2014 Q1 - Offer and Acceptance

The question above seems to indicate discussion is required on the formation of the contract, specifically
ascertaining whether there was a valid offer and acceptance. Lord Wilberforce in The Eurymedon stated that
the marked slots of a valid contract is a clear and unequivocal offer, mirrored with an acceptance provided that
consideration and an intention to create legal relations must also exist. As such, Professor Treitel defines an
offer as an expression of willingness to contract on specified terms, made with the intention of it becoming
binding upon acceptance by the person whom it is addressed. Candidate would need to discuss whether
Frederick has a valid contract with George or Hari.

An offer is different from an invitation to treat. Offer is an expression of willingness to be bound on certain and
specified terms with the intention that it would be binding upon acceptance. Invitation to treat happens in
preliminary stage of negotiations, in which one party invites another to make offer, not therefore open to
acceptance. An advertisement would be considered as an offer or an invitation to treat would depend on
whether it is for a unilateral contract or bilateral contract. Bilateral offer is a promise made in exchange for
another while unilateral offers are offer made to the world at large. The general rule for advertisements is that
it is an invitation to treat as they are usually bilateral offers, such as advertisement of specific goods at certain
price. In Partridge v Crittenden, the plaintiff’s conviction was quashed as the court ruled that an advertisement
for Bramblefinch hens and cocks, protected species was merely an invitation to treat. Lord Parker mentioned
in the judgement that it would make ‘business sense’ to be an invitation to treat where limited stock is in
place.

The exception to the rule is unilateral offers, such as those advertisements offering a reward for a certain
performance are considered as offers. Cases like Carlill v Carbolic Smoke Ball Co and Brogden v Metropolitan
Railway Co are the examples of when an advertisement could be considered as offer, On the facts, Frederick
advertised the sale of his digital camera in local newspaper for £2,000. This can be construed as an invitation
to treat, as per Partridge v Crittenden due to the limited stock of one camera at a certain price. The
advertisement is also meant for a bilateral contract where promise was made in hope for another. There is no
performances needed and neither is there any specific conduct needed for it to be an unilateral offer.
Frederick would be the promise and the subsequent purchasers would be the promisor for a bilateral contract,
Furthermore, after George called Frederick, they had a discussion. This shows that there are still room for
negotiation, hence it could be proven that the advertisement was merely an invitation to treat as per Gibson v
Manchester City Council, indicating that there is no manifestation of intention to be bound when the
statement was not final.

If the offeree only accepts part of the terms of the offer and subsequently introduces new terms, a counter
offer has been made and as such, the previous offer is ‘struck off’ and is incapable of subsequent acceptance as
per Hyde v Wrench. In this case defendant offered to sell his farm for £1,000 but claimant responded by
offering to buy it at £950. This constitutes a counter offer, which terminates the original offer, as a new term is
introduced into the contract. Claimant cannot try to accept the original offer later. Looking at the present case
facts, Frederick in the end offered £1,500 to sell the camera to George after discussion. Since invitation to treat
had been established before, the offer subsequent offers which changes the original price of the good is not a
counter offer rather the first offer been made. Frederick, the owner of the subject matter would remain a right
to accept or reject any offers made by other buyers while waiting for George’s reply. There is also no question
of a mere inquires on the facts as Stevenson v McLean because parties were dealing under negotiations.

For a contract to be formed, there must be an acceptance of the offer. An acceptance is defined as an
unqualified, unconditional assent to all the terms of the offer, pursuant to the Mirror Image Rule and the case
of Tinn v Hoffman. Silence cannot amount to acceptance unless it is absolutely clear that acceptance was
intended, as ruled in Felthouse v Bindley. However, silence could be sufficient if it was the offeree who
suggested that the silence on their part would constitute an acceptance as held in the case of Re Selectmove
Ltd. On the facts, George said that he needed time to consider the offer and mentioned that if Frederick does
not hear from him until Thursday evening, his silence would amount to an acceptance. Under this situation,
the silence was imposed on the offeree George, entailing he agreed to be bound by the acceptance and
purchase the camera for £1,500. Thus, this acceptance through silence is valid as per Re Selectmove Ltd and
needed to be distinguished from the case of Felthouse v Bindley where the silence was imposed on the
offeror.

