formation of a contract

• Offer

  A proposal showing a willingness to contract on firm and definite terms
• Gibson v Manchester City Council


  The offer must be on definite terms. There can be no uncertainty.
• Offeree


  A person to whom an offer is made
• Offeror


  A person who makes an offer
• Invitation to treat


  An indication that a person is willing to negotiate a contract with another, but they are not yet willing to make a legal offer
• Partridge v Cittenden


  An advert is an invitation to treat.
• Carlill v Carbolic Smoke Ball


  In a unilateral contract, the offeror makes a promise in exchange for an act by another party.

  
  

  If the offeror fulfils the act, then the offeror is legally obligated to fulfil their promise.
• Fisher v Bell


  Goods in a shop window are an invitation to treat.

  
  

  They remain as such until the customer presents them at checkout. Here, the customer makes the offer.
• British Car Auctions v Wright


  At an auction, goods are an invitation to treat until the auctioneer bangs the hammer, accepting the bidder's offer.
• Harvey v Facey


  Requests for information are not offers.
• Thornton v Shoe Lane Parking


  An offer can be made by anyone to anyone.
• Taylor v Laird


  An offer comes into existence when the offeror communicates it to the offeree.

  
  

  It can only be accepted while it is opened.
• How does an offer end?

  - Revocation

  - Rejection

  - Time lapse

  - Death
• Dickman v Dodds


  A revocation is valid as long as it is communicated by a reliable person.
• Routledge v Grant


  An offer can be withdrawn at any time before the acceptance. This must be communicated.
• Hyde v Wrench

  If an offeree rejects an offer, they can't accept the same offer again later on. If the offer is made to a group, one person's rejection will not stop the rest of the offeree from being able to accept.
• Ramsgate Victoria Hotel


  An offer comes to an end when a reasonable amount of time has passed.
• Acceptance


  The communication of a final and unconditional agreement to all terms of an offer
• Felthouse v Bindley


  Acceptance must be a positive act. Silence cannot be acceptance.
• Yates v Pulleyn


  The offeror may ask for a specific method in which the acceptance must be communicated.

  
  

  This must be complied with to form a valid acceptance, but the Courts may waiver some instructions required.
• Stevenson v McLean

  Acceptance takes place when it is communicated to the offeror.
• Ways of communicating acceptance that require special attention

  1. Acceptance by conduct

  2. Acceptance by use of the post (Postal Rule)

  3. Electronic methods of communication
• Carlill v Carbolic Smoke Ball


  Acceptance can take place through conduct.

  
  

  The offeree fulfils their contract through performance.
• What do the Postal Rules do?


  Better the delay in time experienced when sending a letter
• What letters do the Postal Rules apply to?

  Letters of acceptance
• Adams v Lindsell

  1. The postal rules apply if the post is the usual or expected means of communication.

  2. The letter must be property addressed and stomped.

  3. The offeree must be able to prove the letter was posted.
• When does acceptance take place according to the Postal Rules?


  The moment the letter is posted
• Brinkibon Ltd v Stahag Stahl

  Acceptance occurs when the offeror is aware of the acceptance or when the communication has been received.
• Electronic Commerce (EC Directive) Regulations 2002


  Where a buyer is required to give consent through technological means, the contract is made when the buyer has received acknowledgement of receipt from the service provider.
• Consideration


  An exchange between two parties
• Promisor

  A person who makes a promise
• Promisee


  A person to whom a promise is made
• Currie v Misa


  Consideration is 'some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.
• Executed consideration


  An act in return for a promise
• Executory consideration

  A promise for a promise
• Chappell v Nestle Co.

  Consideration need not be adequate but must be sufficient.

  
  

  This is based on what the parties to the contract themselves agree on the value of the things being exchanged.
• White v Bluett


  Sufficiency means the consideration must be real and have some value.
• Re Mcardle


  Part consideration is not good consideration.

  
  

  Actions already completed before the time of agreement has no value when it comes to consideration.
• Re Casey's Patent


  If the promisor has an expressed or implied request for a task, then there is usually an implied understanding that the task should be paid for.
• Tweedle v Atkinson

  Consideration must move from the promisee.