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25 Cards in this Set

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AGREEMENT and PROMISE

  • offer, invitation to treat, intention to make an offer
  • Whether an agreement has been made
  • when the agreement was made
  • where the agreement was made
  • The agreement is made when and where the acceptance is communicated
  • The offeror has made an offer to contract on certain terms to another, the offeree, who has accepted and communicated his acceptance to the offeror.
  • Bilateral: offer, acceptance, communicated; exchange a promise for a promise
  • Unilateral: form of promise in return for some act/condition performed by offeree; acceptance + consideration from promisee is the performance of the act/condition specified by the offeror

OFFER and ACCEPTANCE


Agreement and Promise


offer, invitation to treat, intention to make an offer

  • Carlill v Carbolic Smoke Ball [1893] if you don't know it...
  • Clarke v Dunraven (1897) yacht club, entrants separate agreement with the club, implied contract between them, conduct and correspondence implied contract as O&A unclear
  • Thornton v Shoe Lane Parking (1971) parking auto-ticket, notice not up front; ticket is offer not invitation
  • Upton RDC v Powell (1942) farm outside for fire service zone, implied promise to pay for service
  • Bowerman v Association of BTA (1995) "ABTA arranges re-imbursement", satisfaction of Carlill criterion, unilateral offer to contract
  • O'Brien v MGN Ltd (2002) fairly and reasonably brought rules to notice of claimant, scratchcard lottery, notice in newspaper, rules in newspaper, 1 prize only)

OFFER and ACCEPTANCE


invitation to treat, offers in advertisement, displays in a shop

  • Denton v GNR (1856) advert offer; C treated railway timetable as offer, told train doesn't exist, missed meeting, incurring loss; there was contract and breach; if person doing what they are encouraged to do by another party then it is sufficient exchange of value
  • Grainger & Son v Gough (1896) catalogues + promotional material issued by company were invite to treat, lacked sufficient details/terms to be offer
  • Partridge v Crittenden (1968) illegal sale of birds in classifieds, invite to treat not offer to sell, criminal conviction quashed
  • Fisher v Bell (1961) illegal knife display in shop window with price tag; invite to treat not offer to sell, criminal conviction quashed
  • Pharmaceutical Society of GB v Boots Cash Chemists (1953) new store style at time, customer collects item off shelf, brings it to cash to pay, but law requires presence of pharmacist to sell, so society action to determine legality; goods on shelf invite to treat, sale of pharma goods and contract concluded at cashier in presence of pharmacist
  • Lasky v Economy Grocery Stores (1946) (US) display of goods on shelf with price is an offer BUT offer not accepted and communication of acceptance does not happen UNTIL buyer pays for it at cashier

OFFER and ACCEPTANCE


auction sales

  • Sale of Goods Act 1979 s.57(2): BIDDERS IN AUCTION MAKE THE OFFER TO BUY; AUCTIONEER SIGNIFIES ACCEPTANCE BY FALL OF HAMMER (reality + theory)
  • Warlow v Harrison (1859) advertised horse auction without reserve, not true as owner of horses was there bidding on his own goods creating reserve; D in breach of unilateral offer, but hammer already put down, can only sue for loss of opportunity to buy the horse
  • Harris v Nickerson (1873) merely advertising that an auction is to take place is NOT an offer; AUCTION WITHOUT RESERVE is definite statement, HOLDING AN AUCTION is not a definite statement of offer
  • Barry v Heathcote Ball (2001) auction took place without reserve, unilateral offer accepted by submitting highest bid; C submitted £200 bids each on 2 machines worth £14,000 each, auctioneer tried to withdraw but no reserve, C entitled to damages of £27,600
  • British Car Auctions v Wright (1972) auctioneer performing normal function does NOT offer to sell; car was illegal for road use per statute, conviction quashed, auctioneer had not offered to sell but invited to treat/invited offers that would be accepted by hammer fall

OFFER and ACCEPTANCE


offers and requests for information, conditional offers (precedent, subsequent), counter-offers

