Offer and acceptance

• Offer


  A statement of willingness by an offeree to enter into a legally binding agreement based on the terms made by the offeror. The contract is formed when these terms are accepted.
• Offer


  • Must be distinguished from an invitation to treat
  • An item with a price tag is an invitation to treat, and not an offer - Fisher v Bell
  • An advertisement in a newspaper is an invitation to treat, and not an offer - Patridge v Crittenden
  • A promise to pay a reward can amount to an offer if the wording shows an intention to be bound - Carlil v Carbolic Smoke Ball
• Auction


  1. Bidder makes the offer

  2. Offer is only accepted when the hammer falls - British Car Auctions v Wright
• Tenders


  1. Invitation to tender is an invitation to treat

  2. The company makes the offer when it makes its bid - Harvela Investments
• A statement of price is not an offer - Harvey v Facey
• Offers must be communicated (Taylor v Laird) in certain terms (Guthing v Lynn)
• Offer revocation


  1. An offer may be revoked at any time until it is accepted - Routledge v Grant

  2. Revocation must be communicated - Byrne v Tienhoven
• Offer ending


  Offers can end through a lapse of time - Ramsgate Victoria v Montefiori
• Acceptance


  Acceptance must be unconditional, and any attempt to change the offer will be a counter-offer, which will destroy the original offer - Hyde v Wrench
• Requests for further information need to be distinguished from counter-offers. These will not destroy the original offer - Stevenson v McClean
• Acceptance must be communicated, silence is not enough - Felthouse v Brindley
• If a specific form of acceptance is requested as part of the offer, the acceptance may not be valid if it does not follow this - Yates Building Co v Pulleyn
• In a battle of the forms, the last shot approach is followed - Butler Machine Tool
• Postal rule - Adam v Lindsell


  1. Acceptance is valid on posting, even if it never arrives - Household Fire Insurance

  2. Businesses can avoid the postal rule by stating that they require notice of the acceptance - Holwell Securities
• A fax is accepted on reading - Entores
• An email acceptance is probably valid on sending, but this will depend on sound business practice - Thomas v BPE