Complete overview of key principles per topic: contains in depth explanation of key principles, key cases and their facts if relevant, includes topics of:
FORMATION OF CONTRACT (offer, acceptance, consideration, intent to contract)
PROMISSORY ESTOPPEL
VITIATION OF CONTRACT: MISREPRESENTATION &
...
● Offer → willingness from one party (“offeror”) to enter into a legally binding contract, terms are
legally binding as soon as it has been accepted by an act, forbearance, or a return promise from
the offeree
● Not necessary for the offeree to be expressly named within the offer, a statement that is made to
the general public could be said to constitute an offer → no contract can arise until is has been
accepted by an ascertained person
● Offer may be ‘unilateral’ → performance on one side makes obligatory the promise of the other;
Carlill v Carbolic Smoke Ball Co [1892] EWCA Civ 1
● Offer may be ‘bilateral’ → outstanding obligation on each side
● A statement of fact made to supply information cannot be treated as an offer or be accepted to
constitute a valid
contract; Harvey v Facey [1893] AC 552
● An “invitation to treat” would not be considered an offer, it would only be inviting another to make
an offer rather than an offer in itself (ex. Where goods are displayed in a shop); Fisher v Bell
[1961] 1 QB 394; Pharmaceutical Society of GB v Boots [1953] EWCA Civ 6
● An advertisement is not an offer, but an invitation to treat; Partridge v Crittenden [1968] 2 All ER
421
● Advertisement may possibly be considered an offer given additional wordings to the primary
advertisement
● A counter-offer extinguishes the original offer → no legal effect in the original offer, original offer
cannot be accepted; Hyde v Wrench [1840] EWHC Ch J90
● Request-for-information for clarification on the original offer does not equate to a counter-offer,
and does not extinguish the original offer; Stevenson v McLean [1890] 5 QBD
● The offeree must know of the offer, no acceptance in ignorance of an offer
● “Cross-offer” → when two parties make the identical offer to the other, would not ordinarily make
a contract as there has been no reference to the other party’s contract for there to exist a valid
contract; Tinn v Hoffman & Co (1891) 64 LT 594
● Principle for a “cross offer” depends on the idea that the offeree must take the offer from the
offeror in its exact terms → no reference to which offer is being accepted as grounds for a valid
contract
● Conduct of rendering of services can constitute an offer; but where the offer is not communicated,
there can be no acceptance/rejection of the offer → services rendered were done without the
knowledge of the offeree → no valid contract and offeror cannot recover for the services
rendered; Taylor v Laird (1856) 25 LJ Ex 329
B. Agreement
● Acceptance → expression, by words or conduct, of assent to the terms of the offer in the manner
prescribed or indicated by the offeror
● Acceptance must be absolute, according to the terms of the offer → no qualification towards the
terms of the offeror (ex. References to continued negotiations on terms or a further written
contract)
, ● Acceptance does not require physical documents or verbal agreements between the parties,
acceptance may be implied by the conduct of the offeree through an unequivocal and overt act
(acceptance by conduct); Brogden v Metropolitan Rly Co LR 2 App Cas. 666
● For a “unilateral offer” acceptance may be constituted upon performance of the action stipulated
in the offer → performance rather than notice of acceptance to the offeror constitutes valid
contract formed ; Carlill v Carbolic Smoke Ball Co
● General rule that the offeree has an obligation to communicate acceptance to the offeror, whether
by the offeree or an authorized agent, only upon communication of acceptance would there be a
valid contract; Entores Limited v Miles Far East Corporation [1955] EWCA Civ 3
● Acceptance can be revoked at any time before it has been communicated to the offeror → would
not apply if acceptance has already been made by post according to the “Postal Rule”
● General rule that acceptance must be communicated to the offeror in the manner set out by the
offeror → if there is no insistence on a single method of acceptance, the offeree may use another
method of acceptance given that it does not prejudice the offeror
● Exceptions to the obligation to communicate acceptance - Offeror may waive the need of
communication
(i) Express Waiver → offeror expressly waives the need of communication to the offeree
(ii) Implied Waiver → reasonable inference for the waiver of the need of communication due to the nature
