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Introduction to contract law
2 de outubro de 2023 18:50
Introduction to Contract Law
1. What is a contract?
-A contract is an agreement giving rise to obligations which are enforced or recognised by the law…Professor Treitel
-The law distinguishes social agreements as well as gifts, both of which fall outside the law e.g. spoken obligations and social agreements are not enforceable in the courts
2. Types of Contract
-Private, consumer, commercial
e.g. private contracts- selling a car, selling clothes
e.g. The Consumer rights Act 2015
-Unilateral contract v bilateral contract
- Bilateral: one promise in exchange for another promise (majority of contracts)
- Unilateral: one promise in exchange for the performance of a requested act e.g. a lost cat poster offering a reward.
3. Other introductory points
-Sources of the law; cases, statute, EU
-Decisions based on commercial expediency, fairness, equity
Introduction to contract law Page 1
,L 03/10/23 Offer
Thursday, September 21, 2023 6:50 PM
Offer and Acceptance
1. Formation: introduction
Objective test: reasonable person looking at the overview
- Agreement: offer and acceptance
- Professor Treitel ‘broadly speaking an agreement is made when one party accepts an offer made by the other party.’
- Consensus ad idem (meeting of the minds)
- ‘If the parties reach accord by means of offer and acceptance then they should be contractually bound’ Martin Smith v William s [1998]- they have obligations
- ‘English law, having committed itself to a rather technical and schematic doctrine of contract in application, takes a practi cal approach, often at the cost of forcing the facts to fit uneasily into
the marked slots of offer and acceptance.’ New Zealand Shipping Co v Satterthwaite [1975]
Criticism of common law- having to identify and slot offer, acceptance, and vote when deciding a case
Formation: an objective test
Smith v Hughes [1871]- leading case of objectivity
Facts-The claimant had purchased a quantity of what he thought was old oats having been shown a sample. In fact the oats were new o ats. The claimant wanted the oats for horse feed and new
oats were of no use to him. The seller was aware of the mistake of the claimant but said nothing. The claimant brought an act ion against the seller based on mistake and misrepresentation.
The courts need to look if there was an interception.
‘If whatever a man`s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party and that other party
upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had inten ded to agree to the other party’s terms’ Per Blackburn J
• If there wasn`t and objective test then it would be uncertain.
Caveat (latin for buyer beware)
2. Offer
Professor Treitel- ‘An offer is an expression of willingness to contract on specified terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is
addressed.’
If you dont fufill that acceptance then its likely there will be a breach of contract.
• Remedy for contract law is based on loss.
Distinction between an offer and an invitation to treat
Invitation to treat- means that one party is willing to invite an offer .e.g. display of goods
• there’s an intention to negotiate but not to be legally bound yet.
2.1 Advertisements
- Bilateral: Invitation to treat
A bilateral contract is an agreement between two parties in which each side agrees to fulfill their side of the bargain. Typically, bilateral contracts involve an equal obligation or consideration
from the offeror and the offeree,
Partridge v Crittenden [1968]
Facts: The defendant advertised for sale a number of Bramblefinch cocks and hens, stating that the price was to be 25 shillin gs for each. Under the Protection of Birds Act 1954, it was unlawful
to offer for sale any wild live bird.
Ratio: established the principle that an advertisement is generally an invitation to treat and not an offer, unless it is cle ar from the language used that it is intended as an offer.
- Unilateral: Offer
• A unilateral contract is a one-sided contract agreement in which an offeror promises to pay only after the completion of a task by the offeree. e.g. lost pet poster offering money
Carlill v Carbolic Smoke Ball Company [1893]
Facts:he defendant sold a medicine which they called a ‘Carbolic Smoke Ball’. When they advertised the product, they stated t hat they would pay a sum of money to any person who contracted
the disease despite using their product.
• No intention to create legal relations
• There was no acceptance
• Bound to contract to the whole world
‘It is not a contract made with the whole world. There is the fallacy in the argument. It is an offer made to the whole world and why should not an offer be made to the whole world which is to
ripen into a contract with anybody who comes forward and performs the condition.’ Per Bowen LJ
2.2 Goods sold in shops
Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953]
Facts: Shoppers could now pick drugs off the shelves in the chemist and then pay for them at the till. Before then, all medic ines were stored behind a counter meaning a shop employee would
get what was requested. The Pharmaceutical Society of Great Britain objected and argued that under the Pharmacy and Poisons Act 1933, that was an unlawful practice.
