WEEK 1 - offers and acceptance - offers ( termination of an offer )

Lapse - death of a party - death of the offeree?

death of the offeree will cause the offer to lapse and so that the offer cannot be accepted after the offeree's death by the offeree's representatives.

Revocation - revocation of a unilateral offer exception to this general rule - why? case 1 for this - facts and held case 2 for this - what was established from this case - by whom and what was said

exception to this rule may apply where the offeree has partly performed the obligation and is willing and able to complete it would undoubtedly cause hardship to the offeree to allow the offeror to withdraw the offer in such circumstances. 1) Errington v Errington & Woods [1952] a father agreed to give his house to his son and daughter-in-law if they paid off the mortgage on the house. The couple had made several payments towards paying of the loan when the father sought to revoke the offer. The court held that the promise could NOT be revoked after the couple had started to pay the instalments and as long as they continued to be paid. Daulia v Four Mill Bank Nominees Ltd [1978] the court explained how such a conclusion could be reached conceptually Lord Justice Goff 'the true view of a unilateral contract must... be that the offeror is entitled to require full performance of the condition which he has imposed... subject to one important qualification, which stems from the fact that there must be an implied obligation on the part of the offeror not to prevent the condition becoming satisfied, which obligation it seems to me must arise as soon as the offeree starts to perform'.

Stevenson, Jacques & Co v McLean (1880)

Facts The defendant, Mclean, offered to sell iron to the claimant, Stevenson Jaques & Co. This was for the price of 40s and the offer would remain open until Monday. The complainant sent a telegram to the defendant, asking whether he would accept a payment of 40 over a two-month period, or what his longest limit would be for payment. McLean did not respond to this telegram. The defendant sold the iron to another party, but did not inform the complainant of this action. On Monday morning, the complaint sent a telegram to accept the offer, unware it had been sold. Issues The complainant sued the defendant for non-delivery of the iron and that this was a breach of contract. The issue in the case was whether there was binding contract between the parties and if the telegram sent by the complainant was an inquiry for information or a counter offer. Held The court heard the complainant was only inquiring for more information about whether the terms of the offer could be changed; there was no specific wording to indicate that it was a counter offer or rejection. This was in contrast to Hyde v Wrench. This meant that the offer made by the defendant was still valid and the second telegram by the complaint formed a binding contract. While the promise of the offer remaining open until Monday was not itself binding and an offeror can revoke this at any time, there had been no revocation communicated to the complainant in this case.

Revocation - revocation of a unilateral offer general rule and case

In relation to unilateral contracts, acceptance is perceived as the complete performance of the act(s) required by the terms of the unilateral offer. Consequently, it remains possible to revoke the offer at any time prior to the completion of the required act Great Northern Railway Company v Witham (1873

how will the courts approach if a unilateral offer to the world has been revoked?

It will be a question of fact in each case as to whether the offeror has taken all reasonable steps as required and whether the revocation has been given 'the same notoriety' as the original offer.

rejection - What is an attempt to accept an offer on new terms? what does this mean for the original offer? (and case for this)

MAY be a rejection of the offer accompanied by a counter-offer Where an offeree makes a counter-offer, the original offer is deemed to have been rejected and cannot be subsequently accepted Hyde v Wrench (1840) Where a counter-offer is accepted, its terms and not the terms of the original offer become the terms of the contract.

rejection - what does this MEAN? when does the rejection take EFFECT?

Once an offer is rejected, it cannot then be accepted (unless the offeror makes the same offer again) A rejection does not take effect until it is actually communicated to the offeror as only then will the offeror know that he is free from the offer.

What is the general rule about indirect communication of revocation? what is the danger arising from this rule?

Provided the offeror has shown, by words or conduct, a clear intention to revoke his offer and notice has reached the offeree, the revocation is effective. The means of communication do not matter, so the revocation will be effective EVEN if communicated by a third party Dickinson v Dodds 1876 DANGER - if the offeree receives notice of revocation from a third party, how does he know that the information from the third party is reliable?

what are the three ways an offer can come to an end?

