This guide will be sufficient to get a high 2.1/1 st in finals if you do only problem
questions as you will be able to answer all PQs. If you learn what is on this
document you will be ready to take your final exam.
There are some minor summaries of academics at the end for each topic, but the
document is mostly rules/case summaries in a guide form to be used step-by-step.
The main headings from the contents page are in neon pink.
CONTENTS:
1. Formation
2. Consideration
3. Privity
4. Breach/Damages
5. Interpretation/Incorporation/Implication
6. Misrepresentation
7. Mistake/Frustration
8. Consumer Protections
9. Defences
FORMATION
For a valid contract, there are 5 major requirements. The first is that there is an offer with a
reciprocal acceptance. There must be an intention to create legal relations, there must be
certain terms and there must be valid consideration for the contract.
1. FIRSTLY Is there an offer?
2. Is there an acceptance?
Offer
An offer is to be judged objectively, to consider whether there is an apparent intention to
contract that a reasonable person would interpret. This can be made expressly or impliedly.
The law draws a distinction between an offer and a mere invitation to treat, which merely
demonstrates an intention to negotiate.
● In Gibson v Manchester City Council [1978] the tenants of a council home asked the
council whether they would consider selling their home to which the council
responded they may be willing to sell for the laid-out price. The House of Lords
concluded that there was no contract for sale as the letter did not commit to a sale
as it only invited the tenant to formally make an offer. Blackpool
● In Partridge v. Crittenden [1968], an advertisement sought to sell birds which were
seemingly protected under s.6 of the Protection of Birds Act 1954 which made it an
offence to offer such birds for sale. D was not guilty of the offence as the
advertisement was merely an invite to treat.
● In Pharmaceutical Society v. Boots Cash Chemists [1953] Somervell LJ held that the
goods on the shelf were an invitation to treat, rather than an offer. A customer
makes an offer when they present their goods at the till, which are then accepted by
, the cashier so the contract is completed at the till under the supervision of a
pharmacist.
● In Blackpool and Fylde Aeroclub v. Blackpool BC [1990], the council invited bids to
operate leisure flights. Bingham LJ held that each company was entitled to have their
tender considered, and the invitation implied that all timely offers would be
considered so the council’s invitation was an offer of a collateral contract, and the
submission of a tender was an acceptance. Thus an invitation to tender before a
deadline may imply a collateral contract to consider all timely bids.
● Whilst this seems to be at odds with authority such as Gibson v Manchester
City Council [1978] which treats an invitation to make an offer as an invitation
to treat, the case seems to be an exception to the general rule decided on its
facts. As McKendrick notes, the fact that the invitation to tender was
addressed to a small number of parties, and the outcome was inline with the
assumption of commercial parties justified the departure from the general
rule.
● Lord Diplock in Harvela Investments v Royal Trust Co. Canada (1986)
recognised that an undertaking to award work to the lowest tender would
amount to a unilateral offer and requiring a two-contract analysis.
● Nolan suggests that online displays of items are merely invitations to treat, and when
a customer pays and orders an item, they are treated as having made an offer. The
online site can then either accept their offer through sending an order confirmation
email (as Amazon does) or accept through custom. Thus if a site cannot fulfil an
order, and it has not yet accepted the customer’s offer it can cancel the order since it
has not accepted the contract yet.
● Where the item is something which is received immediately such as a digital
album, the display online is an offer with the customer’s payment consisting
of an acceptance.
An offer can be revoked, but it must be communicated before the offer is accepted.
● In Byrne v Van Tienhoven (1880), D based in Cardiff made an offer to set tinplate to P
in New York who accepted instantly by telegram. D sought to revoke the offer by
letter, and P sued for non-delivery. Lindley J held that an offer can be withdrawn
before it is accepted but an uncommunicated revocation is no revocation at all and
the withdrawal was ineffective, since the postal rule does not extend to the
revocation of offers.
● In Dickinson v. Dodds (1876), a homeowner wrote a note to P offering to sell his
house but P was informed by his agent that the homeowner had sold his house to a
third party. The Court of Appeal held that there was no contract to order specific
performance in favour of. James LJ held that P’s knowledge (due to the third party
informing them) that the homeowner no longer wanted to sell was an equivalent to
a revocation. Mellish LJ held that their 2 minds must be in agreement at one time
which they were not.
, ● This case is not necessarily at odds with Byrne; it stands for another principle,
holding that communication of the withdrawal can be made by a third party.
● In Dickinson v Dodds (1876) an agreement to keep an offer open for the
claimant until Friday did not form the basis of a valid contract, since there
was no consideration for the exchange of the promise.
● Revocation of an offer via the same channel as the offer will suffice where it relates
to unilateral offer to whole world.