of the transaction (ex. General offer made to the public)
- Fault of the offeror for receipt of acceptance → offeror has an obligation to act in a reasonable business
to take note of communication, contract would still be binding where it is the fault of the offeror; Case of
the The Brimnes; Tenax Steamship Co v Owners of the Motor Vessel Brimnes [1974] EWCA Civ 15
- “Postal Rule” → where the post is in the contemplation of the parties (should prove that the post was in
the contemplation of the parties) as a means of communication, the contract is complete when the letter
of acceptance is placed into the post → application of the “Postal Rule” depends on the circumstances of
the case; Henthorn v Fraser [1892] 2 Ch 27
Exceptions to the “Postal Rule”
• “Postal Rule” will not apply if the offer stipulates that there must be written notification of acceptance for
a contract
to be formed
● “Postal Rule” will not apply if it leads to manifest inconveniences
● For methods similar to the mail (ex. Email or text messages) such would be considered as
instantaneous methods
similar to speech, “Postal Rule” would not apply and contract would only be formed when notice
of acceptance is communicated to the offeror (Denning LJ); Entores Ltd v Miles Far East Corp
[1955] EWCA Civ 3
● Offer cannot be binding if the offeree is not aware of the contract → US Court Case; Fitch v
Snedaker 38 NY 248
● Offer is binding even if the individual is wholly or partially motivated by considerations other than
the offer; Williams
v Carwardine [1833] EWHC KB J44
, ● Offeror cannot by the terms of the offer provide that the offeree’s silence constitutes agreement,
requiring the offeree
to take positive steps to reject the offer; Felthouse v Bindley [1862] EWHC CP J35
C. Termination
● Prior to acceptance, the offer creates no legal rights → termination can result from the offer being
revoked before acceptance, the offeree rejecting the offer, by the death of the offeror or offeree,
or by lapse of a reasonable time
● Offer is made irrevocable upon acceptance
● A tender creates a standing offer, which when accepted would manifest into a valid contract that
is then irrevocable; Great Northern Railway Co v Witham (1873) LR 9 CP 16
● Revocation before acceptance would not create legal liability; Offord v Davies (1862) 12 CBNS
748
● Termination of the offer would occur when the offeror notifies the offeree → similarly effective
when the offeree receives notification by a reliable third-party (must be proven by the offeror that
third-party was reliable); Dickinson v Dodds 2 Ch D 463
● Revocation of the offer would be effective where it is ‘brought to the mind’ of the offeree when it is
considered to be reasonable that revocation has come to the offeree’s attention
● An offeree who knows that an offer has been withdrawn cannot accept it even though
communication has not come from the offeror (notice by a reliable third-party)
● Termination must be brought to the attention of the offeree, “Postal Rule” does not apply for
termination of offer; Byrne v Van Tienhoven [1880] 5 CPD 344
● In a unilateral contract, there cannot be revocation once the performance of the offeree has
commenced; Errington v Errington [1951] EWCA Civ 2
● Offer would be terminated once the offeror is justified in inferring that the offeree does not intend
to accept the offer
● An offer may lapse due to the passing of time → offer may lapse within a reasonable time, or after
a specified time
has passed within the contract
D. Intention to Create Legal Relations
● An agreement will not constitute a binding contract unless it is one which can reasonably be
regarded as having been made in contemplation of legal consequences → mere statement of
intention in the course of conversation will not constitute a binding promise; Blue v Ashley [2017]
EWHC 1928 (Comm)
● Whether there has been contemplation of legal consequences depends on several factors
(1) Language and tone → whether the language used demonstrates a commitment, greater
commitment in
language can show a greater readiness to be bound
(2) Setting → where the supposed oral arrangement was made by the parties
(3) Occassion → whether there was a specific meeting for the agreement to be arrived at
• A general presumption against an intention to be legally bound for an arrangement between
close family members, does not imply that there is never an intention
● Arrangement between family members usually not held to be binding on the parties; Jones v
Padavatton [1968] EWCA Civ 4
● It is generally difficult to rebut the presumption against a readiness to be legally bound for family
relations
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