introduction and offers

7/25/2019 Introduction and Offers

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Introduction and Ofers

What is contract?Contract is an agreement giving rise to obligations which areenforced or recognised by law (Treitel The Law of Contract)

Binding Contract requires

1. Oer

2. cce!tance

". #ntention to create legal relations

$. Consideration

Oer % cce!tance & greementConsideration % #ntention & whether agreement is binding in co'rt

Consensus ad idemeeting of minds when two !arties to an agreement (contract) bothhave the same 'nderstanding of the terms of the agreement.*mith v +'ghes , farmer agrees to see oats to race-horse ownerdefendant checs sam!le of oats before he b'ys them , /rstdelivery is of new (green) oats b't 0 can only feed old (yellow) oatsto race horses 0 ref'ses to !ay , farmer s'es for breach of contractContract is for oats , new or oldContract de!ends on sam!le

How do you decide i contract is made?Obective Test , what 3easonable 4erson wo'ld have decided (notthe !arties) *'bective Test , what the !arties themselves tho'ght

Types o Contract5ilateral Contract6greement , both !arties mae !romise to eachother to do something7nilateral Contract6greement , !romise made by one !arty inret'rn for an act by the other !arty

OFFE !"# !CCE$T!"CE

Centra% Issues

1. 8hen deciding whether or not a contract has been concl'dedco'rts generally loo for an oer made by one !arty that hasbeen acce!ted by the other , this a!!roach has been critici9edas being too rigid and o't of ste! with commercial !ractice

2. n oer is a statement of a willingness to enter into a contracton the terms !'t forward. #t is generally contrasted with aninvitation to treat which is an invitation to enter into

negotiations on the terms !ro!osed.


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". n acce!tance is a /nal and 'n:'ali/ed e;!ression of assentto the terms of an oer. This is di


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their cond'ct (in !artic'lar the fact that the !lainti had done m'chwor in re!airing6im!roving the !remises and that the co'ncil had atone !oint !'t the ho'se on a list of !ending sales) , im!ossible toconcl'de that im!rovements had been carried o't on the basisco'ncil had committed itself to sell the !ro!erty. 4lainti co'ld not

!lace reliance on the fact that 'nnown to him co'ncil had !'tho'se on list of !ending sales.

*torer v anchester City Co'ncil=acts? Co'ncil writes to *torer and agrees to sell the ho'seagreement is legally binding , instr'ctions to *torer to /ll inagreement and send to Co'ncil before cler can co'ntersignco'ncil changes hands and ref'ses to sell to *torer+eld? *torer is fo'nd to have a binding contract , *torer has the risof !ro!erty , res!onsible for any damage inc'rred to !ro!erty ,s'ord +erschell? The transmission of a !rice list does notamo'nt to an oer to s'!!ly an 'nlimited :'antity of the winedescribed at the !rice named so that as soon as an order is giventhere is a binding contract to s'!!ly that :'antity. #f it were so themerchant might /nd himself involved in any n'mber of contract'alobligations to s'!!ly wine of a !artic'lar descri!tion which he wo'ld

be 'nable to carry o't his stoc of wine being necessarily limited.


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#n the case of 'nilateral contracts advertisements are oers and notinvitations to treat

- #n 'nilateral contracts only one !arty is 'nder obligation toanother

- 4erformance of the act s!eci/ed in the oer constit'tes

acce!tance and need not be comm'nicated to the oeror

Carlill v Carbolic *moe 5all=acts? C*5 is 'sed according to instr'ctions 'sers wonAt get G'H C*5will !ay I1JJ to whoever 'ses it and gets G'. 4lainti relying onthis advertisement !'rchased and 'sed !rod'ce as directed b'ts'bse:'ently ca'ght inG'en9a. Carlill s'es C*5 for breach ofcontract , 0 arg'es that there is no contract not !ossible to entercontract w world at large (not commercially viable)+eld? CO disagreed w 0 - Kot a contract w world at large oer toworld at large that ri!ens into an agreement when someone'ndertaes the act !rescribed , recogni9es 'nilateral contracts e;istwhere one !arty maes oer to world at large and another !artyacts4rinci!le? n oer can be made to the world at large and can beacce!ted by anybody who !erforms the necessary actions. 8herethere is a 'nilateral oer acce!tance occ'rs when the oeree f'lly!erforms the re:'ired act.K.5. 0efendants arg'ed that there was no consideration.Consideration re:'ires the e;istence of a bargain between !arties ,both !arties m'st have contrib'ted something towards the

agreement. C , consideration on 2 gro'nds? bene/t defendantsgained d'e to 'se of smoe ball as a res'lt of advertisementdetriment to Carlill by 'sing smoe ballK.5.2. #ntrod'ced doctrine of intention to create legal relations ,advertisement was not mere !' and was intended to be'nderstood by the !'blic as an oer which was to be acted '!on ,lang'age of advertisement , sign of sincerityK.5.". L'estion arises of when Carlill com!letes acce!tance ,5owen >M held that it was when she com!leted the co'rse (ratherthan when she began it). 4erformance of condition is s'


