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GDL - contract law revision notes
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distinction level contract law revision notes (GDL)
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Contract W1 – Is There a Contract? Offer + Acceptance SPECIAL RULES FOR AUCTIONS HOW MUST THE OFFER BE REVOKED?§ An auctioneer’s request for bids is an invitation GENERAL RULE: revocation must be communicated
THREE ELEMENTS OF A CONTRACT – DISTINGUISH OFFER FROM INVITATION TO TREAT to treat
§ Agreement (offer and acceptance) § The bid is an offer which can be withdrawn until § By the offeror – Byrne v Van Tienhoven;
GOODS ON DISPLAY in shops are invitations to treat, not the hammer falls
§ Intention to create legal relations; and offers to sell: § By a reliable third party (doesn’t have to have
§ Consideration § The bid may be accepted or rejected by the
§ Goods in windows – Fisher v Bell been authorised, must be objectively perceived
auctioneer (fall of hammer) – s.57(2) SGA 1979
§ Goods on the shelf / self-service checkout – as being reliable) – Dickinson v Dodds
OFFERS Pharmaceutical Society GB v Boots If the auctioneer accepts a bid:
EXCEPTIONS:
§ The auctioneer is acting as an agent for the
DEFINITION: ADVERTISEMENTS:
owner and a bilateral contract is formed Business hours:
Trietel, the Law of Contract § Are usually regarded as invitations to treat – Partridge between the owner and the bidder
v Crittenden The Brimnes
§ “An expression of willingness to contract on
§ If the revocation is sent and received during
certain terms, made with the intention that it Reservice price:
However, they can be offers: normal business hours, and it could reasonably
becomes binding as soon as it is accepted by § It is possible for auctioneer to set a reserve price,
o Advertisements offering rewards are offers & the be assumed that staff would be at work to read
the person to whom it is addressed” which is the lowest price he will accept – s.57(3)
claimants reason for accepting an offer makes no SGA 1979 it, revocation is effective upon receipt, regardless
§ Confirmed in The Leonidas
difference to validity of accpetance– Williams v of whether it was read or not
§ There is a bilateral contract between seller and
AN OFFER MUST BE: Cardwardine § Each case should be considered in light of its own
bidder once auctioneer accepts the bid – with fall
§ Clear and have certainty of terms o Unilateral contract –ads can be an offer to the world circumstances
of the hammer
§ Addressed (from offeror to offeree) where the wording of the advertisement is such that
§ Demonstrate an intention to enter into legal there is a particularly strong commitment to sell on Without reserve price: Offeree Last Known Address:
relationship (willingness to be bound) certain terms – wording shows clear intention to be § The auctioneer is offering a unilateral contract Trietal, Law of Contract
bound by an acceptance Carlill v Carbolic Smoke Ball (to accept the highest bid) for a bilateral contract § Notice of withdrawal sent to the offeree’s last
“Expression Of Willingness” between the bidder and the seller known address would be effective if he has
MACHINES: moved without notifying the offeror
§ Expression - May take many different forms, § Barry v Davies - The auctioneer is bound to
§ E.g. petrol pump, pay and display accept the highest offer and can be sued in
e.g. letter, newspaper, long as it
§ There is a point of no return, this Is when the offer is damages if they do not Offers Made to the World:
communicates basis of the offer
deemed accepted depending on circumstances Shuey v United States
§ Willingness – there must be a willingness to
be bound by the proposal – must be § Petrol pump – squeezing the trigger TERMINATION OF OFFERS § If an offer is made to the public at large (Carill v
voluntary Carbolic Smoke), the offer can be revoked
TENDERS: Offers can be terminated by:
through the same channel as the offer was
§ Tenders are usually invitations to treat – tender is the 1. revocation of the offer made, as long as it’s the same prominence
“Intention”
Smith v Hughes – offer which may be accepted - Spencer v Harding 2. rejection by the offeree
§ Existence of an offer is objectively assessed 3. lapse of time 2. REJECTION BY OFFEREE
There are some exceptions:
§ The courts look at what was said and done o Harvela Investments Ltd - Unilateral contract –
between the parties, from point of view of a 1. REVOCATION OF OFFER § If an offer is rejected, it no longer exists and
specifically stated that they will be accepting the
‘reasonable person’ highest offer which was said to be binding cannot be accepted
General rule: an offer can be revoked at any time
§ Acceptance must be on the same terms as the
o Blackpool and Fylde Aero Club Ltd v Blackpool BC – If up until the point where it is accepted (Routledge v
The Leonidas – offer
the invitation to tender document confers rights in to Grant)
§ The offeree must also believe that the § Hyde v Wrench - A counter-offer is a rejection
the tenderer, they must be fulfilled – most commonly
offeror intended to make the offer EXCEPTIONS: § Stevenson v Maclean - A request for more
the right that, if correctly submitted, your tender will
§ An offer can be accepted and a contract § Mountford v Scott The offeror cannot revoke the information is not a counter-offer and original
be accepted
formed even if the offeror did not intend to offer if the offeree has given consideration for offer stands
make the offer, so long as the accepting the offeror keeping the offer open
party believed there was an offer UNILATERAL & BILATERAL CONTRACTS § Errington v Errington Woods - If it is a unilateral
3. LAPSE OF TIME
contract, revocation is not possible once the act
Unilateral contract: a promise in return for an act –
WHAT IS AN INVITATION TO TREAT? of acceptance has begun § Offer will lapse if there is an express condition –
promisor bound to perform if certain conditions
§ Van Tienhoven – offeror cannot revoke their specified amount of time
Invitation to treat: made without intention to met/until the act is completed
offer if offeree has posted acceptance, even if § Otherwise they lapse after a reasonable period
be bound by specific terms they didn’t know that the offeree has posted
Bilateral contract: one party makes a promise in return § What is reasonable depends on the facts – e.g.
