Lecture 4 - Agreement (Offer & Termination of Offer)_2

7/28/2019 Lecture 4 - Agreement (Offer & Termination of Offer)_2

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Lecture 4

AGREEMENT

Termination of Offer

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Formation of a Contract

OfferOffer

promise to be bound onspecific terms.

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Formation of a Contract(OFFER)

Certainty of OfferCertainty of OfferAn apparent vague offer:

The facts: the offeror offered to pay a further sum for ahorse if it was lucky.

Decision: the offer was too vague and no contract couldbe formed by a puported (claimed)acceptance.

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Certainty of OfferCertainty of OfferAdefinite offer may be made to a class of persons or to the

world at large

Carlill v Carbolic Smoke ball Co 1893The facts: the manufacturers of a patent medicine published an advertisement by

which they undertook to pay 100 rewardto any person whocontractsinfluenzaafter having used the smoke ball three times dailyfor two weeks. The advertisement added that 1,000 had beendeposited at a bank showing our sincerity in this matter. The claimant(plaintiff / applicant) read the advertisement, purchased the smoke balland used it as directed. She contract influenza and claimed her 100reward.

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Certainty of OfferCertainty of OfferCarlill v Carbolic Smoke ball Co 1893 (Contd)The manufacturers argued a number of defences, including the following:

a e o er was so vague cou no orm e as s o a con rac as no melimit was specified

(b) It was not an offer which could be accepted since it was offered to the wholeworld.

Decision: the court considered these two defences as follows:

(a) The smoke ball must protect must protect the user during the period of use.The offer was not vague

(b) An offer to the public can accepted so as to form a contract.

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Supply of InformationSupply of Information

Supply of information

to be an offer.Case Example:

Harvey v Facey 1893

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Supply of InformationSupply of Information

If, in the course ofnegotiations (discussionsby two parties) for a sale, the vendor states

,statement may be an offer which canbecome accepted eventually.

Case Example:

Bigg v Boyd Gibbons 1971

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InvitationInvitation to Treatto Treat

An invitation to treat is an indication

receive offers (i.e. one partyinvites the other to make an offer)

with the view to forming a bindingcontract. It is not an offer in

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There are four typesfour typesof invitations to treat:

1.1. AuctionsAuctions22.. AdvertisementsAdvertisements

3. Exhibition of goods for3. Exhibition of goods for salesale

Invitation to TreatInvitation to Treat

4.4. TENDERSTENDERS

Case Example for advertisements:

Patridge v Crittenden 1968

Case Example for Exhibition of goods for sale:

Fisher v Bell 1961

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TERMINATION OF OFFERTERMINATION OF OFFERAn offer is terminated so that it may no

following circumstances.

a. Rejection

b. Lapse of time

c. Revocation by the offeror

d. Failure of a condition

e. Death of one of the parties

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Formation of a Contract(Termination of Offer)

a. Rejectiona. RejectionAn outright rejection can cancel anoffer also a counter-offer (a proposal

to substitute the earlier offer)terminates the original offer made.

Case Example:Hyde v Wrench 1840

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Formation of a Contract(Termination of Offer)

b. Lapse of Timeb. Lapse of TimeAn offer may be expressed to last for acertain period of time but if there is

no express time limit set, it expiresafter a reasonable time. What is areasonable time depends on the

circumstances of the case.

Case Example:

Ramsgate Victoria Hotel Company v Montefiore 186613


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(Termination of Offer)

c. Revocation by thec. Revocation by the offerorofferorAn offeror can withdraw his offer at

.revocation must be communicatedto the offeree.

Case Example:

Routledge v Grant 1828

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c. Revocation by thec. Revocation by the offerorofferor (contd)(contd)

The offeror cannotcannotjust change his mind.

by post is not complete until the letter isreceived by the offeree.

Case Example:

Bryne v Leon Van Tienhoven 1880

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While acceptance must be communicatedmust be communicated,

communicated by any third party who isa sufficiently reliable informant.

Case Example:

Dickinson v Dodds 1876

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Where an offer is meant to be accepted,

has been held that it cannot be revokedonce the offeree has begun to try and

perform whatever act is necessary.Case Example:

Errington v Errington 1953

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d. Failure of a Conditiond. Failure of a Condition

An offer which is expressly or impliedly madesubject to some condition cannot be accepted

. ,

buy goods is subject to an implied conditionthat they will not deteriorate before the offeris accepted.

Case Example:

Financings Ltd v Stimson 1962

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e. Termination by deathe. Termination by death

he death of the offeree terminates

the offer.

The offerors death terminates the offer unless the

offeree accepts it in ignorance of the offerors death,and the offer is not of a personal nature.

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e. Termination by deathe. Termination by deathFor example, A promises to sell her video recorder to B,

then dies soon after, and B writes to accept the offer

not knowing that A is dead, it seems that the peopleresponsible for As affairs after death would beobliged to sell the video recorder to B and B wouldobliged to pay the price to the executors (i.e. the

people responsible for As affairs).

However, where an offer requires personal performance by theofferor (such as painting a picture, or appearing in a film) it will

usually lapse on the offerors death. 21

Lecture 4 - Agreement (Offer & Termination of Offer)_2

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