Agreement
Lack of formal requirements – UK
o Agreements not in writing
o Can be verbal and no particular words have to be used
Requirements of valid contract – CIA
o Consideration – value of bargain element of contract , an exchange
o Agreement = offer and acceptance
o Intention – parties must be deemed to have intended legal relations
Objectivity principle =
o objective test – an independent 3rd party looks at situation and determines what
intentions of the parties to be.
o Subjective test – ask offeror what their offer meant, find out actual intentions of the
party.
o Example objective = Smith & Hughes
Hughes wants oats from smith
Hughes needed old oats but smith selling new oat
Age of oats never discussed
Smith offered to sell oats
Smith sued Hughes for unpaid price of oats
Blackburn concluded legal contact of buying the pats – no matter subjective or
objective
There was never any discussion of age of oats – didn’t matter subjectively what
happened in Hughes head
,Offers
“An offer is an expression of willingness to contract on specified terms
made with the intention that it is to become legally binding as soon as
it is accepted by the person to whom it is addressed” - Treitel
Simply = offer is a statement of the terms on which the offer is willing to be bound.
Once a statement or action is categorized as an offer then the party who made the
statement puts themselves in a position where they become legally bound in the
other party accepts these terms
Offer vs invitation to treat
o First step in negotiations
o Action inviting other parties to make an offer to form contract
Gibson v Manchester city council [1979]
{ Took legal action arguing that the letter the council sent to him in
1971 was an offer to sell him the house which he agreed to by
sending the letter back.
{ Court of appeal held there was a binding contract
{ Denning (lawyer) said there is no need to look for the idea of offer and acceptance
in every case, look at correspondence as a whole, conduct of parties & see if
parties came to agreement.
{ Court of appeal – binding contract
{ Manchester council appealed & went to house of lords
{ House of lords disagreed – no offer formally made by the council
{ Councils letter stating ‘may be prepared to sell’ not sufficiently clear to be an offer –
merely an invitation to treat, open to offers.
Storer v Manchester city council [1974]
{ Similar facts to Gibson
{ Given 2 letters from treasurer of council first had details of mortgage offer
&2nd had agreements for sale – he signed and returned agreement.
{ Council changed policy on right to buy
{ He brought an act for specific performance of the offer
{ Court of appeal – said council had made an offer, clear that they intended to be
bound by their offer as soon as it was accepted.
2
, Distinguished from Gibson based on language used
Gibson – unclear ‘may’
Storer – clear ‘would’
Pharmaceutical society of Great Britain v Boots cash chemist [1953]
o Shoppers could now pick up drugs off shelves in chemist & pay for
them at till.
o Pharmaceutical society objected – pharmacy & poisons act 1933
argued pharmacist needed to supervise at point of sale.
o Argued that point of sale was when the item was picked up from
shelf.
o Boots said it was t cash desk.
o Queen’s bench division, court of appeal & high court sided with
boots 7 display of goods was not an offer but an invitation to treat. –
moment of completion at cash desk under supervision of
pharmacist.
o Rule = goods on display of shop are an invitation to treat not immediate
acceptance.
Shop window displays - Fisher v Bell [1961]
o Bell charged offence of offering for sale offensive weapon
o Restriction of offensive weapons act 1956
o Displayed knives in shopwindow with sign in front saying 4 shillings
o Bell won appeal
o Display of goods is an invitation to treat; it is not an offer .
o
3
Lack of formal requirements – UK
o Agreements not in writing
o Can be verbal and no particular words have to be used
Requirements of valid contract – CIA
o Consideration – value of bargain element of contract , an exchange
o Agreement = offer and acceptance
o Intention – parties must be deemed to have intended legal relations
Objectivity principle =
o objective test – an independent 3rd party looks at situation and determines what
intentions of the parties to be.
o Subjective test – ask offeror what their offer meant, find out actual intentions of the
party.
o Example objective = Smith & Hughes
Hughes wants oats from smith
Hughes needed old oats but smith selling new oat
Age of oats never discussed
Smith offered to sell oats
Smith sued Hughes for unpaid price of oats
Blackburn concluded legal contact of buying the pats – no matter subjective or
objective
There was never any discussion of age of oats – didn’t matter subjectively what
happened in Hughes head
,Offers
“An offer is an expression of willingness to contract on specified terms
made with the intention that it is to become legally binding as soon as
it is accepted by the person to whom it is addressed” - Treitel
Simply = offer is a statement of the terms on which the offer is willing to be bound.
Once a statement or action is categorized as an offer then the party who made the
statement puts themselves in a position where they become legally bound in the
other party accepts these terms
Offer vs invitation to treat
o First step in negotiations
o Action inviting other parties to make an offer to form contract
Gibson v Manchester city council [1979]
{ Took legal action arguing that the letter the council sent to him in
1971 was an offer to sell him the house which he agreed to by
sending the letter back.
{ Court of appeal held there was a binding contract
{ Denning (lawyer) said there is no need to look for the idea of offer and acceptance
in every case, look at correspondence as a whole, conduct of parties & see if
parties came to agreement.
{ Court of appeal – binding contract
{ Manchester council appealed & went to house of lords
{ House of lords disagreed – no offer formally made by the council
{ Councils letter stating ‘may be prepared to sell’ not sufficiently clear to be an offer –
merely an invitation to treat, open to offers.
Storer v Manchester city council [1974]
{ Similar facts to Gibson
{ Given 2 letters from treasurer of council first had details of mortgage offer
&2nd had agreements for sale – he signed and returned agreement.
{ Council changed policy on right to buy
{ He brought an act for specific performance of the offer
{ Court of appeal – said council had made an offer, clear that they intended to be
bound by their offer as soon as it was accepted.
2
, Distinguished from Gibson based on language used
Gibson – unclear ‘may’
Storer – clear ‘would’
Pharmaceutical society of Great Britain v Boots cash chemist [1953]
o Shoppers could now pick up drugs off shelves in chemist & pay for
them at till.
o Pharmaceutical society objected – pharmacy & poisons act 1933
argued pharmacist needed to supervise at point of sale.
o Argued that point of sale was when the item was picked up from
shelf.
o Boots said it was t cash desk.
o Queen’s bench division, court of appeal & high court sided with
boots 7 display of goods was not an offer but an invitation to treat. –
moment of completion at cash desk under supervision of
pharmacist.
o Rule = goods on display of shop are an invitation to treat not immediate
acceptance.
Shop window displays - Fisher v Bell [1961]
o Bell charged offence of offering for sale offensive weapon
o Restriction of offensive weapons act 1956
o Displayed knives in shopwindow with sign in front saying 4 shillings
o Bell won appeal
o Display of goods is an invitation to treat; it is not an offer .
o
3
