#3102 - Agreement - GDL Contract Law

Introduction

- Contract requires:

• agreement (valid offer + acceptance)

• ICLR

• consideration

- Deal with each potential contract in turn.

1. Valid Offer?

- Definition: “expression of willingness to contract on specified terms, made with the intention that it is to become legally binding as soon as it is accepted by the person to whom it is addressed” (Treitel).

- 1. Must be clear + certain: i.e. could be accepted without further info. (Storer v MCC cf. Gibson v MCC).

• vs. ITT: invitation to make offer.

  • advertisements (Partridge v Crittenden; Harris v Nickerson)

    • exception: unilateral offer: accepted by performance of act (Carlill v Carbolic Smoke Ball Co.)

    • exception: advert by manufacturer? (Grainger & Son v Gough [Ld Herschell] obiter.)

  • display of goods (Fisher v Bell; Pharmaceutical Soc of GB v Boots Cash Chemist)

  • invitations to tender (Spencer v Harding)

    • but: can inc. unilateral offer to accept highest bid (Harvela Investments Ltd v Royal Trust Co of Canada Ltd)

    • but: can be unilateral offer to consider (Blackpool & Flyde Aero Club v Blackpool BC) – if solicited from specified parties, deadline, absolute conditions.

  • auctions (Payne v Cave)

    • but: w/o reserve – unilateral offer to sell to highest bidder (Warlow v Harrison; Barry v Davis)

  • websites (reg 11 Electronic Commerce (EC Dir) Regs 2002)

- 2. Must be communicated to offeree (Taylor v Laird).

• but general offer can be to whole world (Carlill v Carbolic Smoke Ball Co).

- 3. Was offer terminated?

• 1. rejection by offeree.

  • counter offer (Hyde v Wrench) offer killed.

    • battle of the forms: final shot wins (Butler Machine Tool v Ex-Cell-O)

  • not RFI offer alive (Stevenson Jacques & Co v McLean: ancillary query, does not alter terms, interrogatory language)

• 2. revocation by offeror.

  • any time before acceptance (Payne v Cave)

  • effective only when offeree aware (Byre v van Tienhoven)

  • by reliable 3^rd party: need not be authorized as long as shows offeror’s unequivocal intention to revoke (Dickinson v Dodds)

  • option contracts – bind only if offer, acceptance, ICLR + consideration (Routledge v Grant; Dickinson v Dodds)

    • consideration: sufficient (White v Bluett) not adequate (Chappell v Nestle)

    • promise sufficient (Sunlop v Selfridge)

  • unilateral offer:

    • can be revoked before completion (GNRC v Witham; Daulia Ltd v Four Millbank Nominees)

      • exception: cannot obstruct once begun (Errington v Errington & Woods)

    • same notoriety as offer (Shuey v US)

• 3. lapse

  • a. passage of time (Ramsgate Victoria Hotel Co v Montefiore)

  • b. death: (i) of offeror, if offeree aware (Bradbury v Morgan); (ii) of offeree (Duff’s Executors’ Case)

  • c. non-fulfilment of condition precedent (Financings Ltd v Stimson)

2. Valid Acceptance?

- 1. Must be mirror image (unqualified) (Hyde v Wrench)

- 2. Must be in response to offer.

• a. by offeree (Boulton v Jones)

  • or authorised agent (Gibbons v Proctor)

• b. in knowledge/response to offer (R v Clarke)

  • motive irrelevant (Williams v Carwardine)

  • NOT cross-offers (Tinn v Hoffmann)

- 3. Must be communicated to offeror.

• NOT silence (Felthouse v Brindley).

• by conduct (Taylor v Allen; Brogden v Metropolitan Railway; Intense Investments Ltd v Development Ventures Ltd)

• can by communicated by authorised 3^rd party (Powell v Lee)

• exceptions:

  • unilateral offer (Carlill v Carbolic Smoke Ball)

  • offeror negligence (Entores v Miles Far East Corp; The Brimnes)

• postal rule: posted acceptance binding from time posted (Adams v Lindsell)

  • proper posting required (Re London and Northern Bank ex p Jones)

  • loss/delay irrelevant (Household Fire and Carriage Accident Insurance Co v Grant)

  • exceptions:

    • misaddressed: takes effect at point least favourable to offeree (Getreide Import v Contimar)

    • unreasonable to use post (Henthorn v Fraser; Quenerduaine v Cole: prompt acceptance required)

    • ousted: require communication (Holwell Securities v Hughes)

  • revocation of posted acceptance possible (Dunmore v Alexander)

    • but criticised (Wenkheim v Arndt [NZ]; Thomson v James [Scot])

  • (N.B. does not apply to revocations: bind when received – Byrne v van Tienhoven).

• instantaneous: actual communication required (Entores v Miles: b/c offeree knows if received instantly; Brinkibon v Stahag Stahl)

  • office hours: assume receipt (The Brimnes)

  • outside office hours: effective next working day (Mondial Shipping v Astarte Shipping)

- Prescribed mode of acceptance?

• must be explicitly mandatory + others excluded (Manchester Diocesan Council for Education v Commercial and General Investments)

• if not explicit: equally advantageous forms to offeror OK (Tinn v Hoffman & Co)

• offeree can waive stipulation for his benefit (Yates Building Co v Pulleyn & Sons)

• offeror can waive right to insist (Manchester Diocesan v CGI)

3. ICLR

- Objective test: reasonable man (Smith v Hughes) but: context considered (Edmonds v Lawson)

- Commercial agreements: rebuttable presumption of ICLR (Edwards v Skyways).

• difficult to rebut (Bunn & Bunn v Rees & Parker: full contract not needed; Bowerman v ABTA)

• can be rebutted (Hadley v Kemp)

  • express honourable pledge clause (Rose & Frank Co v Crompton Bros)

    • but must be v. clear (Edwards v Skyways: ‘ex gratia’ not sufficient)

  • ‘subject to contract’ (Chillingworth v Esche)

  • jest/anger (Licences Insurance Co v Lawson; Leonard v Pepsico)

  • comfort letter: if no intention expressed (Kleinwort Benson Ltd v Malaysia Mining Corp.)

  • collective agreement (s179 TULRCA 1992)

  • advertisements (Partridge v Crittenden)

    • exception: unilateral offer (Carlill v Carbolic Smoke Ball; debatable: Esso Petroleum Co v Comms of Customs & Excise)

- Social/domestic agreements: rebuttable presumption of no ICLR (Balfour v Balfour; Jones v Padavatton)

• can be rebutted:

  • estranged couples (Merritt v Merritt)

  • mutual obligations (Simpkins v Pays)

  • previous conduct (Peck v Lateau)

    - Capacity:

• minors: usually lack capacity not bound.

  • exception: necessaries (s3(2)-(3) SGA 1979; Nash v Inman)

  • exception: beneficial contracts of service (Doyle v White City Stadium; Aylesbury FC v Watford AFC; Proform v Proactive)

  • can rescind/ratify at 18 – may be liable for continuing obligations (Steinberg v Scala (Leeds) Ltd); may have to return property (s3(1) Minor’s Contracts Act 1987)

• mentally incapacitated /...