Principle: goods in a shop are an invitation to treat and only at the cash register does the customer make an offer
- Shopkeepers freedom of contract
- Practical implications for customer
Offer and Acceptance Page 2
, L 04/10/23 Auctions and Tenders
03 October 2023 11:41
2.3 Auctions
Payne v Cave (1789)
Sale of Goods Act 1979 section 57(2)
-Acceptance occurs at the fall of the hammer
- Auctions with a reserve
Bilateral contract governing the sale of goods - auctioneer promises to sell to highest bidder above reserve price
- Auctions without a reserve
1. Bilateral contract- auctioneer promises to sell to highest bidder
2. Collateral unilateral contract- auctioneer promises that the auction is without reserve (not the main thing but an extra bit that floats around the case)
Warlow v Harrison (1859)
Facts-The defendant, an auctioneer, offered a horse for sale at a public auction with no reserve.
Judgement- Court, it was held that a collateral contract between the auctioneer and the highest bona fide bidder exists when items are offered for sale without a reserve.
Since the auctioneer breached this contract, the plaintiff was entitled to sue him.
Barry v Davis [2000]
Facts-The claimant attended an auction run by the defendant. They bid £200 each on two machines. There was no reserve price on the machines, and no one else entered any bids. The
defendant’s auctioneer decided that the machines were worth far more than £200 each, being worth around £14,000 each. He withdrew them from the auction before the hammer fell.
Judgement- There was a breach of unilateral contract with the auctioneer.
Poole: ‘If the promise not to apply a reserve is broken, the auctioneer will be liable in damages to the highest genuine bidder who suffers loss. However, the highest genuine bidder will
not be entitled to the property sold, because his offer has not been accepted by the fall of the auctioneer’s hammer.’
2.4 Tenders
Tenders- various companies how much they will charge to complete a project. Tender allows for choice of bid.
Spencer v Harding (1870)
Facts-The defendants put out a circular which stated that they were accepting tenders for the sale of stock in a particular company. The claimant submitted a tender which complied with
all the requirements in the circular. Theirs was the highest tender. The defendant refused to accept the tender and sell the stock.
Judgement- A circular inviting tenders is not an offer which is accepted by the submission of tenders.
Harvella Investments Ltd [1984]
Facts- The first defendant held shares in company. By means of a telex communication they invited the claimant and the second defendant to make an offer to purchase shares by sealed
tender. They stated in this invitation that they bound themselves to accept the highest offer.
2.5 Automatic machines-exemption
Thornton v Shoe Lane Parking [1971]
“The customer pays his money and takes a ticket. He cannot refuse it. He cannot get his money back. He may protest to the machine, even swear at it. But it will remain unmoved. He is
committed beyond recall. He was committed at the very moment when he put his money into the machine. The contract was concluded at that time. It can be translated into offer and
acceptance in this way: the offer is made when the proprietor of the machine holds it out as being ready to receive the money. The acceptance is made when the customer puts his
money into the slot.” Lord Denning
National Car Parks Ltd v Revenue and Customs [2019]
2.6 Contracting online
- Electronic Commerce (EC Directive) Regulations (SI 2002/2013)
-Derived from the European Union.
Art 11 states that the provider ‘shall acknowledge receipt of the order to the recipient…without undue delay…by electronic means…’
Formation:
1. Display of goods online-ITT ( invitation to treat)
2. Offer to buy
3. Confirmation email ( is this acceptance?) Nowadays this email is not an acceptance.
4. Acceptance
- Consumer Contract (Information, Cancellation and Additional Charges) Regs 2013 (SI 2013/3134) (which have replaced the previous Consumer Protection (Distance Selling)
Regulations(SI 2000/2334))- for certain contracts there is a calling off period.
Covers online contracts (as well as on-premises contracts and other distant contracts)
Schedule 1 and 2- information the trader must provide
Part 3- Right to cancel
Formation
1. Offer
2. Acceptance
3. Right to cancel
Offer and Acceptance Page 3
