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Law Notes Contract Law Notes

What Are The Requirements Of An Offer And An Acceptance Notes

Updated What Are The Requirements Of An Offer And An Acceptance Notes

Contract Law Notes

Contract Law

Approximately 1511 pages

Contract 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).

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Offers

What is an offer?

  • Offer is

    • Manifestation of offeror’s willingness

      • to be bound by terms proposed to the offeree

        • as soon as the offeree accepts

BUT a party can deny the existence of a valid contract by saying offer was invalid because:

1. It was mistakenly made

  • A party can only escape if the offer, taken from the viewpoint of an objective observer,

    • was one which is was reasonable to say the offeror meant X and not Y as he actually said.

  • Q = Objectivity from whose point of view?

    • Howarth: three points of view

      • Detached Objectivity

        • Viewpoint of “fly on the wall”

        • Separate from either contracting parties

          • Objections:

            • Chen Wishart: does not meet the justification for objectivity (e.g. protect promises reasonable expectations)

            • Spencer: Only acceptable for law to force an agreement on party in rare circumstances

              • Surely unacceptable to force agreement neither wants on both parties.

      • “Promisor” objectivity

        • What a reasonable and honest promisor would perceive.

      • “Promisee” objectivity

        • What a reasonable and honest promisee would perceive.

    • Voster: problem with these classifications is that in bilateral contracts, both parties take on roles on promisor and promisee

    • Chen-Wishart:

      • Better idea is “actor objectivity” and “observer objectivity”

        • And hold that each party’s actions should be understood to the standard of what the reasonable and honest observer would perceive them to be.

  • Q = What evidence should be taken into account?

    • Two types can contrasted

      • Skeleton Objectivity

        • Limits conduct that counts and prioritises them in strict hierarchy of value

          • Signed final writing in a contractual document

          • Unsigned final writing in contractual document

          • Other writing or speech

          • Non verbal conduct (nod, wink, contractual performance)

          • Silence of Omissions

            • Silence generally not held to be acceptance, even if intended.

            • Wishart: looks at the conduct itself, not the person conducting it

              • Examples tend to be specific rules on what conduct are “offers” or “invitations to treat”.

      • Contextual Objectivity – tends to be the way forward.

        • Investor Compensation Scheme Ltd v West Bromwich Building Society

          • Lord Hoffmann:

            • Takes into account the parties involved and absolutely everything parties could reasonably use that would have affected the way intent was understood.

              • Assesses the meaning of the person, not just the meaning of the conduct.

                • Hence is more realistic.

          • Chen Wishart: drawback is the extent of the evidence, which gives problems if of contradictory meaning.

  1. B did not believe it was acceptance, regardless of the objective intention

  • Must the offeree hold an actual belief that the offer has been accepted, or if a reasonable person would consider the offer accepted, would this suffice?

    • If A seems to accept...

      • And B actually believes there has been accepted

        • Trietel: then the objective test is satisfied and A will be bound per The Hannah Blumenthal [1983]

    • Me: This is not correct

      • The Hannah Blumenthal [1983]: B and A agreed a contract. A failed to take any action for a while, so B applied that the contract had been abandoned.

        • Lord Brightman:

          • The test is not wholly objective

          • To entitle B to rely on abandonment, B must show

            • That A acted in such a way so as to entitle B to assume that the contract was agreed to be abandoned

            • And that B did assume that this was so.

              • The state of mind of B is vital and only evidence showing A’s intentions which comes to the knowledge of B at the time is relevant.

      • This only suggests that we look at the objective test from the perspective of A

        • It does not mean that if A actually believes it to be have occurred that the objective test is satisfied

          • Merely that A also has to actually believe that B had agreed to abandon.

          • Confirmed by Lord Goff in The Leonidas D that this was the approach to follow.

  • There is conflict over what should happen if B has no view on whether the agreement was accepted or not

    • The Golden Bear

      • Seems to suggest that if objectively it could be thought that there is acceptance,

        • Then the benefit of the doubt should go to B even if he appeared to have no view at the time

    • Trietel: This is wrong – as the purpose of the objective test is to protect B from prejudice if he relies on the purported acceptance

      • And if he has no view or does not actually believe it, then he hasn’t relied on it

        • Thus he should not be granted protection.

  1. It was not an offer at all

  • Supply of information

    • No offer made, even if communicates terms, unless X also communicates commitment to be bound by other’s acceptance of terms.

    • Gibson v Manchester CC [1979]: Manchester Council began selling off council houses, and responded to G’s enquiry saying a price they might be prepared to sell house. Council asked G to make a formal application which G did. Council in the interim changed political hands and stopped selling of houses.

      • Lord Diplock:

  • Council had never made an offer, as explicitly said in their correspondence - only given information in order to start next round of negotiations

    • Which was G making a formal application (i.e. an offer) to buy

      • Which they could then consider and accept or reject

        • Ergo, No acceptance by council, so no contract.

  • Lord Russell:

    • Words “may” can’t be construed as an offer

  • Displays of goods

    • PSGB v Boots [1953]:

      • Lord Goddart CJ:

        • Well-established principle that the mere exposure of goods for sale by a shopkeeper

          • indicates to the public that there is an invitation to treat but this does not amount to an offer to sell

            • 99 times out of 100 he probably will sell

              • But he still has the option to say “no”.

        • Ordinary principles of common sense and commerce must prevail

          • And holding that self service is an offer to sell is contrary to those principles and would entail serious results.

    • Chen Wishart: Problems:

      • Offer could be made by having goods on sale

        • And Courts could delay acceptance...

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