral offer, assuming that the language is sufficiently definite to
be viewed as such. (Carlill v Carbolic Smoke Ball Co.).
