A clear and firm proposal of terms to form an agreement.
Acceptance
The offeree agreeing to all the terms proposed by the offeror. The terms agreed must mirror one another.
Acceptance ends the offer, there is now an agreement.
Gibson v MCC [1979]
A proposal of terms must be clear and firm to constitute an offer.
Invitations to treat are not legally binding offers.
Adverts constitute Invitations to Treat (ITT)
Goods in shop windows
Goods on display in the shop
Ads in writing
Fisher v Bell [1961]
Goods in shop windows are invitations to treat.
PSGB v Boots [1953]
Goods on display in the shop are invitations to treat.
Partridge v Crittenden [1968]
Written adverts are invitations to treat.
Why is it sensible to make the buyer the offeror?
Limited Stock
Right of refusal
Prevents prohibited contracts
Carlill v Carbolic Smoke Ball [1893]
Where an advert is so unequivocallyclear the court may treat it as an offer.
Harvey v Facey [1893]
An exchange of information is not an offer.
LimitedStock
If a seller was the offeror and had limited stock, he'd be in breach of an agreement when he is unable to sell to multiple buyers. It's sensible that a seller is the offeree.
Right of Refusal
It's fair to allow the seller to not sell a product to you. It's sensible that the seller is the offeree.
ProhibitedContracts
If goods on shelf were offers a seller would have to sell alcohol and tobacco to underage people. It's sensible that the seller is the offeree.
What is a bilateral contract?
A two-way obligation
Both parties are obliged to perform their side of the contract.
What is a unilateral contract?
A one-way contract, also called open offers or offers to the world
Fulfilled by the offeree's performance
No one forced to take on the contract
Where a proposal is not clear and firm it will be considered an invitationtotreat.
Ways an offer can end:
Acceptance
Rejection
Death
Counter Offer
Lapse of Time
Revocation
Rejection
Offer ceases to exist and cannot be accepted later.
Death
Offer ends when the offeror dies.
If the offeree is unaware of the death, the offer can still be accepted.
Counter offer
When the offeree wants to change a term of the offer.
Ends the original offer and a new offer is made.
Original offer cannot be accepted unless both parties agree.
Hyde v Wrench [1840]
Counter offers end original offers and put forward new offers.
Lapse of Time
Offers that are time limited must be accepted before they expire.
If not specified, an offer ends after a reasonable period of time.
Ramsgate Hotel v Montefiore [1866]
Lapse of time ends an offer.
Routledge v Grant [1828]
Offers can be revoked even if open for set time.
Revocation must be communicated before it is accepted.
Dickenson v Dodds [1876]
Communication of revocation can come from a reliable third party.
Ways acceptances can be made:
In Writing
Verbally
By conduct
General rule on acceptance
There is no acceptance until it is communicated.
Communication = valid when received by offeror.
Yates v Pulleyn
The offeree is obliged to communicate in the method requested by the offeror.
If no method is requested, any reasonable method can be used.
Felthouse v Bindley [1863]
Silence or inaction is not valid communication.
There has to be positive, consented acceptance, unless the contract is unilateral
Adams v Lindsell [1818]
Acceptance by post is communicated as soon as the letter is put into the postbox.
Must be stamped and addressed correctly
Sending letters must be usual method of communication.
Byrne v Van Tienhoven [1880]
Revocation by post must be communicated before acceptance made.
Holwell Securities v Hughes [1974]
If offeror requires notice in writing, the letter must be received and therefore the postal rule does not apply.
Entores v Miles Far East Corp [1955]
Acceptance communicated on receipt for instantaneous communication.
Brinkibon v Stahag Stahl [1983]
Messages of acceptance left during business hours are effective once received.
It does not matter if they have been read or listened to.
If a message is sent outside business hours, acceptance is communicated when office hours resume, unless communication is regular.