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>efcowit9 v @reat innea!olis *'r!l's *tores=acts? 0 !laced the following advertisement in a news!a!er?*at'rday D .. *har! " 5rand Kew ='r Coats 8orth to I1JJ.JJ.=irst Come =irst *erved I1 Nach. 4 was the /rst !erson to come into

the store b't 0 ref'sed to sell it to him as they stated there was anim!lied cla'se that the oer was only o!en to women.+eld? The 'dgment states that the test of whether a bindingobligation may originate in advertisements addressed to the general!'blic is whether some !erformance was !romised in !ositive termsin ret'rn for something re:'ested. #t was also held that the wordingof the advertisement was clear de/nite e;!licit and left nothingo!en for negotiation , the advertisement was fo'nd to be an oerand the 4lainti acce!ted it by following the s!eci/ed instr'ctionsand being the /rst !erson to come into the store as s!eci/ed.K.5. #m!lied cla'se (only sale to women) was not mentioned inadvertisement. 8hile an advertisement has the right to modify theoer before acce!tance he does not have the right afteracce!tance to im!ose new6arbitrary conditions not contained in the!'blished oer.

#isp%ays

@eneral r'le? dis!lay of goods is an invitation to negotiate and notan oer

=isher v 5ell=acts? dis!lay of Gic-nife in sho! window seller !rosec'ted forselling oensive wea!on+eld? dis!lay is not an oer b't invitation to treat , seller is notoering to sell anything , :'ite im!ossible to say that an e;hibitionof goods in a sho! window is itself an oer for sale.

4harmace'tical *ociety of @5 v 5oots=acts? 5oots dis!layed medicines on their shelves which 'nderstat'te m'st be sold 'nder the s'!ervision of a registered!harmacist. 4harmacist can ref'se to allow !'rchase at cash des.

+eld? C held that contract of sale occ'rred at cash des not whenthe c'stomer too the medicine o the shelf and !laced in basetso stat'tory re:'irement was satis/ed , dis!lay was only invitationto treat (!lace considerable em!hasis that once an article has been!laced in the rece!tacle the c'stomer is bo'nd witho't !aying tob'y it and not to s'bstit'te the article for one fo'nd later)4rinci!le? 0is!lay of goods for sale is #TT oer to b'y is made byc'stomer !resenting goods to cashier

Chwee in eong v 0igilandmall.com 4te >td B*inga!ore

=acts? L'estion of whether an advertisement on a website is aninvitation to treat or an oer


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+eld? #n !rinci!le website ad is no dierent from a billboard o'tsidea sho! or an advertisement in a news!a!er. +owever the !otentialres!onse is very dierent , internet integrates into a single screentraditional advertising catalog'es sho! dis!lays6windows and!hysical sho!!ing. 7ltimately lang'age of the advertisement

determines whether advertisement is constr'ed as invitation totreat or 'nilateral contract.K.5. 4otential range of liability co'ld mae 'dges rel'ctant toconcl'de online advertisements are oers. *ol'tion of im!lying aterm into an advertisement that oer is while stocs last is reectedby 3aah MC , bailing o't an #nternet merchant from a bad bargain, tho'gh it can be seen as giving eect to the intention of !artiesas co'ld not intend to sell a limitless n'mber of goods tho'gh insome cases (s'!!ly of information) this s'!!ly is !otentiallylimitless. *ol'tion to !lace on's on seller to insert a!!ro!riate!rotective cla'se to shield self from h'ge e;!os're to liability , hasboth the means to do so and nowledge relating to the availabilityof any !rod'ct that is being mareted

Timeta(%es and )ending *achines

0enton v @reat Korthern 3ailway=acts? Claimant arrives e;!ecting train advertised in timetable traindoes not arrive claimant s'es for breach of contract+eld? advertised times are oers

