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Chapter 3 Agreement: Offer and Acceptance

Chapter 3 Agreement: Offer and Acceptance. Introduction. Offer and Acceptance and Consideration and No Lack of Intention = Contract (generally) Distinguish Bi-Lateral from Unilateral (will return to latter). Offers. Clark definition Be really sure that something is an “offer”

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Chapter 3 Agreement: Offer and Acceptance

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  1. Chapter 3 Agreement: Offer and Acceptance

  2. Introduction • Offer and Acceptance and Consideration and No Lack of Intention = Contract (generally) • Distinguish Bi-Lateral from Unilateral (will return to latter)

  3. Offers • Clark definition • Be really sure that something is an “offer” • Gibson v Manchester City Council (1979) • Storer v Manchester City Council (1974) • Harvey v Facey (1893)

  4. Offers and Invitations to Treat • Rationale for distinction (p.10) • Minister for Industry and Commerce v Pim (1966) • Pharmaceutical Society v Boots Cash Chemist (1953) • Partridge v Crittenden (1968) • Exceptions • Lefkowitz v Great Minneapolis Surplus Store (1957) • Carlill v Carbolic Smoke Ball Co Ltd (1893)

  5. Mere Puffs • Carlill • Dimmock v Hallet (1866) • Leonard v PepsiCo (1999) • The Need to Communicate an Authorised Offer • Taylor v Laird (1856) • Wilson v Belfast Corporation (1921)

  6. When an Offer Ends • Passage of Time • The Principle • Dooley v Egan (1991) • Commane v Walsh (1983) • Examples • Ramsgate Victoria Hotel Co v Montefiore (1866) • Commane v Walsh

  7. Revocation • Revoked at any time until acceptance even if promise to keep open • Walker v Glass (1979) • Need to Communicate Revocation • Dickinson v Dodds (1876) • Dodds offers to sell house to Dickinson; offer open until Friday, 12 June at 9am • On Thursday, Dickinson told by third party that Dodds had sold it to someone else – Dickinson then tried to accept the offer made to him • Dodds rejected • Court of Appeal held that since Dickinson had notice of the sale to the third party, the offer was “incapable of acceptance” • Postal Rule Has No Application – Byrne v Van Tienhoven (1880) • Death • Re Whelan (1897) • Dickinson v Dodds • Earle v Angell (1892) • Re Irvine (1928)

  8. Rejection • Rejection Per Se • Rejection by Counter Offer • Hyde v Wrench (1840) • Stevenson v McLean (1880) • Pars Technology v City Link Transport Holdings (1999)

  9. Acceptance • Mirror Image Rule (p.17) • Communication of Acceptance • General Rule • Entores v Miles Far East Corporation (1955) • Inferred By Conduct • Brogden v Metropolitan Railway (1877) • The Postal Rule • Adams v Lindsell (1818) • Kelly v Cruise Catering (1994) • Holwell Securities v Hughes (1974) • British and America Telegraph v Colson (1871)

  10. Electronic Communication of Acceptance • Re-state the General Rule • How does it apply to Telex? • Entores v Miles Far East Corporation (1955) (acceptance telexed from Amsterdam to London) • What happens if there are problems at the receivers end? • What is the real concept of “receipt”? • Entores v Miles Far East Corporation • The Brimnes (1975) • Overall evaluation? • Brinkibon Ltd v Stahag Stahl (1982)

  11. Relevance of E-Commerce Act, 2000 etc?

  12. Modes of Acceptance • Waiving the Need For Communication • Carlill v Carbolic Smoke Ball Co (1893) • Can Waive, but Can’t Impose Silence • Felthouse v Bindley (1862) • Prescribing Modes of Acceptance • Tinn v Hoffman (1873) • Staunton v Minister for Health (1986) • Yates Builders v JR Pulleyn (1975)

  13. Bi-Lateral and Unilateral Contracts • Concepts – p.23 • Rule 1: Acceptance is Performance • Billings v Arnotts (1945) • Tansey v College of Occupational Therapists (1995) • Kennedy v London Express Newspapers (1931)

  14. Rule 2: Revocation Cannot Occur Once Performance Begun • Daulia v Four Millbank Nominees (1978) • Errington v Errington (1952) • Luxor (Eastbourne) v Cooper (1941) • Implied Promise or Rule of Law Theory?m

  15. Offer and Acceptance in Particular Cases • Auctions • Harris v Nickerson (1873) • Tully v Irish Land Commission (1961) • Warlow v Harrison (1859)

  16. Tenders • Principles clear enough (not in Ireland!) • When one bids in a tender, one is “accepting” the offer held out the person inviting the tender that the tender process takes place in accordance with the express terms it is offer on • McDermott (p20) refers to this as “Contract A / Contract B” theory – Contract B is the contract for, say, the building of the ship. Contract A is the contract which arises governing the process. • In Canada and other jurisdictions it has also been held that implied terms may govern “Contract A”

  17. Tenders • Harvela Investments Ltd v Royal Trust Co of Canada (1986) • “If your offer is highest offer we bind ourselves to accept provided it complies with terms of this telex” • Bid was X or 100K more than any other fixed monetary bid • HL – noted that the telex was offer to accept highest bid made but held that it referred to fixed monetary amounts – it was said that this was an implied term (i.e. that the bids could only be non-referential – this is critical)

  18. Tenders III • Howberry Lane v Telecom Eireann (1999) • Very complicated case concerning sale of Cablelink. • Essentially, P wanted to stop 2nd and 3rd D’s from selling Cablelink to 1st D. • Prior to submitting a final bid, Esat entered into an agreement with two other companies, Charter and Vulcan, to form the plaintiff company and it made a bid of £410 million • The third named defendant (NTL) submitted a formula bid that it was willing to pay 15% more than the highest bid. • P gets upset and says 2nd and 3rd D’s cannot accept a referential bid (but there was nothing in the contract to say that) • Morris J rejected that he could imply anything into the contract • Also rejected implication of term to deal with “fair dealing” in circumstances where it was alleged that new round of bidding had been opened without reason (i.e. they had opened a new round saying, now formula bids would not be accepted)

  19. Smart Telecom v RTE (2006) • RTE were seeking sponsors for the weather forecast at €1.25m per year for a minimum of two years. • Decided to use sealed bids. • There were no express provisions saying referential bids were prohibited. • Kelly J noted that the point of the sealed bid system was, inter alia, to ensure “fairness and transparency” and to invite each party to “submit its best offer”. • Notes that, the terms of the tender anticipated that identical offers may be received and had provisions to deal with such (i.e. which would seem inconsistent with referential bids were acceptable). • Interpreting the document as a whole, Kelly J held that referential bids were not part of the presumed intention of the parties and, indeed, noted that this was entirely consistent with the methodology used in Harvela

  20. Judicial Approach to Offer and Acceptance • Consider it if you wish • Battle of the Forms • Butler Machine Tool v Ex-Cell-O-Corp • Chicester Joinery v Mowlam

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