  • Harvey v Facey (1893) ask Bumper Hall Pen sale, answer lowest price £900, agreed for £900, Facey refused; 1st telegram a question/request for info to which lowest price £900 is the answer, no offer
  • Stephenson, Jacques & Co v McLean (1880) offer to sell iron by telegram, P responded with request for info to alter terms (not a counter-offer), D took as rejection, sold to another; P accepted initial offer, D had to pay damages
  • Winn v Bull (1877) D agree with P to take lease of house "subject to preparation + approval of formal contract"; words were held to prevent document from being final agreement
  • Smith v Butler (1900) contract for sale of land conditional on mortgagee consenting to transfer of loan to plaintiff, defendant had to wait until time fixed for completion before withdrawing
  • Mackay v Dick (1881) term will be read into contract as matter of law to prevent one party frustrating performance of an obligation by the other party where it was dependent on action being taken or not by first party (sale of steam shovel on condition of shovel achieving rate of excavation in circumstances)
  • C Czarnikow Ltd v Rolimpex (1978) C deals with sugar, D was exporter; contract D to deliver Polish sugar to C; contract required D to get license from Polish government which D did BUT later Polish government withdrew license; C sued D for non-delivery and breach; HoL = out of D's control, no breach and contract cannot infer/assure condition of D getting + keeping license when situation outside control

OFFER and ACCEPTANCE


termination of offer, express revocation, counter-offer, subsitute offer, effluxion of time, death of offeror/offeree, option

  • Byrne v Van Tienhoven (1880) offeror sent letter to sell steel, offeree accepted with letter but before acceptance received offeror sent revocation; revocation not in time contract upheld, postal acceptance rule, there is acceptance and contract where/when acceptance mailed
  • Dickinson v Dodds (1876) offer to sell property; offeree took time to consider until deadline, 3rd party notified offeree of sale, offeree attempted to buy but was told too late...no breach 3rd party notice of withdrawal valid; promise to keep an offer open (option) is itself a contract that must have consideration
  • Hyde v Wrench (1840) offer to sell land £1000 declined, another letter same offer final, counter-offer for £950 declined; Hyde attempt to buy original offer, Wrench refused; counter-offer of £950 by Hyde revokes original offer
  • Pickfords Ltd v Celestica Ltd (2003) offer lapses if offeror makes 2nd offer as substitution on assumption that 1st offer has not yet been accepted; 2 offers made, second higher but court decided first had been accepted
  • Ramsgate Victoria Hotel v Montefiore (1866) offer lapses at of time specified or after reasonable time given nature of offer; can waive need for compliance with time; D offered to buy shares, C accepted 6 months later, D refused; shares fluctuate in price, timeframe of 6 months not reasonable
  • Bradbury v Morgan (1862) Dad wrote letter for son to use overdraft, dad died; bankers allowed sone to keep overdraft; dad's execs/estate liable after his death; offeror's personal reps may still be bound provided that: contract does not involve personal services of the deceased AND offeree is ignorant of offeror's death;
  • Reynolds v Atherton (1921) offer cannot be accepted by execs, meant for deceased only

ACCEPTANCE


communication, waiver of communication, acceptance by conduct, communication through an agent

  • Felthouse v Bindley (1862) uncle wanted to buy horse from nephew sent letter "if I hear no more about him" but horse accidentally sold at auction, uncle attempt to sue auctioneer but no proof of acceptance: silence not acceptable; cannot impose obligation on another to reject one's offer; offeror cannot waive need for communicating acceptance
  • Taylor v Allen (1966) insurance companies, 30 day expiry of policy letter to decide upon renewal and acceptance was done by paying; D had 30 day letter, insurance expired, evidence showed he was not going to renew, no proof of acceptance;
  • Allied Marine Transport v Vale de Rio (1985) mere silence and inactivity by the parties to an arbitration will not in absence of special circumstances be sufficient to infer agreement to abandon arbitration
  • Re Selectmove Ltd (1995) tax collection issue; offeree himself indicates offer is to be taken as accepted if he does not indicate otherwise in reasonable time he is undertaking to speak if he does NOT want an agreement to be concluded; EXCEPTION
  • Brogden v Metropolitan Railway (1877) Brogden suggested contract; draft prepared, sent to Brogden who completed and returned to railway, railway did not acknowledge it; railway placed order, Brogden filled orders...then Brogden said no more, railway brought action, Brogden claimed since railway never acknowledged altered draft, which was counter-offer, no contract; accepted that Brogden's completion of draft was a counter-offer BUT parties had trade don term of contract, so conduct meant they had accepted counter-offer
  • Robophone Facilities v Blank (1966) sale of phone answer machine; salesman visited D and signed contract; would be effective when C signed and D filled out various forms, D changed mind next day, withdrew; CoA there is contract, arrival of rep was implied waiver of need to sign, indicating acceptance
  • Powell v Lee (1908) acceptance of offer must be communicated to offeror by offeree or authorized 3rd party; Powell applied for job, told he got it by unauthorized party, job given to someone else, sue for breach, no contract
  • UNSOLICITED GOODS ACT 1971: If X sends something to Y without the request of Y, then Y can treat it as a gift.

