UNIT 1: OFFER AND ACCEPTANCE
🔹 AGREEMENT (OFFER & ACCEPTANCE)
Definition of Offer: Expression of willingness to contract on certain terms with the
intention that it shall become binding as soon as it is accepted by the person to whom
it is addressed (Treitel).
Objective Test: Agreement judged by external conduct (Smith v Hughes).
Subjective Element: Offeree must believe offeror intended to make the offer (The
Leonidas).
🔹 OFFER OR INVITATION TO TREAT?
Shop Displays:
Usually invitation to treat (Pharmaceutical Society v Boots; Fisher v Bell).
Customer offers at checkout; acceptance = payment.
Exception: clear intent to be bound (e.g. sale displays in special sale).
Petrol Pump / Car Park / Website:
Pump/machine is the offer; use = acceptance.
Display of goods on websites = invitation to treat.
Advertisements:
General rule: Invitation to treat (Partridge v Crittenden).
Exception: Advertisement of reward- unilateral offer (Carlill v Carbolic Smoke
Ball).
o Waives need for communicated acceptance.
o Seriousness shown by £1,000 deposit = binding offer.
Rewards: Treated as offers (Williams v Carwardine).
🔹 UNILATERAL VS BILATERAL CONTRACTS
Unilateral: Promise for act (e.g., reward).
Bilateral: Promise for promise.
Auctions:
Bids = offers; hammer fall = acceptance (S.57(2) SGA 1979).
Bids can be withdrawn at any time before acceptance
Auctioneer acts for seller- bilateral contract between owner and bidder
Reserve price: Min. accepted price (S.57(3)).
Without Reserve: Highest bid must be accepted = unilateral offer (Barry v
Davies)
o If auctioneer refuses- claim in damages against auctioneer (Barry v
Davies)
Tenders:
Invitation to treat, unless commitment to accept highest (Harvela).
Reasonable expectation = obligation to consider (Blackpool & Fylde)
o Damages for loss of opportunity
🔹 TERMINATION OF OFFER
Ways to Terminate: Revocation, Rejection, Lapse of Time.
Revocation Rules:
Can revoke anytime before acceptance
o A promise to keep an offer open is not binding if they are gratuitous
promise (no consideration) (Routledge v Grant)
o If consideration is given, offer irrevocable (Mountford v Scott).
Must be communicated to the offeree(Byrne v Van Tienhoven).
o Third-party revocation OK if reliable (Dickinson v Dodds)
o Last known address valid if they moved without notification
o Withdrawal valid if offeree chooses not to read it (Trietel)
, Business hours notice = valid even if unread (The Brimnes).
Public offers revoked by sufficiently prominent notice in relevant newspapers
(Shuey v US).
Unilateral Contracts:
General view- acceptance only occurs when performance is complete
No revocation after performance begins (Errington v Errington).
Starting act = implied promise not to revoke.
Acceptance and consideration= commencement of the act
3.2 Rejection by the Offeree
An offeree may reject an offer expressly or impliedly.
A counter-offer is an implied rejection – Hyde v Wrench.
A mere request for information does not reject the offer – Stevenson Jacques
v McLean.
3.3 Lapse of Time
If the offer specifies a time limit, acceptance outside this period is invalid.
Otherwise, the offer lapses after a reasonable time (depends on context).
o E.g. Offers for perishable goods lapse quickly.
4. Acceptance
Acceptance must be complete and unqualified – it must mirror the offer.
Acceptance is judged objectively – would a reasonable person view it as
agreement?
💡 Example:
"Can I pay by credit card?" →
o Could be a simple query → acceptance valid.
o Could be a conditional offer → counter-offer → Hyde v Wrench.
4.1 Knowledge of the Offer
Offeree must know of the offer at the time of acceptance – R v Clarke.
Mixed motives don’t matter if the offeree knows of the offer – Williams v
Carwardine.
💡 Examples:
(a) Returns dog without seeing poster → no contract.
(b) Saw poster but forgot → no contract.
(c) Saw poster, returned dog partly for reward → valid acceptance.
Battle of the Forms
When parties exchange contracts on standard terms, issue = which terms
apply.
Butler Machine Tool v Ex-Cell-O →
o Last set of terms accepted by conduct wins ("last shot" rule).
Brogden v Metropolitan Railway → acceptance can be by conduct.
4.1 Certainty in Offer & Acceptance
Offer must be sufficiently certain.
Vague terms (e.g. “hire purchase terms”) → too uncertain – Scammell v
Ouston.
