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Williams v Carwardine (1833)
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Contract Law
Offer (con.) & Acceptance
| Question | Answer |
|---|---|
| offer must | be communicated to the offeree/be certain |
| Williams v Carwardine (1833) | Knowledge is sufficient - motive is not relevant |
| Loftus v Roberts (1902) | Vague offers cannot be accepted/The terms of an offer must be fixed/A offered to employ B “at a West End salary to be arranged”. It was held that there was no contract because of uncertainty. |
| Hillas v Arcos (1932) | if an offer is capable of being made certain, eg by reference to a previous course of dealing between the parties or by reference to trade custom or by implying a term, then the court will do so |
| Nicolene v Simmonds | Alternatively courts have been prepared to ignore meaningless words in order to prevent an otherwise certain agreement from failing. |
| Walford v Miles [1992] | However, an incomplete agreement will not be enforced. It is for this reason that an ‘agreement to agree’ will not be enforceable |
| Pitt v PHH Asset Management [1993] | This, however, needs to be distinguished from a so-called ‘lock out’ agreement which if sufficiently limited in time may be enforceable. |
| An offer can come to an end, or cease to exist, in the following circumstances: | (i)Revocation by the offeror (cancellation)/(ii)Death of either party before acceptance/(iii)Failure of a condition to which the offer was made subject/(iv)Lapse of time |
| Revocation by the offeror (cancellation) | Revocation of an offer must be communicated to the offeree before acceptance to be a valid revocation/Byrne v Van Tienhoven (1880) |
| situations where revocation of an offer need not actually be communicated to the offeree | 1)Where offers are made to the world at large/2)In the case of an organisation/3)Where communication does not occur because of the offeree’s conduct |
| 1)Where offers are made to the world at large | it is impossible for the offeror to know whether everyone who has heard of the offer has also heard of the revocation/Thus it will be a valid revocation if the offeror has taken reasonable steps to bring the revocation to the notice of the public. |
| 2)In the case of an organisation | communication probably occurs when the letter is opened in the ordinary course of business or would have been so opened if the ordinary course of business was follows/Eaglehill Ltd v J Needham (Builders) Ltd (1973) |
| 3)Where communication does not occur because of the offeree’s conduct, eg | changing address without telling the offeror;receiving it but not reading it. |
| Dickinson v Dodds (1876) | Revocation of an offer need not be made by the offeror - provided it is received from a reliable source, it is a valid revocation |
| revocation of a unilateral offer | part-performance constitutes acceptance/thus preventing X from revoking his offer once Y has started walking - but that consideration is only provided by actually reaching York/ Errington v Errington [1952] |
| (ii)Death of either party before acceptance | If the offeree knows of the offeror’s death, he cannot accept/ |
| If the offeree does not know that the offeror has died, the offer continues in existence and can be accepted provided that the contract is capable of being carried out by the offeror’s personal representatives/Bradbury v Morgan (1862) | |
| (ii)Death of either party before acceptance | if the offeree dies before acceptance, the offer probably comes to an end/ Re Irvine 1928 (Canadian case). |
| (iii)Failure of a condition to which the offer was made subject: | An offer which expressly states that it will cease on the occurrence of a condition cannot be accepted if such condition occurs. |
| Financings Ltd v Stimson | Similarly a condition may be implied: eg (HP of a car - condition implied that the car would be in substantially the same condition at acceptance as it was at time of offer.) |
| (iv)Lapse of time | If an offer is made for a definite period only, it will automatically come to an end at the end of that period if it has not been accepted./If no definite time is stated, it will lapse after a reasonable time - this will depend on the circumstances |
| acceptance | a final and unqualified assent to the terms of an offer |
| rules regarding acceptance | /Acceptance must be unconditional and unqualified/A counter-offer is not an acceptance |
| counter-offer | a rejection of the offer and destroys it./Thus, if the offeree then changes his mind and tries to ‘accept’, there is no contract/Hyde v Wrench (1840) |
| Stevenson, Jacques and Co v McLean (1880) | a request for information is not a counter-offer, ie it does not destroy an offer |
| battle of forms | Where both parties deal on their own standard terms and there is some conflict, he who fires the last shot often wins/BRS v Arthur v Crutchley Ltd (1967) |
| Acceptance must be | communicated/ by the offeree or by someone with his authority./Powell v Lee (1908) |
| Acceptance must be | according to the method prescribed by the offeror./Whether that is expressed or implied, eg a postal acceptance where a telephone number was given would not be a valid acceptance. |
| Tinn v Hoffman (1873) | an equally expeditious method will be a valid acceptance - unless the offeror has made it clear that no other method is to be used. |
| Yates v Pulleyn (1975) | method of acceptance was valid and was no disadvantage to the offeror, as the method stipulated was only to ensure delivery and that had happened |
| Felthouse v Bindley (1862) | The offeror cannot insist that silence constitutes acceptance |
| Acceptance must | actually be communicated/that is, acceptance generally has to be received by the offeror to be effective./known as the ‘receipt rule’. |
| ‘postal rule’ | This rule states that, where acceptance is by post, communication takes place as soon as the acceptance is posted/Adams v Lindsell (1818) |
| Household Fire Insurance Co Ltd v Grant (1879) | It follows that there will be a contract even where the letter of acceptance is delayed in the post and even where the letter is lost in the post: |
| The postal rule/ conditions must be satisfied: | 1.it must be reasonable to use the post/2.parties must not have excluded it/3.letter must be properly addressed and stamped/ |
| Holwell Securities v Hughes [1974] | the application of the postal rule must not lead to manifest inconvenience or absurdity |
| Lord Denning in Entores Ltd v Miles Far East Corp [1955] | attempt to rationalise the respective scope of application of the receipt rule and the postal rule/ where transmission of the acceptance and its receipt by the offeror were non-instantaneous, as where the post was used, the postal rule should apply. |
| Lord Denning in Entores Ltd v Miles Far East Corp [1955] | where transmission of the acceptance and its receipt were more or less instantaneous, as happens in face-to-face, the receipt rule should apply because in these cases if the acceptance is not successfully communicated the offeree should be aware of this |
| Can posted acceptance be revoked by speedier method before receipt? | No English authority. |
| The Scottish case of Dunmore v Alexander (1830) | appears to permit such a revocation but it is an unclear decision. |
| New Zealand in Wenkheim v Arndt (1873)/South Africa in A-Z Bazaars v Ministry of Agriculture (1974) | A strict application of the postal rule would not permit such withdrawal./However, such an approach is regarded as inflexible. |
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