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Offer And Acceptance Notes

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TABLE OF CONTENTS
I - Offer & Acceptance....................................................................................................................... 4
A - Offer & Invitation to Treat....................................................................................................... 4
Storer v Manchester CC (1974).......................................................................................4
*Gibson v Manchester CC [1979] 1 WLR 294...................................................................4 1/ Displays and advertisements............................................................................................. 4 a/ Principle = Invitation to Treat......................................................................................... 4
*PSGB v Boots [1952] 2 QB 795......................................................................................4
Partridge v Crittenden [1968] 1 WLR 1204......................................................................5 b/ Exception = offer............................................................................................................ 5
Chapelton v Barry UDC (1940)........................................................................................ 5
*Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256..........................................................5 2/ Timetables and automatic vending machines...................................................................5
Thornton v Shoe Lane (1971).......................................................................................... 5 3/ Tenders............................................................................................................................. 5 a/ General rule = invitation to treat....................................................................................5 b/ Exception = two-contract analysis.................................................................................5
Harvela Investments v Royal Trust Co of Canada [1986] AC 207....................................5
*Blackpool & Fylde Aero Club Ltd v Blackpool BC [1990] 3 All ER 25..............................6
B - Acceptance in bilateral contracts........................................................................................... 6
B.1 - Correspondence of acceptance with offer........................................................................6 1/ Conditional acceptance..................................................................................................... 6 2/ Counter-offer..................................................................................................................... 6
Hyde v Wrench (1840) 3 Beav 334..................................................................................6
Stevenson v McLean (1880) 5 QBD 346..........................................................................7 3/ "Battle of the forms"......................................................................................................... 7 a/ General rule = "last shot".............................................................................................. 7
Brogden v Metropolitan Railway (1877) 2 App Cas 666...................................................7
*Butler Machines v Ex-Cello Corp [1979] 1 WLR 401.......................................................7 b/ Exception = contrary intention.......................................................................................7 c/ Lord Denning's alternative approach in finding agreement............................................7
*Butler Machines v Ex-Cello Corp [1979] 1 WLR 401.......................................................7
B.2 - Nexus between offer and acceptance (ignorance of offer)...............................................8 1/ Cross offers....................................................................................................................... 8 2/ Rewards cases................................................................................................................... 8
R v Clarke (1927)............................................................................................................ 8
Gibbons v Proctor (1891) 4 LT 594..................................................................................8
Williams v Carwardine (1833).......................................................................................... 8
B.3 - Method of acceptance...................................................................................................... 8 1/ Acceptance by Conduct or acquiescence...........................................................................8 2/ Acceptance in a prescribed way........................................................................................ 8
Manchester Diocesan Council for Education v Comm. & Gen. Investments [1970] 1 WLR

242.................................................................................................................................. 8 3/ Acceptance by silence....................................................................................................... 8
*Felthouse v Bindley (1862) 11 CBNS 869.......................................................................8
B.4 - Communication of Acceptance......................................................................................... 9 1/ Postal acceptance.............................................................................................................. 9
Henthorn v Fraser [1892] 2 Ch 27...................................................................................9
*Byrne v Van Tienhoven (1880) 5 CPD 344.....................................................................9
*Holwell Securities v Hughes (1974)...............................................................................9 2/ Instantaneous acceptance................................................................................................. 9 a/ Two-way instantaneous (face-to-face, telephone)..........................................................9
*Entores v Miles Far East Corp [1955] 2 QB 327 (Lord Denning)...................................10 b/ One-way instantaneous (email, text messaging, answerphone messagine, fax)..........10
Page 1
CONTRACT: OFFER AND ACCEPTANCE C - Acceptance in unilateral contracts........................................................................................10
*Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256........................................................10
Errington v Errington [1952] 1 KB 290...........................................................................10
Daulia v Four Millbank Nominees Ltd [1978] Ch 231, 239.............................................10
D - Termination of an Offer........................................................................................................ 10 1/ Revocation by offeror...................................................................................................... 10
*Dickinson v Dodds (1876) 2 Ch D 463.........................................................................10 2/ Rejection by offeree......................................................................................................... 11 3/ Lapse of the offer............................................................................................................ 11 4/ Death of offeror or offeree...............................................................................................11 5/ Change in circumstances (subject matter deteriorates before acceptance)....................11
II - Certainty..................................................................................................................................... 11
A - Conditional Agreements....................................................................................................... 11
B - Vagueness and incompleteness...........................................................................................11
*British Steel Corp v Cleveland Bridge & Engineering Co Ltd [1984] 1 All ER 504.........11 1/ Previous dealing, custom and reasonableness................................................................12
Hillas v Arcos (1932) 147 LT 503...................................................................................12 2/ Severance........................................................................................................................ 12 3/ Agreements to negotiate or not to negotiate...................................................................12
*Walford v Miles [1992] 2 AC 128..................................................................................12 4/ Agreed mechanisms for ascertainment...........................................................................12
May & Butcher Ltd v R [1934] 2 KB 17..........................................................................12
III - Intention to Create Legal Relations............................................................................................ 13
A - Family and social agreements..............................................................................................13
A.1 - Presumption................................................................................................................... 13 1/ Between couples............................................................................................................. 13
Balfour v Balfour [1919] 2 KB 571.................................................................................13 2/ Pre-nuptial agreements................................................................................................... 13
*Radmacher v Granatino [2010] UKSC 42.....................................................................13 3/ Between parents and children.........................................................................................13
Jones v Padavatton [1969] 1 WLR 328...........................................................................13
A.2 - Rebutting the presumption............................................................................................ 13
B - Commercial agreements...................................................................................................... 13
Esso Petroleum v Customs & Excise [1976] 1 WLR 1....................................................13
*RTS Flexible Systems Ltd v Molkerei Alois Muller GMBH (2010) UKSC 14....................14
Blue v Ashley [2017] EWHC 1928 (Comm)....................................................................14