POSTAL ACCEPTANCE RULE


prescribed mode of acceptance

  • Adams v Lindsell (1818) Lindsell offers to sell wool to Adams "must be considered that offerors were making offer to plaintiff during every moment letter was in post"
  • Henthorn v Fraser (1892) postal acceptance occurs at moment letter is posted; valid so long as it is reasonable for offeror to expect acceptance by post (property purchase case, 14 days time limit)
  • Household Fire and Carriage v Grant (1879) even if acceptance letter is lost in mail, it is still valid and offeror is bound; Grant applied for shares by post, C accepted but lost in mail, C went bankrupt, Grant refused to pay up outstanding shares pmts since never got acceptance
  • Byrne v Van Tienhoven (1880) and Stevenson, Jacques & Co v McClean (1880) SEE OTHER NOTES / SLIDES
  • Holwell Securities Ltd v Hughes (1974) D to sell property, clause stating must be notice in writing within 6 months to exercise option; C sent letter exercising option, lost in mail; no contract: notice displaces postal rule, offeror reserved right to receive actual communication within time limit
  • Financings Ltd v Stimson (1962) purchase for hire car; D paid deposit, signed form, agreement binding on P only upon acceptance by signature on their behalf; D takes car, D returns car to dealer, forfeits deposit, revokes contract; car stolen, found damaged; agreement signed on behalf of P who sue for price of car less value on recovery; dealer authorized, accepted D's revocation, no contract; D's offer conditional (implied) upon car remaining in substantially same condition as when offer 1st made

OFFER and ACCEPTANCE


prescribed mode of acceptance, withdrawal of acceptance, simultaneous/instantaneous communication

  • Manchester Diocesan Council v Commercial & General Investments (1970) where offeror prescribes particular mode of acceptance but not in terms insisting that only acceptance in that mode shall be binding, acceptance communicated by any other mode which is no less advantageous to him will conclude contract; D's offer accepted notwithstanding it was not in accordance with prescribed mode
  • Tinn v Hoffman (1873) acceptance must correspond to offer; offer in one set of terms cannot be accepted by a communication in a different set of terms, ie counter-offer
  • RTS Flexible Systems v Molkerei Alois (2010) Molkerei buying machinery + installation from RTS, letter of intend and contract based on MF/1 terms; draft final contract produced never signed/exchanged, work began; terms were varied, dispute; matter of construction/facts, held there was a contract as parties behaved as such
  • Dunmore v Alexander (1830) acceptance letter and revocation letter arrived at same time, held no contract PAR can be revoked by speedier means...unconvincing case
  • Entores v Miles Far East (1955) DENNING; regular postal rule does not apply for instantaneous communication; CoA acceptance occurs where the message of acceptance is read, contract formed when and where acceptance telex is received "if a man shouts across a river..."
  • Brinkibon Ltd v Stahag (1983) HoL confirmed ENTORES; Wilberforce: not hard fast rule, may need to refer to intention of parties, judgment of where risk should lie and business practices; in this case, telex outside of office hours, not considered instantaneous, acceptance only effective when office re-opened
  • The Brimnes (1975) communication of withdrawal of an offer by telex is effective when it could be read, not when in fact read

Unilateral Contract

  • Made in the form of a promise in return for some act or condition to be performed by the offeree.
  • Can the offeror revoke his offer when an offeree has begun performance?
  • And must revocation be direct and actual to offeree or can it be through 3rd party or publicity?
  • Can the offeree claim benefit of the offeror's offer if at time of performance, offeree was unaware of the offer? (Can you accept an offer that you are unaware of?)

