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Summary Contract Law Seminar 1
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Contract law- seminar 11) An offer is a promise by a person/company to enter into a contract with another on a set of
terms with the intention of it becoming bound as soon as the other party accepts it. An offer
may be made to an individual, a group of people or just the general public on whole. An
offer can be written, verbal or just implied by conduct. The offer will contain the intention to
be bound only if the other party accepts. However, an invitation to treat will not contain that
intention; an invitation to treat is the term used to distinguish being an offer, an invitation to
treat is the term used to describe an ongoing contract due to negotiations etc.
2) An offer is able to be terminated before the acceptance has been made for example:
revocation/ withdrawal as shown in Routledge V Grant 1828 where the claimant had 6
weeks to make up his mind on whether he wants the lease or not, within 3 weeks the
claimant had already withdrawn. Another reason for termination of contract before
acceptance is rejection as in a counter offer is referred to as rejection of the original offer as
seen in Hyde v Wrench 1840. A lapse of time may merely terminate an offer before
acceptance which is where by there is a specified amount of time in which the party must
either accept or reject the offer and if this time is overdue then the offer no longer stands; in
Ramsgate Victoria hotel co. v Montefiore 1866 an offer to buy shares which was discussed in
June is not available to be accept in November. The offer can be terminated before the offer
is accepted where the offer is conditional which means that the offer is made along with
conditions, for example, if you were to hire a bike the condition would be to bring it back in
the way you first acquired it. The last reason an offer could be terminated before acceptance
is whereby the offeror dies. In Reynolds V Atherton 1921 stated that ‘an offer made to a
living person who ceases to be a living person before the offer is accepted is no longer an
offer at all’
3) The postal rule is an exception to the general rule that a contract is formed when an
acceptance of an offer is communicated by the offeree to the offeror ( Brinkibon Ltd ) it
stems from Adams V Lindsell 1818 where the offer of a bundle of wool was accepted but
before the letter delivered the wool was sold to a third party as they believed the offer
wouldn’t go forward. It means that an offer can no longer be revoked after the acceptance
has been posted; the problem is that the other party will not know the acceptance of the
offer until the letter is delivered to them. In addition, this is very outdated as new forms of
communication are present. There is now no reason why an acceptance should be lost or
delayed.
4) The advice I would give John is that he has the right to claim breach of contract as he never
looked at the answering machine message as he was at work and the offeree can only
presume the withdrawal has been acknowledged when it is in reasonable belief that the
other party had chance to see the message. He then sent the letter of acceptance within the
7 days of an open offer that still stood in his knowledge and therefore he accepted the offer
and withdrawal doesn’t stand an option.
5) A taxi in a taxi rank is an invitation to treat. When the customer gets into the cab that is an
offer no matter whether they know the price or not. The taxi driver then either accepts of
rejects the offer. There can sometimes be conditions to the offer for example, if they throw
up there is a certain charge.
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