Implied agreement to reasonable price → can still be a valid contract.
Mechanism for deciding unclear terms (e.g. “market price”) → may be valid.
Formal contract not required if there's clear agreement – intention matters.
Trade custom / previous dealings can help determine if there’s a binding
contract – Hillas v Arcos.
,4.2 Communication of Acceptance
Must be communicated by offeree or agent – Entores v Miles Far East
Corp; Powell v Lee.
Offeror may waive need for communication – Carlill v Carbolic Smoke Ball.
Silence ≠ acceptance – Felthouse v Bindley.
4.3 Acceptance by Post
🟢 Postal Rule – Adams v Lindsell:
Acceptance complete on posting, and contract formed even if never received
– Household Fire v Grant.
🔴 Limitations – Postal rule only applies if:
a. It’s an acceptance,
b. Post is a reasonable method,
c. Letter is properly addressed & stamped,
d. Offeror hasn't excluded the rule.
Holwell Securities v Hughes: “Notice in writing” = postal rule excluded.
📮 Retraction of Postal Acceptance
No clear English authority; arguments for both sides exist.
o For: Protects acceptor if offeror unaware.
o Against: Gives acceptor too much power – unfair.
4.4 Acceptance by Electronic Communication
Entores v Miles Far East Corp:
o Where acceptance is instantaneous (e.g. email, fax), it must
be received to be effective.
o A telexed acceptance will be effective when it would be reasonable to
expect the recipient to have read it (e.g. during normal office hours)
No universal rule to determine when communication takes place- look at
intention, business practices and risk (Brinkibon Ltd v Stahahag Stahl)
📘 5. Intention to Create Legal Relations
💡 General Rule:
Domestic/social agreements – Presumption of no intention to create legal
relations.
Commercial agreements – Presumption of intention to be legally binding.
🏠 5.1 Domestic & Social Agreements
Presumption: No intention (💼 Balfour v Balfour).
Can be rebutted:
o 🧾 Agreement in writing.
o 💔 Parties not on good terms (e.g. separated).
o 💸 High value consideration.
✅ Rebuttal Example:
Merritt v Merritt – Husband & wife separated, agreement in writing
= enforceable.
🔍 Examples:
1. Father pays son £100/week at uni
❌ No intention (conditional gift).
2. Relatives promise house if couple move in & help
✅ Yes – enforceable (Parker v Clark).
, 3. Workmates lottery syndicate
✅ Yes – informal but enforceable (Simpkins v Pays).
💼 5.2 Commercial Agreements
Strong presumption of intention.
Hard to rebut.
✅ Edwards v Skyways – Even “ex gratia” payments presumed binding.
❌ Rose & Frank Co v Crompton Bros – Express clause = no legal effect.
📘 6. Capacity
🧒 6.1 Minors
Minors = not bound (but other party is), unless:
o ✅ Contract is for necessaries (e.g. clothes, education, apprenticeship).
o ✅ Contract of service wholly beneficial to minor.
📌 Sale of Goods Act 1979 – Necessaries = suitable to minor’s life and current needs.
✅ Employment contracts allowed if beneficial overall.
❌ Proform v Proactive (Wayne Rooney case) – Agent deal = not necessary, minor
could rescind.
🧠🍷 6.2 Mental Incapacity / Drunkness
Contract = valid unless:
o Person incapable of understanding.
o AND the other party knew of this incapacity.
🛑 If both conditions met → contract = voidable.
- Binding unless person suffering from mental impairment/inebriation rescinds it
📌 Example: Jack w/ dementia signs contract. If other party didn’t know → contract
stands.
🏢 6.3 Corporations
A corporation = separate legal entity from individuals.
An unincorporated association is not a competent tracing party
Types:
1. Registered Companies
o Memorandum defines company activities.
o Companies Act 2006: Ultra vires contracts still valid if other party acted in
good faith.
2. Statutory Corporations
o Created by statute (e.g. councils).
o Contracts outside powers = void.
3. Limited Liability Partnerships (LLPs)
o Formed under LLP Act 2000.
o ✅ Have unlimited capacity.
📌 6.4 Capacity Summary
❗ Minors: Only bound by contracts for necessaries or beneficial service.
❗ Mental/Intoxicated: Contract voidable if incapable and other party aware.
❗ Corporations: Varying capacity. LLPs = full capacity. Statutory = restricted by
statute.