Unilateral Contract

  • Carlill v Carbolic Smoke Ball [1893] you should know it
  • UDT (Commercial) Ltd v Eagle Aircraft Services Ltd [1968] DIPLOCK “ a unilateral contract of itself never gives rise to any obligation upon the promise to do or refrain from doing anything”; aircraft manufacturer was obliged under contract to buy back an aircraft from a hire purchase company under 3 conditions...In order to be turned into a binding contract, the offer must be accepted in exact compliance with its terms. The acceptance must correspond with the offer...conditions for this obligation are not fulfilled here...I will do or refrain from doing X IF you will do or refrain from doing Y.

Unilateral Contract


Does the offeree have to know of the offer before he satisfies the condition laid down by the offeror?


  • Gibbons v Proctor (1891) police officer supplied information for which reward had been offered that he did not know about; officer was entitled to claim reward as he did eventually have full knowledge of the offer and therefore could accept
  • Fitch v Snedaker (1868) D offered reward for finding and returning his dog; C did so without knowing about reward, could not claim; can't accept an offer you are ignorant of

Unilateral Contract


Is the motive of the offeree in performing the condition relevant?

  • Williams v Carwardine (1833) Carwardine murdered; C gave some info but not everything she knew, suspects acquitted, 2nd trial ordered; D, victim's brother offered reward for more info; after 1st trial, C's husband beat her viciously; at 2nd trial, C gave enough info to convict her husband his partner; C claimed reward, was denied, went to court; motive for giving info not relevant, she gave info because she was beat, but she knew about offer

  • R v Clarke (1927) 2 policemen murdered, Clarke suspect gave info to save himself, tried to claim reward for giving info about murderers; court held can't claim, did not give the info as acceptance of offer of reward, gave info to save himself / One cannot accept an offer one doesn't know exists, or that one has forgotten exists / One needs an expectation or reliance interest in the reward in order for that reward to be recoverable.

Unitaleral Contract


Can the offeror revoke the offer after the offeree has begun performance of the condition? (The Walk to York problem).

  • Luxor v Cooper (1941) real estate agents trying to claim commission for sale of property they were ultimately not used for; claim denied, property owner can do what he wants with property, real estate agents potential of big payout commission is worth the risk of no payment
  • Offord v Davies (1862) Either party may change their mind and withdraw from negotiations before a contract is formed in bilateral contract; in this case, offer could be withdrawn within thespecified period unless it had been acted upon (securing moneys to 3rd party in 12 month timespan)
  • Errington v Errington (1952) father bought house for son and daughter-in-law, house in his name alone; father gave deposit an told couple to pay mortgage pmts then he would give them the house; died before this happened, mother inherited property, tried to kick wife out; DENNING, unilateral contract that daughter-in-law + son in process of performing/completing; with unilateral contracts acceptance takes place only on full performance. Lord Denning held that once performance had commenced the Mother was estopped from revoking the offer since it would be unconscionable for her to do so.
  • Daulia Ltd v Four Millbank Ltd (1978) C wished to buy property from D, agreed terms but no written contract; D promised C that if C arranged for bankers draft to be given to D before deadline, written contract would be done; C did so but D refused to complete. held that unilateral contract did exist which C accepted with performance but contract not held up due to statute and no act of part performance could lead to binding contract GOFF OBITER 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; Until then the offeror can revoke the whole thing, but once the offeree has embarked on performance it is too late for the offeror to revoke his offer."starts to perform

Unilateral Contract


If the offeror can revoke the offer, does he have to give express notice of revocation to the offeree?

  • Shuey v United States (1875) $25,000 reward in newspaper for Lincoln's assassin accomplice, then by newspaper offer withdrawn; C was still paid $10,000 for small assistance he provided, tried to claim remainder, held no since offer withdrawn by same method it had been announced and C should have realized this

The Battle of the Forms

Two parties fighting for common K. Each equipped with own set of terms. Parties trying to get K with their own terms. English law wants to find a clear agreement. Courts apply orthodox offer and acceptance reasoning.

