Contract Law Contract Formation:Agreement Contract Formation Agreement The first requirement for a contract is that there is anAGREEMENT. Generally, in contract an agreement occurs when…

Contract Law

Contract Formation:Agreement

Contract Formation

Agreement

The first requirement for a contract is that there is anAGREEMENT.

Generally, in contract an agreement occurs when oneparty makes an offer and the other party accepts thatoffer

OFFER

An offer is a proposal made on certainterms with a willingness to be bound ifthe proposal is accepted by those towhom it is addressed.

Offeror = Person making the offer

Offeree = Person to whom the offer isaddressed

An offer may be made in writing, orally, orby conduct.

An offer may be made to an individual orto a group (even to the whole world), e.g. areward for the return of a lost dog.

Carlill v Carbolic Smoke Ball Co [1892] 2 QB 4

An offer once made, can be accepted by theofferee.

At the point of acceptance the contract is formedand both parties are bound.

A proposal is NOT an offer if it containsreservations

The actual words used do not necessarily make astatement an offer –the word “offer” is usedeveryday without necessarily amounting to acontractual offer.

Spencer v Harding (1870) LR 5 CP 561

Offer v Invitation to Treat

Compare the following statements:

I am willing to sell my car to you for £10,000

I may be willing to sell my car to you for £10,000

Offer v Invitation to Treat

Contract requires offer and acceptance.

Contractual negotiations may include an invitation totreat, but this is not a requirement.

An invitation to treat cannot be accepted!!

Gibson v Manchester City Council [1979] 1 WLR 294, HL

Compare with Storer v Manchester City Council [1974] 1WLR 1403

Preliminary statements

Preliminary statements can also amount tobeing a mere an enquiry / request forfurther information.

Harvey v Facey [1893] AC 552, PC

“Will you sell Bumper Hall Pen? Telegraphlowest cash price.”

“Lowest price for Bumper Hall Pen £900”

“We agree to buy Bumper Hall Pen for £900asked by you”

Your turn!

Arthur of Dodgy Motors Scene 1

£5000 is offer /acceptance/ invitation to treat

I say ‘I’ll give you £4700’is offer / acceptance/ counter offer / invitation totreat

‘Make it £4800 ‘ says Arthur is offer / acceptance/ counter offer / invitation totreat

I say ‘£4800 with a free service’ is offer / acceptance/ counter offer /invitation to treat

‘Agreed ‘ says Arthur is offer / acceptance/ counter offer / invitation to treat

Do we have a contract? We do have a contract

£5000

£5000 invitation to treat

I say ‘I’ll give you £4700’ =offer

‘Make it £4800 ‘ says Arthur counteroffer

I say ‘£4800 with a free service’ counteroffer

‘Agreed ‘ says Arthuracceptance

We do have a contract

£4800 and free service…consideration

ANSWERS

£4800 is £4800 and freeservice … consideration

One more!…

‘How much for that motor?’ I say

‘ £5000‘ says Arthur is offer / acceptance/ counter offer / invitationto treat

I say ‘agreed if my wife likes the colour’ is offer / acceptance/counter offer / invitation to treat/ none

£5000

Arthur of DodgyMotors Scene 2

‘I come back half an hour later. ‘My wife does like the colour, it matchesher shoes, I’ll buy it’

This is offer / acceptance:did not accept in time/ counter offer /invitation to treat / none

‘Sorry Sir’ , sold it 10 minutes ago for £4750’ says Arthur

I say ‘I’ll sue for Breach of Contract’ ….will I win??

ANSWERS

‘How much for that motor?’ I say

‘£5000’ says Arthur offer

I say ‘agreed if my wife likes the colour’ none

I come back half an hour later. ‘My wife does likethe colour, I’ll buy it’ would be acceptance buttoo late!

‘Sorry Sir’ , sold it 10 minutes ago for £4750’says Arthur

I say ‘I’ll sue for Breach of Contract’..

I will lose

Auctions

Advertising future auction:

Harris v Nickerson [1873] LR 8 QB 286

Call for bids招标, bidding出价,投标, fall of hammer:

Payne v Cave [1789] 3 Term Rep 148

Barry v Davies [2000] 1 WLR 1962, CA

Now s.57(2) Sale of Goods Act 1979:

“A sale by auction is complete when the auctioneer announces itscompletion by the fall of the hammer or in other customary manner;and until the announcement is made any bidder may retract his bid.”

What do you think is the legal position with online auctionwebsites?

Goods on display

At what point have you entered into a contract to buysomething in a shop?

When you pick it up?

When you pay for it?

Pharmaceutical Society of GB v Boots Cash Chemists Ltd[1953] 1 All ER 482,

Fisher v Bell [1961] 1 QB 394

“It is perfectly clear that according to the ordinary law of contractthe display of an article with a price on it in a shop window ismerely an invitation to treat. It is in no sense an offer for sale theacceptance of which constitutes a contract.“ (Lord Parker CJ)

Advertisements

As a general rule, is an advert regarded as an offer or aninvitation to treat? Why?

Partridge v Crittenden [1968] 2 All ER 421

What if the word “offer” is used in the advertisement?

Spencer v Harding [1870] LR 5 CP 561

See also Grainger v Gough [1896] AC 325

Exception: UNILATERAL CONTRACTS

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

Discuss:

What is the difference betweenUnilateral Contracts and BilateralContracts?

E-commerce

Is the website an offer or an invitation to treat?

Invitation to treat

What about items in the virtual shopping basket?

Invitation to treat

加入购物车时,(我)还可以自由决定是否付款(也可以移出购物车)所以为invitation to treat

付款后为offer

卖家接受订单acceptance(因为还有可能没有货)

Automatic machine:offer

Which cases could you draw an analogy to when discussing thesepoints?

Termination of offers

Termination of offers

By acceptance

An offer is made irrevocable by acceptance

Payne v Cave (1789)

By rejection

Counter offer

Hyde v Wrench (1840)

Cf Stevenson Jacques &Co McLean(1880) e.g.mere enquiry

Harvey v Facey [1893]

Termination of offers

Lapse of offer

By passing of time

Ramsgate Victoria Hotel v Montefiore(1886)

By failure of occurrence of condition

By death (of either party)

Coulthart v Clementson (1879)

Bradbury v Morgan (1862)
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