Page 2
CONTRACT: OFFER AND ACCEPTANCE I - OFFER & ACCEPTANCE
A - OFFER & INVITATION TO TREAT
An offer is (i) a proposal of the terms of exchange and (ii) an expression of willingness to be bound as soon as offeree accepts. It can be distinguished from:-

A request for or supply of information (ex. Upon C's request asking whether D will sell them Y
and price, D replied with a price, and C purported to accept the "offer" - held that it was not an offer because D merely supplied information - Harvey v Facey (PC))
An invitation to treat, i.e. an expression of willingness to embark on negotiations.

In negotiations, there will only be an offer where one party confers on the other the power to bind the speaker. Contrast:
Storer v Manchester CC (1974)-

Facts: D, council, sent a brochure advertising the details of a scheme for tenants to buy their council houses. C ascertained the price and sent an application to buy. The council sent a letter saying "I enclose the agreement for sale. If you sign it and return it to me I will send you the agreement signed in exchange". C signed and returned the agreement.
Held (CoA): a contract was concluded because the council's letter evinced an intention to be bound by the terms of the agreement as soon as C accepted it by signing and returning it.

*Gibson v Manchester CC [1979] 1 WLR 294-

Facts: C inquired and council responded informing him of the price at which the "council may be prepared to sell the house" and giving details of a mortgage proposal while expressly stating that the letter should not be regarded as a firm offer of a mortgage and that C should complete a further form if C wished to make a formal application. C applied, made some repairs, and the council put the house on the house purchase list.
Held (HL): the letter did not confer power on C to bind the council to sell the house as soon as
C assented; the council warned against regarding the letter as a firm offer and invited C to make a formal application (which became an offer). The council's conduct manifested an intention to accept C's offer, but had not yet completed the acceptance by communicating it to
C.

NB here Lord Denning (CoA) suggested that the sole test of offer/acceptance should be whether parties reached an agreement rather than forcing the facts into the template of offer and acceptance
(so in this case a binding contract HAS been reached).
Lord Diplock rejected this, holding that while some exceptional types of contract may not fit into offer/acceptance, this is not such a case. CoA was led into error by departing from the conception of a contract made from offer/acceptance. In this case, the letter was an invitation to make an application,
not accept an offer. Hard cases offer a strong temptation to let them have their proverbial consequences. It is a temptation that the judicial mind must be vigilant to resist.

1/ DISPLAYS AND ADVERTISEMENTS
A/ PRINCIPLE = INVITATION TO TREAT

Even if the word "offer" is used the court may still say it's an invitation to treat because the owrd is not used in its legal sense (Spencer v Harding), so the customer is generally regarded as making the offer when they present goods at the cash desk (and the trader can accept or reject).
*PSGB v Boots [1952] 2 QB 795
Page 3
CONTRACT: OFFER AND ACCEPTANCE -Facts: legislation required sales of certain pharmaceuticals to be supervised by pharmacists.
Boots introduced self-service shopping and supervision only came at the cashier's desk, so the question was at what point offer and acceptance came together.
Held: Boots did not contravene the legislation because displays and advertisements are not offers, because:
o If displays were offers, then the customer putting it into the basket amounts to acceptance so the customer can no longer change their mind1

If displays were offers, then vendors lose their freedom not to deal with particular customers2

If displays were offers, then vendors would have to trade with everyone who accepts even if they run out of stock3

The actual reason was probably that the court didn't want to deter self-service pharmacies by convicting Boots of an offence.
Partridge v Crittenden [1968] 1 WLR 1204Facts: D advertised birds for sale at a stated price, and was charged with the offence of
"offering for sale" wild live birds contrary to legislation.
Held: not guilty because an advertisement was only an invitation to treat and not an offer.