The Battle of the Forms

  • Butler Machine Tool Ltd v Ex-Cell-O Corporation (1979) C thought D had signed their terms which included price variation clause and attempted to enforce this clause only to find that they had signed D's terms and not read them, so no price variation clause; Where there is a battle of the forms whereby each party submits their own terms the last shot rule applies whereby a contract is concluded on the terms submitted by the party who is the last to communicate those terms before performance of the contract commences.
  • Tekdata Intercommunications v Ampenol Ltd (2009) The court considered which of two sets of contractual terms applied. The parties had dealt with each other over a long period. Under standard offer and acceptance the seller’s terms would apply. The buyer appealed, saying the court should look to the history of relations between the firms. traditional approach held up, nothing passing between the parties and their conduct indicated they were going by any other set of terms

TENDERS

  • Spencer v Harding (1870) D sent out circular inviting tenders, C ended up submitting highest bid, D refused to give C, C sued; held circular was invitation for tenders, invitation to treat, not an offer
  • GNR v Witham (1873) C railway invited tenders; C accepted D's tender, they traded for a bit but then did not and when C ordered again, D refused; sufficient consideration for the defendant's promise to supply the goods, although there was no binding contract on the part of the company to order any.There was no obligation for the claimants to order any materials, however upon their ordering, the defendant was obliged to deliver as per his tender
  • Percival v LCC Asylum Committee (1918) P submitted tender, accepted, but D did not place orders, P tried to sue; acceptance of a non specific tender didn't constitute a contract therefore LCC not obliged to order goods.
  • Blackpool & Fylde Aero Club v Blackpool Borough Council (1990) D missed C's tender which was properly submitted, C sued; Court of Appeal found invitation was an offer to consider any tender which was submitted as required and tenders correctly submitted would be acceptance of that offerthere was a unilateral contract, binding D to consider C's tender; tenders and requests for tenders are accompanied by a collateral contract implying that the requestor will inspect the bid.

Intention to Create Legal Relations

blurp

Express terms

  • Rose & Frank v JR Crompton (1925) contract contained honourable pledge clause which stated the agreement was not a formal or legal agreement and shall not be subject to the jurisdiction of the courts; D terminated early; the honourable pledge clause rebuts presumption of parties intending to be legally bound
  • Heilbut Symons v Buckleton (1913) general principle that representations (innocent, misreps, etc) become part of the contract if (as a very general principle) this is "intended". Later, in another case, the Court of Appeal further clarified that the balance of information between a buyer and seller is relevant to determine what was actually intended, giving preference for the intentions of non-commercial parties who rely on others.
  • "Ex gratia" payments
  • Edwards v Skyways Ltd (1964) pilot made redundant, D said would pay him equivalent ex gratia if he withdrew from pension fund; C relied upon promise, business environment meant intensions to create legal relations, there was a meeting of the minds

Domestic Arrangements

  • Balfour v Balfour (1919) husband promised to pay wife while abroad in Ceylon, they separated, he withdrew promise; between husband and wife, not contract, no legal relations; Arrangements made between husbands and wives are not generally contracts as the parties do not intend to be legally bound by the agreements.
  • Merritt v Merritt (1970) separated couple, mortgage payments; Where spouses have separated it is generally considered that they do intend to be bound by their agreements. The written agreement signed was further evidence of an intention to be bound.
  • Spellman v Spellman (1961) tried to fix marriage with car for hire purchase that husband put in wife's name; no intention to create legal intentions between them, husband could not make gift of hire for purchase car as it was not his to give
  • Jones v. Padavatton [1969] mother promised to pay + give house to daughter if daughter gave up US job and moved to London to study bar; plan failed, daughter married and left studies, mother sought to get possession of house; could not claim, no legal relations between parent and child
  • Simpkins v. Pays [1955] D, her granddaughter, and lodger, lottery ticket; mutual agreement was joint enterprise, and presence of the outsider rebutted the presumption that it was a family agreement and not intended to be binding.