Rejection Lapse Revocation In each case, the offer loses its legal effect and becomes incapable of acceptance.

Revocation- what is general rule? Case?

The offeror may withdraw (i.e. revoke) his offer at any time before acceptance Payne v Cave (1789) However, once a valid acceptance has been made, the offeror is bound by the terms of his offer. An offer cannot be revoked after acceptance.

revocation - what is the rule about communication? in terms of post, how does this apply? case?

Revocation of an offer is effective only upon actual notice of it reaching the offeree. Where revocation is communicated by post it takes effect from the moment it is RECEIVED by the offeree and not from the time of posting Byrne v Van Tienhoven 1880

Revocation - options what is this? what is the exception of this - case?

Where the offeror gives an undertaking to keep the offer open for a stipulated period, he is not bound by his undertaking exception - UNLESS the offeree has given consideration in return for it offeror is not bound to keep the offer open for the stipulated period unless the offeree gives something of value in return for the offeror's promise to keep the offer open for a period. If that is the case, then there is a separate binding contract known as an option and revocation within the period will be in breach of that contract Dickinson v Dodds (1876)

Lapse - non-fulfilment of a condition what is this? case?

Where the offeror makes his offer subject to the fulfilment of a condition, failure on the part of the offeree to fulfil the condition will prevent acceptance from taking place Financings Ltd v Stimson [1962] FACTS: A customer offered to take a motor car under a hire purchase agreement (the offer being made to a finance company). The car was stolen from the dealer's premises and damaged before the finance company accepted the customer's offer. There was a dispute as to whether the customer's offer was subject to an implied term that the car remained in the same condition up to the time of the acceptance of the offer. Held: the customer's offer was subject to such an implied term and the dealership had not fulfilled the condition - no contract

Lapse: what 3 situations may an offer be terminated by laps?

a) by passage of time; b) by the death of one of the parties; or c) by the non-fulfilment of a condition precedent.

Lapse - Passage of time: which 2 circumstances can this occur in?

a) where acceptance is not made within the period prescribed by the offeror; b) where no period is prescribed and acceptance is not made within a reasonable time. What is reasonable will depend on the circumstances of the case.

distinguishing a counter offer from request for further information? what is the case for this?

if an offeree responds seeking clarification of the extent and terms of the offer, or to ascertain if the offeror would consent to changing certain aspects of the offer, then the offeree's request may be construed as a request for further information. In this event, since there has been no counter-offer, the original offer remains open for acceptance. Stevenson, Jacques & Co. v McLean (1880)

Lapse - death of a party - death of the offeror?

if the offeree knows that the offeror has died, the offer will lapse; if the offeree is unaware of the offeror's death, it probably will not.

Communication of revocation in unilateral contracts made to the whole world what is a contract made to the whole world? what is the rule for communication in this circumstance? is there an english authority for this? If not, who?

unilateral offer can be made to the 'whole world' and that there is no requirement that those embarking on performance should communicate their intention to accept to the offeror: Carlill v Carbolic Smoke Ball Co (1893). In such circumstances, communication of revocation is almost impossible and it seems likely that revocation will be effective if the offeror takes reasonable steps to bring the revocation to the attention of all those who may have read the offer There is no English authority on this point but some support for this proposition can be derived from an American authority Shuey v United States (1875)

What are the difficulties with rejection and counter-offer? What happens in this circumstance?

when an offer is made on the standard terms of the offeror and the purported acceptance is made on the standard terms of the offeree. If these terms are different in any way, the offeree has in fact made a counter-offer. It is sometimes said that the person who fires the last shot wins the battle, in the sense that the person who last asserts that their own terms and conditions should apply is likely to prevail (although if each side simply continues to assert that its own terms and conditions prevail, and the parties do not move past this, then no contract will be formed).