UNIT 2: CONSDERATION, CONTRACTUAL INTENTION
AND AGENCY
🔹 AGREEMENT (OFFER & ACCEPTANCE)
Definition of Offer: Expression of willingness to contract on certain terms with the
intention that it shall become binding as soon as it is accepted by the person to whom
it is addressed (Treitel).
Objective Test: Agreement judged by external conduct (Smith v Hughes).
Subjective Element: Offeree must believe offeror intended to make the offer (The
Leonidas).
🔹 OFFER OR INVITATION TO TREAT?
Shop Displays:
Usually invitation to treat (Pharmaceutical Society v Boots; Fisher v Bell).
Customer offers at checkout; acceptance = payment.
Exception: clear intent to be bound (e.g. sale displays in special sale).
Petrol Pump / Car Park / Website:
Pump/machine is the offer; use = acceptance.
Display of goods on websites = invitation to treat.
Advertisements:
General rule: Invitation to treat (Partridge v Crittenden).
Exception: Advertisement of reward- unilateral offer (Carlill v Carbolic Smoke
Ball).
o Waives need for communicated acceptance.
o Seriousness shown by £1,000 deposit = binding offer.
Rewards: Treated as offers (Williams v Carwardine).
🔹 UNILATERAL VS BILATERAL CONTRACTS
Unilateral: Promise for act (e.g., reward).
Bilateral: Promise for promise.
Auctions:
Bids = offers; hammer fall = acceptance (S.57(2) SGA 1979).
Bids can be withdrawn at any time before acceptance
Auctioneer acts for seller- bilateral contract between owner and bidder
Reserve price: Min. accepted price (S.57(3)).
Without Reserve: Highest bid must be accepted = unilateral offer (Barry v
Davies)
o If auctioneer refuses- claim in damages against auctioneer (Barry v
Davies)
Tenders:
Invitation to treat, unless commitment to accept highest (Harvela).
Reasonable expectation = obligation to consider (Blackpool & Fylde)
o Damages for loss of opportunity
🔹 TERMINATION OF OFFER
Ways to Terminate: Revocation, Rejection, Lapse of Time.
Revocation Rules:
Can revoke anytime before acceptance
o A promise to keep an offer open is not binding if they are gratuitous
promise (no consideration) (Routledge v Grant)
o If consideration is given, offer irrevocable (Mountford v Scott).
Must be communicated to the offeree(Byrne v Van Tienhoven).
o Third-party revocation OK if reliable (Dickinson v Dodds)
o Last known address valid if they moved without notification
o Withdrawal valid if offeree chooses not to read it (Trietel)
, Business hours notice = valid even if unread (The Brimnes).
Public offers revoked by sufficiently prominent notice in relevant newspapers
(Shuey v US).
Unilateral Contracts:
General view- acceptance only occurs when performance is complete
No revocation after performance begins (Errington v Errington).
Starting act = implied promise not to revoke.
Acceptance and consideration= commencement of the act
3.2 Rejection by the Offeree
An offeree may reject an offer expressly or impliedly.
A counter-offer is an implied rejection – Hyde v Wrench.
A mere request for information does not reject the offer – Stevenson Jacques
v McLean.
3.3 Lapse of Time
If the offer specifies a time limit, acceptance outside this period is invalid.
Otherwise, the offer lapses after a reasonable time (depends on context).
o E.g. Offers for perishable goods lapse quickly.
4. Acceptance
Acceptance must be complete and unqualified – it must mirror the offer.
Acceptance is judged objectively – would a reasonable person view it as
agreement?
💡 Example:
"Can I pay by credit card?" →
o Could be a simple query → acceptance valid.
o Could be a conditional offer → counter-offer → Hyde v Wrench.
4.1 Knowledge of the Offer
Offeree must know of the offer at the time of acceptance – R v Clarke.
Mixed motives don’t matter if the offeree knows of the offer – Williams v
Carwardine.
💡 Examples:
(a) Returns dog without seeing poster → no contract.
(b) Saw poster but forgot → no contract.
(c) Saw poster, returned dog partly for reward → valid acceptance.
Battle of the Forms
When parties exchange contracts on standard terms, issue = which terms
apply.
Butler Machine Tool v Ex-Cell-O →
o Last set of terms accepted by conduct wins ("last shot" rule).
Brogden v Metropolitan Railway → acceptance can be by conduct.
4.1 Certainty in Offer & Acceptance
Offer must be sufficiently certain.
Vague terms (e.g. “hire purchase terms”) → too uncertain – Scammell v
Ouston.