“Agreements to agree”, “agreements to negotiate” and similar devices; Letters of Intent and Letters of Comfort

  • Walford v Miles (1992) Unanimously held that a bare agreement to negotiate has no legal content; An agreement whereby one party for consideration agrees for a specified period of time not to negotiate with anyone else in relation to a sale of property can be enforceable but an agreement that is open-ended in terms of time is not enforceable; lockout agreement whereby the defendants had allegedly agreed not to deal with any third party with regard to the sale of their business for as long as they were negotiating with the plaintiffs.
  • Pitt v PHH Asset Management (1993) vendor and purchaser made a 'lock out agreement'. That was a contract binding on both. The vendor broke it. He was liable to the prospective purchaser for damages to be assessed; D had tried to withdraw from selling to Pitt AFTER they had accepted his bid "subject to contract" and upon getting higher bid from another; D had tried to placate Pitt and then go around back to sell to other with higher bid
  • Letters of Intent and Letters of Comfort
  • Kleinwort Benson Ltd. v. Malaysian Mining Corp. [1989] "Comfort letters" in which one company assumes a moral but not a legal obligation to help another have no contractual effect. fact that MMC BHD had refused to act as guarantor demonstrated they did not intend to be legally bound. The comfort letter referred to company policy at that time. There was nothing to stop the company changing its policy.

PRIVITY

  • Tweddle v. Atkinson (1861) father of the bride entered an agreement with the father of the groom that they would each pay the couple a sum of money. both fathers died, son unable to sue to enforce their agreement.

  • Dunlop v Selfridge (1915) tire sale; Only parties to a contract can sue for a breach of the contract.The only exception to this rule is if a party named in the contract was acting as an agent of an unnamed party; in this case, the unnamed party can be sued.

PRIVITY

  • Trident General Insurance Co. Ltd. v. McNiece Bros. Proprietary Ltd. (1988) AUSTRALIA...At least in relation to insurance policies, and almost certainly in relation to contract of indemnity generally, where the evidence is that third parties were in the contemplation of the principal, then those third parties can enforce the contract.

  • The Mahkutai (1996) function of a Himalaya clause was 'to prevent cargo owners from avoiding the effect of contractual defences available to the carrier by suing in tort persons who perform the contractual services on the carrier's behalf. To make available to such a person the benefit of an exclusive jurisdiction clause in the bill of lading contract does not contribute to the solution of that problem.'the purpose of a jurisdiction clause is usually to confer jurisdiction on a court in the place where the carrier carries on business. It is purely fortuitous if that court is also a convenient place for a subcontractor to litigate. so himalaya did not apply in this case

  • Contracts (Rights of Third Parties) Act 1999

  • Nisshin Shipping Co. Ltd. v. Cleaves & Co. Ltd. [2003] testing interpretation of the act...held that if contract is neutral on the question of whether the term was intended to be enforceable by the third party, then s.1(2) does not disapply s.1(1)(b).

PRIVITY


action by promisee

  • Beswick v. Beswick [1966] Beswick agreed to sell business to nephew if nephew paid widow/aunt £5 per week for rest of life after uncle died; nephew paid once then stopped; she was unable to claim as not party to contract BUT she was administratrix of estate and could claim as such
  • Lloyd's v. Harper (1880)
  • Jackson v. Horizon Holidays (1975) Jackson able to claim not just for himself but for his wife and children's disappointment at crap holiday; exception to the rule; part of reasoning is that his family's distress is part of his distress
  • Linden Gardens Trust Ltd. v. Lenesta Sludge Disposals Ltd. AND JOINT WITH St. Martins Property Corp. Ltd. v. Sir Robert McAlpine & Sons Ltd. [1993] whereby goods expected to be passed through several hands might give a right to the third parties to sue the original seller for defects.
  • Darlington BC v. Wiltshier Northern Ltd. [1995] since both parties were aware that the building contracts were entered into for the benefit of P and it was foreseeable that damage caused by a breach of the contracts would cause loss to P, P, as assignee, could claim substantial damages for loss caused by W's breaches of the contracts, and damages to be assessed in normal way as if P had been party to contract