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Contract Law: Offer and Acceptance
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Comprehensive notes for Contract Law in the UK, covering the first topic of offer and acceptance.
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CONTRACT LAW FORMATIVE ELEMENTS #1 & #2✴ Professor Treitel: a contract is an agreement giving rise to legal obligations which are
enforced/ recognised by law. If the law does not recognise or enforce an agreement, then
the right to sue is non-existent.
Common law insists on the presence of certain elements to create a binding,
enforceable contract. These elements are:
1. Offer & Acceptance
OVERVIEW:
2. Certainty
3. Intention to Create Legal
The law requires the presence of both an offer
Relations
and a corresponding acceptance to form a
4. Consideration
legally-binding contract.
- Offer: an expression of willingness to
contract on the specified terms.
KEY QUESTIONS:
Offer: To amount to an offer, the offeror must
make a clear, unequivocal statement
1. What is/ is not an offer? that he will regard himself as legally
bound to perform his promise, if the
2. How do offers differ within other party accepts.
unilateral contracts and bilateral
contracts? - Acceptance: a final expression of
assent to the terms of the offer, made
3. What are the requirements for in response to that exact offer.
an effective offer?
The mirror-image rule dictates that
4. What do we know about offers acceptance must mirror the terms of the
in the context of auctions and offer.
tenders?
As is the case with an offer, actual
Acceptance: communication (must be communicated
and has to reach the intended recipient)
1. What are the rules and is required for acceptance to be effective.
exceptions surrounding the
acceptance of an offer? Criticisms: the offer-acceptance rule
has been labelled as artificial and
2. If an offer is not accepted, what inflexible, especially as the courts have
else may happen to it? been able to find agreement in the
absence of these traditional criteria; the
mirror-image rule has given rise to
practical difficulties, in the form of the
‘battle of (standard) forms.’
REQUIREMENT
SUB-REQUIREMENT
EXCEPTION
SUB-EXCEPTION
, CONTRACT LAW FORMATIVE ELEMENTS #1 & #2
REQUIREMENTS FOR A VALID OFFER:
1. THE INTENTION TO LEGALLY COMMIT:
Firstly, for there to be an offer, there must be an intention to legally commit – this
also aids us in distinguishing between offers (a definite promise to be bound when
entering into the contract) and invitations to treat (an invitation to merely negotiate or
make offers during the pre-contractual process, in which the intention to legally
commit is usually missing).
Gibson v Manchester City Council [1979]: no intention to sell was found. Gibson did not
have a contract that could be enforced against the council. The terminology of the letter the
council sent to Gibson said: we may be prepared to sell your council house to you, for X
amount of pounds. The letter said ‘we may be prepared to sell your council house to you’
and thus, the court said that it was not in fact an offer.
Storer v Manchester City Council [1974]: in this case, the language was slightly
different. The letter said: I understand you want to buy your house/ wish to purchase your
house and we enclose the agreement for sale. If you sign the agreement and return it, we
will send the signed agreement on behalf of the council. Storer signed and returned it. In
between when Storer signed the agreement and sent it back and the date of case, the
council changed hands and no longer wanted to sell the house to Storer. The Court of
Appeal said Storer had done everything he could to bind himself to the sale and the council
had in fact made an offer.
- The key factor in these cases was the purported intention of the council. Did they
intend to sell or not? The way that we tell what the council’s intention was is through
the wording of the letters that they sent. Because the wording was different in Gibson
than in Storer, in S’s case, there was an offer and G’s, there was not (‘may be
prepared’).
- These two cases are contrasting. They happened in the 1970s, when housing stock
was being sold off by various councils. In between these cases, the majority in the
council changed hands, from the Conservatives, who wanted to sell off lots of council
housing, to Labour, who did not.
2. AN OFFER IS DISTINCT FROM:
If it is not an offer, there are three different things that it could be:
(i) AN INVITATION TO TREAT:
These are merely invitations to enter into negotiations.
E.g. goods on display in a shop on a shelf are generally treated as invitations to
treat.
Pharmaceutical Society of Great Britain v Boots [1953]: Boots was selling goods. One
of the goods that Boots sold and still does sell are pharmaceuticals, regulated by the
REQUIREMENT
SUB-REQUIREMENT
EXCEPTION
SUB-EXCEPTION
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