B/ EXCEPTION = OFFER

Chapelton v Barry UDC (1940)Facts: the display of deckchairs for hire on a beach with notice of the charges was an offer,
which was accepted by a customer taking the chair. This means that the ticket issued to the customer containing an exclusion of liability was not part of the contract (so that the customer could claim compensation when the deckchair injured him.

*Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256Facts: the advertisement was held to be an offer to the whole world and that a unilateral contract was created with those who met the condtion on the faith of the advertisement.

2/ TIMETABLES AND AUTOMATIC VENDING MACHINES
Subject to express disclaimers of obligations to provide services, railway and bus timetables and automatic machines outside car parks are offers that the customer accepts by buying a ticket.
Thornton v Shoe Lane (1971)Lord Denning: an automatic machine outside a car park stating charge rates makes an offer which the driver accepts by driving in and prompting the machine to issue a ticket (so any exclusion of liability contained in a notice inside the car park was ineffective). This is because there is no expectation or opportunity for negotiation, and no scope for withdrawal once the customer drives in.

3/ TENDERS
A/ GENERAL RULE = INVITATION TO TREAT

1 But this is not convincing because why not just find acceptance only when the customer presents the item for payment?

2 But bargaining is not the reality in shops (shops cannot refuse to trade with certain customers
(discrimination) or refuse to contract on marked prices (deceptive trading practices)), but even if it were, then just regard the customer as making a counter-offer that the trader can reject. Or the offer could be deemed to be made "subject to the pharmacist's approval".

3 But then just deem the offer to be made "subject to availability".
Page 4
CONTRACT: OFFER AND ACCEPTANCE General rule (Harvela Investments)

1. An invitation to tender is an invitation to treat

2. Submitting the tender is the offer

3. When the invitor accepts one of the tenders, there is acceptance
B/ EXCEPTION = TWO-CONTRACT ANALYSIS

However, when justice requires, courts have invoked two-contract analyses to impose liability for failure to consider (or accept) lowest/highest tender:
Harvela Investments v Royal Trust Co of Canada [1986] AC 207-

Facts: D decided to sell their shares by sealed competitive tender between two parties stating that they would accept the highest complying "offer". C tendered a fixed bid of $2,175,000 while the other tendered a referential bid of $2,100,000 or $x in excess of any other offer,
whichever is higher. D accepted the referential bid as a bid for $2,175,000+x.
Held (HL): D was bound to accept C's bid because D's invitation to tender was an offer of a unilateral contract to sell the shares to the highest bidder, even though the invitation asked bidders to submit "offers".4

*Blackpool & Fylde Aero Club Ltd v Blackpool BC [1990] 3 All ER 25-Facts: D invited tenders for a concession, but stated that "the council do not bind themselves to accept all or any part of the tender", and that no tender received after noon on Date X will be considered. At 11AM on Date X, C made a bid in the council letter box that said it was emptied at noon each day. The letterbox was not duly processed and the council did not consider C's bid, awarding the concession to another party with a lower tender.
Held: using the two-contract analysis5: one between the council and party whose tender is accepted, and one comprising the council's invitation to tender (a unilateral offer to consider any conforming tender), and that the council breached the second contract to consider C's tender.
Bingham LJ: tendering procedures are heavily weighted in favour of the invitor (he can invite as many or as few, need not tell anyone who and how many else, no need to accept any of them, and the invitees may have gone to considerable labour and expense in preparing tenders, without recompense if unsuccessful), so that the invitee is protected to at least the extent that if he submits a conforming tender before the deadline, he is entitled (as a matter of contractual right) to be considered (or at least considered if the others are).

1o In Blackpool Aero, CoA said there would be a duty to consider when:Invitation was made to a small number of parties
Duty to consider was consistent with the parties' intentions
Tender process was clear, orderly and familiar (enabling the court to state the unilateral offer with reasonable precision)

But in this case there was also the fact that (i) D was a local authority so owes a public law duty to act fairly and reasonably, and (ii) C was the existing concession holder so has something akin to a legitimate expectation in public law that its bid would be considered.
2o The content of the duty to consider would be breached if (i) D accepted the first tender received before expiry or (ii) D considered and accepted a tender received after the deadline (Bingham LJ).

B - ACCEPTANCE IN BILATERAL CONTRACTS

4 Here the other party's bid was invalid because D's invitation was to ascertain the highest amount that each was willing to pay, and this purpose would be frustrated by a referential bid (if both parties made referential bids, it would have been impossible to determine which was higest).

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CONTRACT: OFFER AND ACCEPTANCE

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