CONTRACT LAW
ANSWER TEMPLATES
Offer and Acceptance
For a legally binding contract to be formed, there are four requirements that need to be met.
There must be an offer made, acceptance by the offeree, sufficient consideration and intention to
create legal relations.
The issues to consider are whether a valid offer has been made and whether the offer, if any, has been
accepted.
Step 1: Determine if there is an offer or invitation to treat
An offer is defined as an expression of willingness by the offeror to contract on specified terms, made
with the intention that it is to become binding as soon as it is accepted by the offeree.
An invitation to treat is an attempt to induce or invite offers by the offeror, and it is simply an
expression of willingness to enter into negotiations with the other party. There is no intention to be
bound and no contract is formed at the moment. Any response to an invitation to treat is treated as an
offer, not an acceptance. A mere response to provide more information to an enquiry will not
constitute an acceptance (Harvey v Facey (1893)).
Offer
When __ stated __, he has expressed his willingness and intention to be bound immediately upon
acceptance by __. The specific terms have been laid out, seen in their earlier conversation/on the
written contract, with no room for negotiation. Hence, a valid offer has been made.
Invitation to treat
(Explain according to case)
1. Willingness to be bound (immediately upon acceptance)
2. Specific terms (or still under negotiations)
There are four stereotyped situations in which the law amounts it to an invitation to treat, rather than
an offer: (1) advertisements (2) display of goods (3) auctions (4) tenders.
(1) Advertisements are generally considered to be an invitation to treat (Patridge v Crittenden (1968)).
The rationale is that viewers might want to negotiate further and given that each seller has a limited
amount of goods to sell, he might not be in the position to sell to all that respond.
• The exception is the case of Carlill v Carbolic Smoke Ball Co (1893), where the court had
rejected that the advertisement was a mere puff as an intention to be bound is clearly shown
with the defendants’ deposit in the bank.
(2) The display of goods is generally regarded as invitations to treat (Fisher v Bell (1960)). The case of
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1953) further explains
that acceptance only occurs when the cashier accepts the buyer’s payment for the goods. The
rationale is that the seller can refuse to sell the goods if he had misquoted a wrong price as in, or if he
had run out of stock, and that a buyer can change their mind even after removing the article from the
shelf.
,(3) Third, the calls for bids in an auction sale is an invitation to treat, as explained in the case of Payne
v Cave (1789), each bid constitutes an offer which could be withdrawn at any time until it is accepted
with the fall of the auctioneer’s hammer. This is confirmed in the section 57(2) Sale of Goods Act.
Therefore, an advertisement of an auction sale does not constitute that an action will be held, as
shown in Harris v Nickerson (1873).
• An exception is illustrated in the case of Warlow v Harrison (1859), where it was held that an
auction advertised as “without reserve” amounts to an offer by the auctioneer that once the
auction commenced, the lot will be sold to the highest bidder however low the bids may be.
(4) Lastly, an invitation to tender is an invitation to treat and a tender is an offer made, as in Spencer v
Harding (1870).
• However, an exception would be if the invitation to tender amounts to an offer to accept the
higher bids, and thus, once such tenders are submitted, there is a collateral contract to such
effect, as shown in Harvela Investments Ltd v Royal Trust Co of Canada Ltd [1986].
Step 2: If there was an offer, was it terminated properly?
There are a few ways in which an offer can be terminated and in this case, the offer from ______ was
terminated through:
1) _____’s (defendant) revocation of the offer.
The general rule is that an offer can be revoked at any time before its acceptance, as illustrated in
Dickinson v Dodds (1876), and even before a promised specified period as shown in Routledge v Grant
(1828). However, the rule will not apply if the promise to not revoke an offer within a specified time is
supported by consideration, also known as a “firm offer” as in the case of Moutford v Scott (1975). In
this case, the offeror is bound to keep the offer open till the specified time period is up.
Additionally, revocation must be communicated to the offeree for it to be valid as laid down in Byrne
& Co v Van Tienhoven & Co (1880). It need not be directly communicated to the offeree as long as it is
communicated by some other reliable sources. In The Brimnes (1975), the court held that the notice of
withdrawal is deemed effective when it is received on the communication device during business
hours, even if it not read by the offeree yet. Similarly, in Dickinson v Doods (1876), it was also held
that the communication of the revocation by a reliable third party, in this case Dickinson’s own agent,
is valid.
By looking at our case, we can see that ______ has…
OR
For our case, ______ is trying to revoke a unilateral offer to the world and we have to determine
whether he/she had revoked the offer effectively.
In cases where the offer is made to the world, it is laid down in the principles of European Contract
Law (PECL) article 2:202(2) that “an offer made to the public can be revoked by the same means as
were used to make the offer”.
In this case, ______ had made a unilateral offer to the world through _______ and had revoked it
through the same mode of ______ (some factors to consider: is the size of the notice the same?) and
this is acceptable. Therefore, similar to the case of Shuey v United States (1875), ______ (ptf) is not
allowed to claim for the reward despite his/her ignorance of the withdrawal since the offer of reward
had been effectively revoked.
, Moreover, as in the case of R v Clarke (1927), an offeree is not allowed to claim for an offer for reward
that he is ignorant of at that crucial time. Similarly…
(if applicable) However, given that _____ has begun his performance of the offer, we have to apply the
two-offer approach. In the first offer, it is stated that the unilateral offer that can be revoked before an
offeree had embarked on performance as long as the offeror had used reasonable means to revoke
the offer. The second offer however, is an implied offer not to revoke the first offer once the offeree
begins performance, as shown in Dickson Trading (S) Pte Ltd v Transmarco Ltd (1989).
Therefore, ….
Alternatively, _____ (def) can argue for the compensation approach, which would allow him to revoke
his offer any time before the completion of ____ (plaintiff)’s performance but he is subjected to
compensate ____ (plaintiff) a reasonable sum in quantum meruit for ____’s (plaintiff) troubles as seen
in the case of William Lacey (Hounslow) Ltd v Davis (1957).
2) ______ (plaintiff) had rejected/made a counter-offer.
An offer can be terminated when an offeree rejects the offer, and rejection may be made in writing,
orally or by conduct. In this case, _____ has…
OR
A counter-offer is construed as rejecting the initial offer and stands as a new offer being capable of
being accepted by the offeror. As such, as stated in Hyde v Wrench (1840), once a counter-offer is
made, the original offer can no longer be accepted. However, a counter-offer is not the same as a
request for more information, as distinguished in the case of Stevenson v Mclean (1880).
3) ____’s offer had been terminated due to a lapse of time.
A fixed-time offer, an offer which is expressly stated to last for a fixed time, cannot be accepted once
the deadline is up. However, if no deadline is expressly stated, then the offer is generally considered to
be terminated after lapse of a reasonable time. What is a reasonable time would depend on the
circumstances of the case. In the case of Ramsgate Victoria Hotel Co Ltd v Montefiore (1866), ….
Similarly…
4) the death of _____ (plaintiff).
The death of the offeror or the offeree may in some cases terminate the offer.
The offer will terminate if the offeree knows that the offeror has died. However, if the offeree had
accepted the offer without knowledge of the offeror’s death, then the offer would still be valid as in
Bradbury v Morgan (1862). This excludes the scenario of which the offer involved personal services, as
an offer of services cannot be accepted.
On the other hand, if it is the offeree that had died before acceptance, then the offer made to him is
no longer capable of acceptance by him or his personal representatives, as illustrated in the case of
Reynolds v Atherton (1921).
5) _____ (plaintiff) had accepted the offer.
6) Failure of condition
Step 3: If the offer was accepted, was the mode of acceptance valid?
