This document is a summary of all the topics needed for contract law in the first year of university, including offer and acceptance, consideration, terms, misrepresentation and frustration etc. Within this summary, it contains structures with each topic in contract law that will enable you to ans...
Definition- “.. an expression of willingness to contract on certain terms, made with the intention that
it shall become binding as soon as it is accepted by the person to whom it is addressed.”
Bilateral offer- both parties to do something in very clear way. Contract places obligations upon and
grants rights to both parties.
- Example- offer to pay money in return for goods.
- Case- Taylor v Laird
Unilateral offer- offeror to do something, no obligation on the offeree to do anything. No promise so
under no contractual obligation.
- Example- offering a reward for finding a lost cat.
- Case- Carlill v Carbolic Smoke Ball
Invitation to treat- indication that one person is willing to negotiate a contract, encouraging a
bilateral offer from another. Not an offer.
Examples of Goods on display Advertisements Auctions with a Giving
invitation to treat reserve information in
response to a
request
Case Fisher v Bell Partridge v British Car Harvey v Facey
(1961) Crittenden (1968) Auctions v Wright
Boots v PS GB Carlill v Carbolic
(1953) Smoke Ball
Invitation to tender- The request for tenders represents an invitation to treat and each tender
submitted amounts to an offer unless the request specifies that it will accept the lowest or highest
tender or specifies any other condition. If the request contains such a condition this will amount to
an offer of a unilateral contract where acceptance takes place on performance of the condition.
- Spencer v Harding (1870)- not an offer as didn’t specify were going to sell to highest bidder.
- Blackpool and Fylde Aero Club Ltd v Blackpool BC (1990)- request for tender considered a
unilateral offer.
Auctions-
With a reserve Without a reserve
Reserve price stated, inviting bids to be made Auctioneer who makes offer to sell goods to highest
constitutes invitation to treat. bid.
Bidders makes offer, offer accepted by auctioneer Offer accepted as soon as highest bid made.
bringing down hammer. Unilateral offer- only one outcome.
Auctioneer acts as agent for vendor.
,s.57 (2) Sales of Goods Act 1979
- The bid is an offer which the auctioneer may accept or reject.
- A sale by auction is complete on the fall of the auctioneer’s hammer.
- Auctions without reserve- highest bidder bring a claim in breach of a unilateral contract.
- An offer of a unilateral contract by auctioneer (ie a promise to accept the highest bid) is
accepted by the highest bidder.
- Barry v Davies (2000).
Termination-
Revocation
- Offer may be revoked by offeror at any time before acceptance (Routledge v Grant (1828)).
- Unless something has been provided in return to keep offer open (consideration) (Mountford
v Scott (1975)).
- Only takes effect when communicated to offeree (Byrne & Co v Van Tienhoven & Co (1880)).
- Communication of withdrawal of an offer by telex is effective when it could be read, rather
than when it is in fact read (The Brimnes (1975)).
- Communication of revocation does not have to be by, or with the authority of the offeror
(Dickinson v Dodds (1876)).
Implied rejection by counter offer (Hyde v Wrench, Stevenson, Jacques & Co v McLean)
Lapse
- Offer may lapse after a specified period or on the occurrence of a specified condition.
- If none, after a reasonable time.
- Ramsgate Victoria Hotel Ltd v Montefiore (1865-66).
Death of offeree
- Offeror if offer was to perform a personal service.
- Only terminate an offer if the offer provides for this to happen.
Unilateral
- Accepted by commencing performance.
- Complete performance- once start performing, under implied obligation not to revoke offer.
- Revocation after performance is not possible.
- Errington v Errington and Woods.
, Acceptance
Definition- “the unqualified expression of assent to the terms of the offer”.
Mirror images to all parts of offer (Hyde v Wrench).
Acceptance must be communicated to the offeror (Entores v Miles Far East Corp).
Silence- not valid acceptance (Felthouse v Bindley). Exceptions:
1. Course of dealing whereby offeree has taken benefit of services offered (conduct).
2. If its offeree who is attempting to hold offeror to offerors stipulation of silence.
3. If it were offeree rather than offeror who initiated proposal that offerees silence would
constitute acceptance (Re Selectmove Ltd).
4. If a party initiates a proposal and receives that proposal, but then does not respond for a
lengthy period, this may be treated as acceptance in some circumstances (Rust v Abbey Life
Assurance Co. Ltd).
Electronic world-
- Instantaneous
- Telephone, fax, email, telex
- Revocation communicated when it could be read/sent to (The Brimnes/Brinkibon Ltd v
Stahag Stahl).
- Acceptance takes place when offeror receives it.
- Exact time of acceptance depends on sound business practice and reasonable expectation of
the parties.
- Postal rule not apply.
Postal rule-
- Offer will be accepted when letter is posted, not when it reaches the offeror (Adams v
Lindsell).
Conditions:
Only applies to acceptances.
Where it was reasonable for the acceptance to be sent by post
Letter must be properly stamped, addressed, and posted- not apply if not.
Rule must not be excluded by the offeror.
Acceptance by conduct (Brogden v Metropolitan Railway Co)
Unilateral acceptance-
1. Commencing performance.
2. Complete performance, once start, under an implied obligation not to revoke offer.
Who can communicate acceptance?
Offeror need not personally communicate a withdrawal of an offer, providing withdrawal is clearly
brought to the other party’s attention. Must be by a reliable third party.
, Agency
Principal-person whose using an agent.
Agent-acting on someone else behalf.
3rd party-other person involved.
An authorised agent has the power to change the legal relations of another person (the principal).
As long as the agent was authorised by the principal and purporting to contract on behalf of the
principal the contract will be between the principal and the third party: the agent just drops out of
the picture.
Creation-
“a legal relationship between principal and agent created by consensual agreement to which they
alone are the parties”. (Freeman & Lockyer v Buckhurst Park Properties (Mangal) Limited (1964))
Actual Apparent/Ostensible
Definition- agent may have express Definition- agent does not have to have
authority to sell certain parties + agent actual authority from the principal; but
may also have implied actual authority could still be able to form a binding
to do things usually carried out by contract because he as a different form
sellers of goods such as advertise them of authority one which has been made
or receive payment for them. This is all apparent to the 3rd party by the
agreed between principal and agent principal.
and most agents will have contract of 1. At some stage the principle must have
some sort with principal. represented by words or conduct that
By looking at what the party has said or the agent had authority.
done, or surrounding evidence. 2. 3rd party must rely on this
Express/implied authority. representation believing that the agent
All agreed by agent and principal. had authority.
3. 3rd party must alter his position e.g. by
entering into a contract.
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