Offer and Acceptance: Key Principles and Cases

This page explores crucial aspects of offer and acceptance in contract law, highlighting important cases that have shaped legal principles.

The Inland Revenue v Fry case established that an offeree must have knowledge of the offer for it to be valid. This principle is fundamental in understanding how offers operate in contract law.

Definition: Offer: A clear expression of willingness to contract on specified terms, made with the intention that it will become binding as soon as it is accepted by the person to whom it is addressed.

Several cases illustrate the importance of certainty and communication in offers:

• Guthing v Lynn: Terms of the offer must be certain • Routledge v Grant: Offers can be withdrawn before acceptance • Byrne v Van Tienhoven: Withdrawal of an offer must be communicated • Ramsgate Victoria Hotel v Montefiore: Time frame for acceptance must match the goods offered

Example: In Hyde v Wrench, introducing new terms was deemed a counter-offer, not an acceptance.

The Stevenson v McLean case clarified that requesting information is not a counter-offer, while Felthouse v Bindley emphasized that silence cannot constitute acceptance.

Highlight: The postal rule, as seen in Yates v Pulleyn, states that an offer is accepted as soon as the acceptance is posted.

The Brinkbon v Stahag Stahl Telex case introduced nuances to the postal rule, stating that for telex communications, the contract comes into being when acceptance is received.

These cases collectively form the backbone of offer and acceptance case law, providing crucial guidance on how contracts are formed and when they become binding.

Consideration and Contractual Duties in Contract Law

This page delves into the concept of consideration and the performance of contractual duties, highlighting key cases that have shaped these areas of contract law.

The principle of consideration is fundamental in contract law, with several important cases illustrating its application:

• Re McArdle 1951: Past consideration is generally not valid • Lampleigh v Braithwaite: Exception to past consideration rule when service is performed at defendant's request • Tweddle v Atkinson: Consideration must move from the promisee • Chappell v Nestle: Consideration needs to be sufficient but not adequate

Definition: Consideration: Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

The performance of existing contractual duties and its relation to consideration is explored through several cases:

• Collins v Godefroy: Performance of an existing duty is not consideration • Stilk v Myrick: Performance of an existing contractual duty is not sufficient consideration • Hartley v Ponsonby: Greater work due to more dangerous conditions can constitute consideration for extra pay • Williams v Roffey: Avoiding a penalty clause can be considered valid consideration

Example: In Williams v Roffey, a bonus for completing building work on time was enforceable as avoiding the penalty clause was held to be consideration.

The case of Shadwell v Shadwell established that an existing contractual duty owed to a third party is sufficient for consideration.

Highlight: The 4 types of consideration in contract law include executory consideration, executed consideration, past consideration, and nominal consideration.

These cases collectively form the foundation of understanding consideration in contract law, illustrating its importance in forming valid contracts and the nuances involved in determining what constitutes sufficient consideration.

Offer Acceptance and Consideration

This page examines key cases related to offer acceptance and the doctrine of consideration in contract law.

Harvey v Facey

This case established that merely stating a minimum acceptable price is not an offer to sell. Facey's telegram stating the lowest price he would accept for his property was not considered an offer, but a response to an inquiry.

Inland Revenue v Fry

This case emphasized that an offeree must have knowledge of an offer for it to be valid. Fry cashed a check intended as full settlement of a larger debt, but as he was unaware of this condition when cashing it, the full debt remained payable.

Highlight: This case underscores the importance of clear communication in contract formation.

Guthing v Lynn

This case established that the terms of an offer must be certain to be enforceable. A promise to pay an extra £5 "if the horse is lucky" was deemed too vague to enforce.

Chappell v Nestle

This important case established that consideration needs to be sufficient but need not be adequate. Nestle's requirement of three chocolate bar wrappers as part of the price for a record was deemed valid consideration, despite their negligible economic value.

Definition: Consideration is something of value given by both parties to a contract that induces them to enter into the agreement.

Williams v Roffey

This case modified the traditional rule on existing contractual duties. It established that a promise of extra payment for completing existing contractual obligations could be enforceable if it conferred a practical benefit on the promisor.

Example: A building contractor promised extra payment to subcontractors to ensure timely completion. This was held to be valid consideration as it helped the contractor avoid late completion penalties.

Invitation to Treat and Offer in Contract Law

This page delves into the critical distinction between an invitation to treat and an offer in contract law, showcasing several landmark cases that have shaped this area of law.

The case of Fisher v Bell is a prime example of how displaying price tags is considered an invitation to treat rather than an offer. Similarly, the Pharmaceutical Society v Boots case established that a contract is formed when goods are presented at the counter, not when taken off the shelf.

Example: In Partridge v Crittenden, an advertisement for Bramblefinch cocks and hens was deemed an invitation to treat, not an offer.

The Carlill v Carbolic Smoke Ball Co case is a classic illustration of a unilateral offer. The company promised £100 if anyone used their product properly and still got the flu, which was considered a valid offer.

Highlight: Unilateral offers cannot be withdrawn while the offeree is performing, as established in Errington v Errington & Wood.

Other important principles covered include: • The necessity of communicating an offer to the offeree $Taylor v Laird$ • The validity of withdrawal communication through a reliable third party $Dickinson v Dodds$ • The concept of auctions without reserve $Barry v Heathcote Bell$ • The distinction between asking for a minimum price and stating an actual price $Harvey v Facey$

Vocabulary: Unilateral contract: A contract where only one party makes a promise, and the other party accepts by performing a specified act.

These cases collectively form the foundation of understanding invitation to treat examples and the nuances of offer and acceptance in contract law.