Unit 2

Objective Notes: W300 – Agreements, rights & responsibilities
Distinguish offer & invitation to treat
Offer is expression of willingness to contract, possibly on certain terms, and
with intention to be bound immediately on acceptance by party to whom
offer is made;
Intention tested objectively – whether reasonable person would so conclude
rather than a party’s subjective intentions (Smith v Hughes);
Invitation to treat = willingness to enter into negotiations but not yet to be
bound (Harvey v Facey) – not an offer but preliminary statements inviting
Unilateral contract
Promise in return for an act where commitment is only on offeror’s part &
describable as ‘If’ contracts - offeror bound to perform if – only if –
person(s) to whom promise made carry out act stated (Carlill v Carbolic
Smoke Co);
Distinguishable from bilateral contracts - party A makes promise in return
for party B’s promise, offer & acceptance both = promises & both parties
immediately bound.
Terminating offers
A Revocation:
Offeror can withdraw at any time before acceptance – even in event of
promise to keep offer open (Routledge v Grant) but where offer has been
accepted, it is irrevocable;
Revocation must be communicated (Byrne & co v VanTienoven & co) but
communication may be by reliable 3rd party (Dickinson v Dodds).
B Rejection by offeree:
Acceptance must precisely meet offer terms & without this no contract;
Where response seeks to change terms, it’s counter offer which destroys
original & not acceptance (Hyde v Wrench);
Where offeree queries, say, method of payment, not implied rejection but
enquiry where reply will determine whether or not to accept (Stevenson
Jacques & Co v McLean).
C Lapse of time:
Offers may lapse through passage of time & where expressly so provided
effectively no offer to accept if late;
Otherwise offers lapse after reasonable time depending on how offer made
(Quenerduaine v Cole – offers by telegram impliedly required fast response);
& subject matter (e.g. perishable goods offers have short life).
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Objective Notes: W300 – Agreements, rights & responsibilities
D Death:
Where either party dies & other knows this, no consensus = no contract;
Where other party does not know, death of offeror does not destroy contract
(Bradbury v Morgan) but where offer made to living person who dies before
acceptance, offer no longer exists (Reynolds v Atherton – note this was
E Conditional offers:
Where express or implied conditions in offer not complied with offer can’t
be accepted (Financings Ltd v Stimson - implied term that, until acceptance,
goods will remain substantially in same condition as when offer made).
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