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Law Notes Contract Law Notes

Offer And Acceptance Pq Notes Notes

Updated Offer And Acceptance Pq Notes Notes

Contract Law Notes

Contract Law

Approximately 1511 pages

From the AuthorContract law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB contract law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

These were the best Contract Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students ...

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Formation of Contracts

1 Pre-contractual Negotiations

If negotiations are aborted, one may seek restitution of value for services and goods in the law of unjust enrichment: British Steel Corporation v Cleveland Bridge and Engineering Company.

The British Steel point applies only where no contract is formed. However, the “subject to contract” bar may be waived expressly or impliedly by contracting parties, thereby giving rise to contractual rights.

An inference of an implied waiver can arise where there has been significant performance and the negotiations have eliminated all points of difference: RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH (2010). Facts: RTS agreed to install machinery in Müller’s dairy products factory. The parties had initially contemplated (indicated by a ‘subject to contract’ formula meaning that no contract exists) that they would only enter a contract by formally signing it, following satisfactory negotiations. A dispute arose over whether there was a contract. Verdict (Lord Clarke): a contract arose. British Steel was distinguished “because here all the terms which the parties treated as essential were agreed and the parties were performing the contract without a formal contract being signed or exchanged, whereas [in the British Steel case] the parties were still negotiating terms which they regarded as essential”.

2 Offer and acceptance


A contract is normally formed by the exchange of an offer and acceptance: Gibson v Manchester City Council

Invitations to treat

Definition: An offer is a clear expression of an unequivocal willingness to be bound by the offeree’s acceptance and almost always has to be successfully communicated by the offeror to the offeree.

Distinct from: an invitation to treat, which is a preliminary communication not intended to be open to acceptance.

Crest Nicholson v Akaria: whether a communication contains an offer is determined using the objective principle, considering all the circumstances within which the alleged offeree receives the putative offer. The question is if the offeree, having the knowledge of the relevant circumstances which he had, and acting reasonably, would have understood that the offerer was making a proposal which he intended to be bound in the event of an unequivocal acceptance

  1. Advertisements are an invitation to treat

Apply the cases below analogously

  • Grainger v Gough (1896)

Facts: Price lists for wine were circulated by a wine merchant.

Verdict: Only an invitation to treat. If the circulation of the lists constituted an offer, this creates the risk that the seller is unable to carry out all the incoming contractual obligations to supply wine due to limited stocks.

  • Partridge v Crittenden (1968)

Facts: D put out an advertisement containing the words “Bramblefinch cocks, Bramblefinch hens, 25s. each” but without the words “offer for sale”.

Verdict: The advertisement constituted an invitation to treat and not an offer to sell due to the absence of the words “offer for sale”. T

However, if the advertisement advertises a unilateral contract—containing a clear-cut expression of willingness to be bound—an offer can be found.

  • Carlil v Carbolic Smoke Ball Co (1893)

Facts: D advertised that they would pay 100 to anyone who contracted influenza despite using their “smoke ball”. They also stipulated that the device had to be used in a certain way and said that 1000 had been deposited in a bank, ready to be paid out. P used the smoke ball but contracted influenza, and sued D for the 100.

Verdict: An advertisement containing an unequivocal offer of a reward can be construed as a true offer, not a mere invitation to treat, provided also that there is an intent to create legal relations. The advertisement was intended to spur readers into action and was therefore intended to create a unilateral contract.

  1. Goods on display (even with price tag on it) is invitation to treat: Pharmaceutical Society v Boots (1953)

Termination of an offer

There are various ways in which an offer may be terminated.

  1. Counter-offer

Definition: A clear presentation by the offeree of an alternative set of terms, or the alteration of a significant term. Andrews: a material `push-back’ or categorical revision. Note: this is distinct from a tentative or exploratory request for clarification, a “mere inquiry”, whereby the original offer still stands. The difference is between one of ‘asking nicely’ and ‘stating categorically (alternative terms)’.

  • Stevenson, Jacques & Co v McLean (1880), per Lush J at 349

`[T]he form of the [claimant’s] telegram is one of inquiry. It is not “I offer forty for delivery over two months,” which would have likened the case to Hyde v Wrench (1840)… The words are, “Please wire whether you would accept forty for delivery over two months, or, if not, the longest limit you would give.” There is nothing specific by way of offer or rejection, but a mere inquiry, which should have been answered and not treated as a rejection of the offer.’

Where the counter-offeree (that is, the original offeror) rejects the counter-offer, the original offer is no longer available for acceptance, in the absence of objective and explicit indication by the counter-offeree otherwise.

  • Hyde v Wrench (1840)

Facts: A offered in writing to sell to B a farm for 1000. B counter-offered 950, which was rejected by A. B then wrote and purportedly accepted A’s original offer, but A contested whether B had the right to revert to the original offer. B sued.

Verdict: Unsuccessful. B could not revive A’s original offer; by the time the counter-offer was rejected, the offer no longer exists.

Commentary: This rule provides for a) clarity in commercial dealings and b) protection of the offeror against haggling; otherwise the offeree could offer lower prices while reserving the right to accept the original offer.

Note: Livingstone v Evans (1925): Canadian case where the original offeror replied to the counter-offer “cannot reduce...

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