§ Not binding until it becomes an offer for a promise their acceptance perishable goods
, DEALINGS MADE OF CONTINUING OBLIGATIONS POSTAL RULE EXEMPTION
ACCEPTANCE
Hussey v Horne-Payne
DEFINITION: Adams v Lindsell
§ In this case, the parties had, in correspondence, apparently agreed the key terms of a
Trietel, the Law of Contract § General rule is that acceptance must be communicated
deal for the sale of a property
§ “A final and unqualified expression of assent to the (Entores v Miles Far East)
terms of an offer” § Two letters in particular, if taken in isolation, looked as if they constituted a contract,
§ Where the postal rule applies, acceptance is valid upon
but the letter made no mention of payment by instalments
posting
An offeree must know an offer has been made in order § However, it was apparent from both earlier and later correspondence that at the time
to accept it when these letters passed between them, both parties saw issue of payment by
RULES FOR POSTAL RULE -
§ R v Clarke – someone tried to claim a reward they instalments as part of the deal still to be negotiates
only later became aware of and were unable to do so Household Fire & Accident Insurance v Grant
§ Where you have to find your contract, you must take into consideration the whole of the
§ Williams v Cardwardine – if you do know about the correspondence which has passed CONDITIONS - The Postal rule applies if:
reward, your motivation for accepting it is not § House of Lords decided that the two letters, taken in isolation, didn’t in fact constitute a. It was reasonable for the acceptance to be sent by post
relevant the final agreement b. The letter is correctly stamped, addressed and posted
Courts will refuse to enforce a contract if it’s not clear c. The offeror did not exclude the postal rule (implied or
Port Sudan v Chettiar
on the terms expressly) – Holwell v Hughes
§ Lord Denning: ‘I prefer to examine the whole of the documents in the case and decide
§ Scammell v Ouston – in the absence of any other from them whether the parties did reach an agreement upon all material terms ‘
details of the hire purchase agreement (e.g. duration, Holwell v Hughes
number, repayments) it is too vague to be contract § Wording was taken to impliedly reject the postal rule
§ Hillas v Arcos - However, an apparently vague phrase § E.g. ‘I need to know your answer by Tuesday’ – implied
may be given specific content by courts – e.g. where BATTLE OF THE FORMS
rejection of use of postal rule
parties have dealt with each-other before Brogden v Metropolitan Railway Co
§ Often two companies will send counter offers to each other containing standard sets of Grant
Acceptance must be as same terms as offer terms hoping the other party will accept on their terms § The acceptance if valid even if the offer is lost in the post
§ Hyde v Wrench - A counter-offer is an implied
§ This is due to a general view that the presiding terms are those which the other
rejection
company accepts
§ Stevenson v Maclean - A request for more
information is not a counter-offer and original offer Butler Machine Tool Co Ltd v Ex-cell O
stands § Not a true battle of forms but an exchange of incompatible terms INTENTION TO CREATE LEGAL RELATIONS
§ The offer was sent -> acceptance returned with changes to the offer -> acceptance was § Law works on the basis of rebuttable presumptions
sent back with no changes -> these were the terms to prevail
ACCEPTANCE MUST BE COMMUNICATED § The returning of the ‘tear-off slip’ was directed as acceptance DOMESTIC ARRANGEMENTS:
§ Lord Justice Bridge: thought the case was plainly governed by the ‘classical’ doctrine
Balfour v Balfour – there is a presumption of no intention to
General rule: acceptance must be communicated that a counter-offer amounts to a rejection of an offer create legal relations
§ By the offeree – Entores v Miles Far East Corp § Lord Justice Lawton: took a similar view
§ Or by an authorised agent – Powell v Lee Merritt v Merritt
§ Lord Denning: expressed his view that the better way was to look at all the documents
§ Rebutted – where the couple split up and deal with each
Silence cannot be acceptance passing between the parties
other at arms -length
§ Felthouse v Bindley – there will be no acceptance if
someone has said ‘if I don’t hear from you then you will Lidl UK Gmbh v Hertford Foods Ltd & Anor COMMERCIAL ARRANGEMENTS:
have accepted’ § In this case, the court summarised that the seller clearly didn’t intend to deal on the
buyer’s term, and the buyer knew that Edwards v Skyways – there is a strong presumption of
EXCEPTIONS § It summarised that the buyer didn’t intend to deal on the seller’s term, and the seller intention to create legal relations
§ Carlill v Carbolic Smoke Ball – if there is a unilateral knew that
§ As both parties contended that a contract had been formed, the only inference to be Rose and Frank Co v Compton Bros
contract
drawn was that they hadn’t agreed to contract on either party’s terms and conditions § Rebutted – where the agreement was explicitly made as
§ Re Selectmove – if the offerees bind themselves by
§ They must’ve agreed to contract on neither party’s terms – so neither party got the ‘an honourable pledge’
silence – if someone says ‘if you don’t hear from me I
accept your offer benefit of their own terms and conditions
,1. Is there a contract – state the three elements:
a. Agreement
b. Intention
c. Consideration – briefly show satisfied
2. Show whether there is intention to create legal relations?
3. If there is intention to create legal relations, state the issue
concerns agreement
4. Is there an offer?
a. Define an offer
5. Distinguish an offer from an invitation to treat
a. Case law
b. Self-service
c. Goods on display
d. Tenders
6. Rules for Actions
7. Tenders
8. Is there acceptance?
a. Define
b. Objective test
c. General rules
d. Communication
9. Postal rule exemption
10. Termination of offer
, With an agreement question, identify a CHRONOLGY for each claim
Then use the structure
Highlight separate claims in different colours so you don’t get mixed up
Keep different parties as part of separate claims
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