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Summary Contract Law Revision Notes
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Revision notes for Contract Law
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Offer and Acceptance• The parties need to indicate by language and conduct an immediate readiness to
be bound
• Mirror rule → acceptance needs to match the offer exactly
• Offeree must know of the offer
Offer
Invitation to treat
• Fisher v Bell (1961)
An item and price tag is not an offer to sell → is just an invitation to treat
• Pharmaceutical Society v Boots (1953)
Goods on a shelf in a store is not an offer
• Harvey v Facey (1893)
Stating lowest price is not an offer
• Carlill v Carbolic (1893)
Advertisement counts as an offer → unilateral contract
Counteroffer
• Hyde v Wrench (1840)
Wrench offered to sell farm for £1200 but Hyde declined
Wrench wrote another offer for £1000
Hyde wrote back and offered to buy the farm for £950 → Wrench declined
Hyde then agreed to buy it for £1000 but Wrench refused to sell → not
breach of contract as Hyde's offer of £950 was a counteroffer → eliminates
original contract
Request for information
• Stevenson Jacques & Co v McLean (1880)
McLean offered to sell Stevenson iron for a certain price → offer was open
till Monday
Stevenson sent a telegram to McLean asking if they could pay in
instalments
McLean did not respond and sold the iron to another party without
informing Stevenson
, Stevenson sent a telegram on Monday to accept the offer
Courts held that McLean was in breach of contract as Stevenson's original
telegram was a request for information and not a counter offer
Offer can be revoked before acceptance but this needs to be
communicated
Whether something is a request for information or counteroffer
depends on the language and conduct
Acceptance
• Acceptance must be made by someone who knows about the offer
Methods of acceptance
• By conduct
Brogden v Metropolitan Railway (1877)
Metropolitan Railway drafted a contract to Brogden
Brogden made some adjustments to the contract and sent it back
Metropolitan Railway never responded with an acceptance BUT acted
as exactly stated in the contract
House of Lords held that this was acceptance by conduct
• Prescribed method
Manchester Diocesan v Commercial (1969)
Courts held that for the offeror to create a mandatory prescribed
method, they must explicitly state that it is the only method in the offer
Otherwise, any other equally effective method of acceptance is valid
• Generally, acceptance needs to be communicated
Entores v Miles Far East Corporation (1955)
• Without communication
Communication can be waived → either implied or stated
Carlill v Carbolic (1893)
If reasonable → where there is no communication due to faults of the
offerer
Tenax Steamship Co v Owners of the Motor Vessel Brimnes (1974)
• Message was not read by the defendant even though it was sent
during office hours
, BUT silence cannot constitute as acceptance → one cannot impose an
obligation on another to reject one's offer
Felthouse v Bindley (1862)
Postal rule
• Acceptance is effective as soon as it is posted
Leading case → Adams v Lindsell
Needs to be reasonable (eg. Parties lived in different towns, significant
period of time for acceptance)
• Holwell Securities Ltd v Hughes (1974)
If the need for receiving written acceptance is stated in the offer → postal
rule does not apply
• Henthorn v Fraser (1892)
Postal rule does not apply to the revocation of an offer
Battle of the forms
• Butler Machine Tool v Ex-Cell-O Corporation (1979)
Last shot rule
A contract is concluded on the terms submitted by the party who is the
last to communicate those terms before performance of the contract
commences
Termination of acceptance
• Revocation
Offerer can revoke offer anytime before acceptance
Cases
Byrne v Van Tienhoven (1880)
Dickinson v Dodds (1876)
Routledge v Grant (1828)
Errington v Errington (1952)
• Rejection
• Lapse of time
• Death of offeror
• Death of offeree
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