Implied agreement to reasonable price → can still be a valid contract.
Mechanism for deciding unclear terms (e.g. “market price”) → may be valid.
Formal contract not required if there's clear agreement – intention matters.
Trade custom / previous dealings can help determine if there’s a binding
contract – Hillas v Arcos.
,4.2 Communication of Acceptance
Must be communicated by offeree or agent – Entores v Miles Far East
Corp; Powell v Lee.
Offeror may waive need for communication – Carlill v Carbolic Smoke Ball.
Silence ≠ acceptance – Felthouse v Bindley.
4.3 Acceptance by Post
🟢 Postal Rule – Adams v Lindsell:
Acceptance complete on posting, and contract formed even if never received
– Household Fire v Grant.
🔴 Limitations – Postal rule only applies if:
a. It’s an acceptance,
b. Post is a reasonable method,
c. Letter is properly addressed & stamped,
d. Offeror hasn't excluded the rule.
Holwell Securities v Hughes: “Notice in writing” = postal rule excluded.
📮 Retraction of Postal Acceptance
No clear English authority; arguments for both sides exist.
o For: Protects acceptor if offeror unaware.
o Against: Gives acceptor too much power – unfair.
4.4 Acceptance by Electronic Communication
Entores v Miles Far East Corp:
o Where acceptance is instantaneous (e.g. email, fax), it must
be received to be effective.
o A telexed acceptance will be effective when it would be reasonable to
expect the recipient to have read it (e.g. during normal office hours)
No universal rule to determine when communication takes place- look at
intention, business practices and risk (Brinkibon Ltd v Stahahag Stahl)
📘 5. Intention to Create Legal Relations
💡 General Rule:
Domestic/social agreements – Presumption of no intention to create legal
relations.
Commercial agreements – Presumption of intention to be legally binding.
🏠 5.1 Domestic & Social Agreements
Presumption: No intention (💼 Balfour v Balfour).
Can be rebutted:
o 🧾 Agreement in writing.
o 💔 Parties not on good terms (e.g. separated).
o 💸 High value consideration.
✅ Rebuttal Example:
Merritt v Merritt – Husband & wife separated, agreement in writing
= enforceable.
🔍 Examples:
1. Father pays son £100/week at uni
❌ No intention (conditional gift).
2. Relatives promise house if couple move in & help
✅ Yes – enforceable (Parker v Clark).
, 3. Workmates lottery syndicate
✅ Yes – informal but enforceable (Simpkins v Pays).
💼 5.2 Commercial Agreements
Strong presumption of intention.
Hard to rebut.
✅ Edwards v Skyways – Even “ex gratia” payments presumed binding.
❌ Rose & Frank Co v Crompton Bros – Express clause = no legal effect.
📘 6. Capacity
🧒 6.1 Minors
Minors = not bound (but other party is), unless:
o ✅ Contract is for necessaries (e.g. clothes, education, apprenticeship).
o ✅ Contract of service wholly beneficial to minor.
📌 Sale of Goods Act 1979 – Necessaries = suitable to minor’s life and current needs.
✅ Employment contracts allowed if beneficial overall.
❌ Proform v Proactive (Wayne Rooney case) – Agent deal = not necessary, minor
could rescind.
🧠🍷 6.2 Mental Incapacity / Drunkness
Contract = valid unless:
o Person incapable of understanding.
o AND the other party knew of this incapacity.
🛑 If both conditions met → contract = voidable.
- Binding unless person suffering from mental impairment/inebriation rescinds it
📌 Example: Jack w/ dementia signs contract. If other party didn’t know → contract
stands.
🏢 6.3 Corporations
A corporation = separate legal entity from individuals.
An unincorporated association is not a competent tracing party
Types:
1. Registered Companies
o Memorandum defines company activities.
o Companies Act 2006: Ultra vires contracts still valid if other party acted in
good faith.
2. Statutory Corporations
o Created by statute (e.g. councils).
o Contracts outside powers = void.
3. Limited Liability Partnerships (LLPs)
o Formed under LLP Act 2000.
o ✅ Have unlimited capacity.
📌 6.4 Capacity Summary
❗ Minors: Only bound by contracts for necessaries or beneficial service.
❗ Mental/Intoxicated: Contract voidable if incapable and other party aware.
❗ Corporations: Varying capacity. LLPs = full capacity. Statutory = restricted by
statute.
UNIT 2: CONSDERATION, CONTRACTUAL INTENTION
AND AGENCY