8ilie v >ondon 4assenger Trans!ort 5oard? 0enton e:'ivalent forb'ses

!uctions

8ith 3eserve? 'ctioneer invites bids for sale (invitation tonegotiate) oer is made by member of !'blic that !laces a bidacce!tance not immediate , a'ctioneer ass for f'rther bidswitho't which bid is acce!ted on the fall of the hammer (5ritish Car'ctions v 8right)K.5. #t has been arg'ed that an a'ctioneer cannot withdraw a lot

once the reserve !rice has been reached (similar to a'ction witho'treserve) 'nless owner has reserved right to bid for the lot in:'estion

8itho't 3eserve? a'ction is g'aranteed to tae !lace nominim'm !rice will go to the highest bidder (a'ctioneer maes anoer to sell the goods oer is acce!ted by the !erson who maesthe highest bid at the a'ction)

8arlow v +arrison

=acts? 'ction of a horse witho't reserve a'ctioneer allows owner ofhorse to bid on it claimant ref'sed to bid anymore '!on /nding o't


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, claimant asserts he shld be able to b'y at lowest bid , bona /de!'rchaser+eld? if a'ction is w6o reserve neither a'ctioneer or seller can bidon goods , a'ctioneer maes an oer to sell the goods oer isacce!ted by the !erson maing the highest bid - sold to highest

bona /de !'rchaser irres!ective of the !rice

5arry v 0avies=acts? 'ctioneer withdrew two engine analysers from an a'ctionwitho't reserve beca'se he considered the bids were too lowengines were sold to an third !arty. Claimant bro'ght an actionagainst a'ctioneer for breach of contract.+eld? C held that there was a collateral agreement that thea'ctioneer wo'ld sell to the highest bidder (whether or not this isthe maret val'e) , a'ctioneer liable to !ay damages to the highestbidder amo'nting to the dierence between the highest bid and themaret !rice4rinci!le? at a'ction w6o reserve a'ctioneer is bo'nd to sell tohighest bidderK.5. Consideration? 0etriment to the bidder since his bad can beacce!ted 'nless and 'ntil it is withdrawn and bene/t to thea'ctioneer as bidding is driven '! also attendance t the sale isliely to be increased if it is nown there is no reserve

Tenders

#nvitation to tender (!lease send 's yo'r bid) is an invitation totreat6negotiate not an oer (*!encer v +arding)

POnly common law regarding tenders is disc'ssed b't stat'tes havearised to reg'late the tendering !rocess !artic'larly in the conte;tof !'blic bodies , e.g. s"(1) of the >ocal @overnment ct 1DDD

P#m!lications for both !arties i.e. bidder cannot withdraw bid aftercontract has been formed (The L'een in 3ight of Ontario v 3onNngineering F Constr'ction Nastern >td)

+arvela v 3oyal Tr'st of Canada=acts? 0efendant invited +arvela and a "rd!arty to mae oer for!'rchase of shares and 'ndertoo to acce!t the highest oer.4lainti oered I21QEJJJ while "rd !arty oered I21JJJJJ orI1J1JJJ in e;cess of any other oer. 0efendant acce!ted "rd

!artyAs bid. 4lainti so'ght in'nction.+eld? +> held that "rd!artyAs bid was a referential bid and not avalid oer. #nvitation had created a /;ed bidding sale (namehighest !rice). (PPother iss'es with referential bidding sale N.g.more than one referential bid)

3TCAs letter wld have been invitation to treat b't letter incl'dedsentence we bind o'rselves to acce!t highest bid , transformed


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letter into 'nilateral oer acce!ted by s'bmission of highest validbid4rinci!le? invitation to s'bmit tenders may amo'nt to an oer whereit is clear that seller intends to sell to highest bidder

5lac!ool and =ylde ero Cl'b >td v 5lac!ool 5oro'gh Co'ncil=acts? !!ellant co'ncil invited tenders for a concession to o!erate!leas're Gights form local air!ort. #nvitation stated that co'ncil didnot bind themselves to bind all or any !art of any tender and thattenders received late wo'ld not be considered. tender wasdelivered on time b't was not checed 'ntil after the deadline.nother bid had already been acce!ted by then. C held that theco'ncil was contract'ally obliged to consider the cl'bAs tender andwas liable for damages on breach of that obligation.+eld? Co'ncil e;cl'ding a d'ty to acce!t any tender was held to beins'td v 5oro'gh Co'ncil of 4ort Talbot)K.5.2. 0oes not incl'de d'ty to act 'dicially. Ko need for tenderedto give hearing to bidders. (4ratt Contractors >td v Transit KR)

Oers m'st be comm'nicated to the other !arty7nilateral oers m'st be comm'nicated to world at large

Oer , commitment to be bo'nd not invitation to treatKeed to be acce!ted=inal and 'n:'ali/ed e;!ression of consent to be bo'nd , de/nite

introduction and offers

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