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GDL Law Notes GDL Contract Law Notes

Agreement Itclr And Capacity To Contract Notes

Updated Agreement Itclr And Capacity To Contract Notes

GDL Contract Law Notes

GDL Contract Law

Approximately 560 pages

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AGREEMENT 1: OFFER, ACCEPTANCE AND ITCLR

An offer is a promise or undertaking of an offeror to be contractually bound in the event of an unconditional acceptance being made. An offer must be clear, certain and final. If it is not, any purported acceptance will not result in a contract.

Types of contracts

  1. UNILATERAL

A unilateral contract is when one party makes an offer in terms which call for an act to be performed – performance of the act constitutes acceptance and this is when a contract is made. In unilateral contracts, only one party (the offeror) assumes an obligation. Acceptance of the offer does not need to be communicated and only performance of the required act(s) will equate to acceptance, i.e. promising to perform the act does not constitute acceptance.

CASES: Carlill v Carbollic Smoke Co.

Errington v Errington and Woods

  1. BILATERAL

In a bilateral contract, two parties assume an obligation to each other by exchanging promises. Bilateral contracts are the most common type.

RULE CASE
An offer must be clear and certain

GIBSON V MAN CITY COUNCIL

STORER V MAN CITY COUNCIL
Offer must be communicated TAYLOR V LAIRD
Advert – not offer but invitation to treat PARTRIDGE V CRITTENDEN

  • EXCPEPTION: Unilateral contracts

 CARLILL V CARBOLLIC SMOKE BALL CO

  • EXCEPTION: Manufacturers

 GRAINGER V GOUGH
Display of goods for sale – invitation to treat

FISHER V BELL (shop window)

PHARMACEUTICAL SOC GB V BOOTS (shelves)
Invitation to tender – invitation to treat SPENCER V HARDING

  • EXCEPTION: Tender expressly undertakes to accept highest/lowest bid

 HARVELA INVESTMENTS V ROYAL TRUST CO

  • EXCEPTION: Promise is made to consider all bids, then an offer has been made to consider

 BLACKPOOL FYLDE AERO CLUB V BLACKPOOL BOROUGH COUNCIL
Auctioneer’s requests for bids = invitation to treat, not an offer PAYNE V CAVE

  • EXCEPTION: auction held without reserve – unilateral offer made to accept to highest bid

 BARRY V DAVIES
Websites are ITTs not offers ARGOS TV CASE
REQUIREMENTS OF A VALID OFFER
RULE CASE EXCEPTION CASE

  • An offer must be clear and certain

GIBSON V MANCHESTER CC

City treasurer wrote to G saying that the council ‘may be prepared to sell the house at 2180. G completed application form and sent it back, as requested. Council subsequently changed its policy and could not proceed with G’s application.

HELD: There was no binding contract because no offer was made. The council’s letter stated it ‘may be prepared’ to sell the house – this lacked clarity and certainty.

STORER V MANCHESTER CC

Town clerk sent C a letter which stated ‘I enclose an agreement for sale’. C signed and returned agreement as instructed. Council’s policy changed prior to town clerk signing agreement.

HELD: Letter = offer because its terms were clear and certain. Acceptance took place when C signed and returned letter therefore there was a binding contract.

Communication: An offer must be communicated.

  • An offer can be communicated orally, in writing or by conduct.

  • An offer can be made to a specific person, group of people or to the whole world.

TAYLOR V LAIRD

The captain of a ship resigned during a voyage, but continued to offer navigation services for the remainder of the voyage even though this had not been requested by the owner of the ship. He later claimed in the courts for proper remuneration for his services from the owner.

HELD: The captain had not communicated his offer to provide such services. As such the owner did not have the opportunity to refuse or accept the offer as he had no knowledge of its existence. There was no binding contract.

  • Adverts are not offers, but invitations to treat.

PARTRIDGE V CRITTENDON

Partridge placed an advertisement containing the words ‘Advertisement of Bramble Finch Cocks and Hens’. Partridge was convicted of the offence of offering the birds for sale contrary to the Protection of Birds Act 1954 and appealed.

HELD: Advert was not an offer, but an invitation to treat therefore Partridge had not committed an offence.

  1. Clear and certain adverts from manufacturers with unlimited supply.

  2. Unilateral offers

  1. GRAINGER V GOUGH

Price list submitted by a wine merchant was held to be an invitation to treat and not an offer because the wine merchant would only have limited stock.

Obiter from Lord Herschell suggests that if the supplier is also a manufacturer, the advert could amount to an offer as, theoretically, they would have an unlimited supply of goods.

  1. CARLILL V CARBOLIC SMOKE BALL CO

D placed an advert om a newspaper offering to pay 100 to anyone who contracted influenza after buying and using their smoke ball as prescribed. C used smoke ball as instructed but still caught the flu.

HELD: The advert was a unilateral offer. Carlill had accepted the offer by completing the required act therefore there was a binding contract.

  • Display of good for sale is not an offer, but an invitation to treat.

FISHER V BELL

Bell convicted of offering flick knives for sale contrary to the Restriction of Offensive Weapons Act 1969.

HELD: Displaying goods on a shop window is not an offer, but an invitation to treat therefore Bell was not guilty.

  • Display of goods on shelves is not an offer, but an invitation to treat.

PHARMACEUTICAL SOC OF GB V BOOTS

Under the Pharmacy and Poisons Act 1933, it was an offence to sell prohibited medicines unless the sale was supervised by a registered pharmacist. Two customers took prohibited medicines from the shelves of a self-service shop and bought them.

HELD: Display of goods on shelves = ITT. Offer is made by the purchaser and accepted by the seller at the tills. Since there was a registered pharmacist supervising sales at the tills, Boots = not guilty.

  • Invitation to tender is not an offer, but an invitation to treat.

SPENCER V HARDING

A circular was sent out whereby stock was offered for sale by tender. Plaintiff submitted the highest bid, but C would not accept.

HELD: No contract had...

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