A unilateral contract deals with a promise in exchange for an act, rather than a promise for a
promise and thus only the offeree is bound by this when making the promise. Unilateral
contracts can be made with an offer made to the world, or to as specified group of people. In
unilateral contacts, the inference that is more commonly drawn is that an advertisement is
an offer rather than an invitation to negotiate which is a contrast to the presumption in
bilateral contracts that these are invitations to treat (Partridge v. Crittenden [1968]). In
these cases, the requirement of communication of the acceptance is often inferred to have
been waived as in Carlill v. Carbolic Smoke Ball Company [1893] so there is no requirement
to inform the offeror of the acceptance. Upon full performance, the contract is complete.
● In Carlill v. Carbolic Smoke Ball Company [1893] an advertisement promised the
reader that their product was effective at fighting the flu, and if after using the smoke
ball they caught the flu the company would pay them £100. The company made it
clear that they had deposited money in the bank to do this. Bowen LJ held that this
was a valid unilateral contract, with the offer made to the whole world. When there’s
a unilateral contract like this there is no need to notify that one has accepted the
offer.
● In Errington v. Errington [1952] a father bought a house in his sole name and told his
son and daughter-in-law that if they pay the mortgage, he will transfer the property
to them. When the father died, the mother inherited the house and sought to
remove the daughter-in-law. Denning LJ held that the father’s promise was a
unilateral contract which could not be revoked after embarking on the
performance. If the daughter-in-law continues payment the couple will be entitled to
have property transferred to them but if they do not then they have no such
entitlement.
● In Daulia v Four Millbank (1977), the Court of Appeal held P, having performed the
conditions on which D had agreed to, had completed the valid unilateral contract and
D in failing to enter into contract for sale was in breach of that unilateral contract.
● Gibbons v Proctor (1891) indicates that there can be an acceptance of an offer made
in ignorance of the offer but this is difficult since in that case it seemed that the
officer was aware of the offer of a reward for information leading to the arrest. The
general rule would then seem to be that there cannot be an acceptance of an offer if
the party does an act without the knowledge of the offer. Blackburn J in Tinn v
Hoffman (1873) made it clear that promises made on each side in ignorance of the
promise made on the other side cannot be construed as an acceptance of the other.
, ● Thus X has a remedy in damages of the breach of implied promise not to
revoke the offer once the performance has commenced made clear by Goff LJ
in Daulia v Four Mill Bank Nominees (1978).
Acceptance
An acceptance of an offer must be communicated or inferred from conduct, and it is
objectively determined considering whether a reasonable person would deem them to have
accepted the offer. An acceptance must be final and unqualified.
An offeree cannot accept an offer which they know nothing about.
Acceptance by conduct
● In Brogden v Metropolitan Railway Co (1877), the House of Lords held that D had
accepted the offer of a contract where there was no formal contract made by D had
consistently supplied C coal in accordance with C’s draft terms. The contract was
accepted by conduct.
Acceptance in a prescribed way
● Lord Blackburn in Brogden v Metropolitan Railway Co (1877) held that where an offer
expressly or impliedly stipulates that an acceptance is to take a certain form, the
offer must be accepted in that manner. However, Buckley J made it clear in
Manchester Diocesan Council for Education v Commercial and General Investments
[1969] that if the offer states a mandatory method of acceptance without insisting
that it is binding, any other method which is no less advantageous concludes the
contract. Thus if an acceptance is sent to a surveyor rather than the address specified
in a tender, this would still be a valid acceptance.
● An email sent to a different address, such as a work address, may be less
advantageous.
Silence does not amount to an acceptance*. *general & misleading formulation of the rule.
● In Felthouse v. Bindley (1862), a nephew had failed to sell a horse to his uncle when
the uncle sent a letter to his nephew offering to buy the horse and stating that if he
did not receive a reply he would assume it had been sold to him. Wiles J held that
the letter was an open offer, a mere memorandum of a bargain whilst Keating J held
that nothing had been done to pass the property to the uncle. As such an offeror
cannot impose an obligation on another to reject an offer to avoid entering into the
contract. Thus silence in itself cannot amount to an acceptance.
An acceptance must be final and unqualified. Applying the mirror-image rule, the response
must correspond with the exact terms in the offer which responds to the known offer.
● In Hyde v. Wrench (1840), D offered P his farm for £1,000 which P responded with a
counter-offer of £950. D rejected this, and P wrote a letter to say he would buy it at
£1,000. Lord Langdale held there was no contract as the counter-offer rejected the
previous offer. The mirror-image rule is then not met as the offeree modified a term.
● In Stevenson, Jacques & Co v. McLean (1880) Lush J held that a telegram asking
whether the offeree would consider another price was a request for further
information. He held that there was no counter-proposal but merely an inquiry which
was not a rejection of the offer.