The general rule of acceptance is it must be communicated. As per Denning LJ in Entores v Miles Far East
Corporation, the offeror is not bound to any contract until he has a clear answer from the offeree. The rule of
communication for instantaneous communication was laid down in the case of Brinkibon v Stahag Stahl. The
mode of communication are normally via telephone, fax, email and recently added, instant messages from
platforms like Whatsapp. The aforementioned cases is about a telex was received by the offeror at the place at
which the offeror happened to be. This general rule will only apply during working hours as it is assumed that
instantaneous communication brings the conversation of parties as if the parties were talking to each other
‘face-to-face’. On the facts, George had accepted the offer with unqualified and unconditional assent to all the
terms of the offer to buy the camera at £1,500 by sending a fax to Frederick’s home at 5.15pm. According to of
Brinkibon v Stahag Stahl and the The Brimnes, the telex communicating message which was sent during
working hours should be taken as if it will be seen when it is sent. The negligence of the receiver not reading
the message will not change the general rule.

However, it can be argued that there was no acceptance yet as it was not received by Frederick. The rule in
instantaneous communication is that it must be brought to the attention of the offeror. Refer the decisios of
the cases like Brinkibon v Stahag Stahl and the The Brimnes, the two dealing parties were businesses and not
ordinary people. In present case, it was unclear that whether Frederick or George was in the course of business
and neither the problem did not indicate does the office hours implies here. Even if it was, it is rebuttable that
the time George faxed his acceptance at 5.15pm, it had passed the traditional ‘9 to 5’ standard business hour.
Hence, it could be advanced that there was no acceptance communicated, Even if the courts held that there
was communication of the acceptance, there is still the matter of revocation of offer made by Frederick.

Generally, pursuant to the decision in Payne v Cave and Routledge v Grant, a bilateral offer can be revoked
any time before acceptance. The case of Countess of Dunmore v Alexander involved two letters, one of
acceptance and another of revocation. It was held that revocation took place because it was the first letter
opened. Revocation will only take effect upon communication, according to Byrne v Leon Van Tienhoven. In
the present case, clearly the method of Frederick terminating the offer is by revocation. As this is a bilateral
offer, revocation only take place any time before acceptance. Frederick tried to revoke the offer on
Wednesday around 3pm, but George’s internet service provider had problem and the message was never
directed to him. The revocation had not been communicated yet because in instantaneous mode of
communication, revocation would be valid when the party reads it. Thus, there is no revocation yet at the
moment.

In Dickinson v Dodds, the court ruled that revocation may be valid if it is communicated by a reliable third
party. Apart from emailing, Frederick called George and informed his wife about the revocation at 6pm. As the
third party is the spouse of George, she should be a reliable third party to communicate. In addition, there is
no hostility mentioned between George and his wife and the fact that she said she would pass the information
to George indicates that she is a reliable third party, Hence, revocation could be considered valid. Question
arises whether has the acceptance been made before the revocation was made while the call between
Frederick and George’s wife happened at 6pm, which is later than George fax at 5.15pm. It is likely that the
acceptance did not come before the revocation as the acceptance has not been communicated. Although it is
reasonable to expect Frederick to check his fax machine, the fact that Frederick was not brought to its
attention after office hour would make the acceptance still un-communicated. With regards to the silence, the
statement was that there would automatically be an acceptance on Thursday evening if Frederick had not
heard anything from George, Since it was on Thursday that the acceptance through silence was to materialise,
Frederick revoked the offer on Wednesday, before the stipulated date of acceptance. Thus the revocation
again, is valid, It can be concluded that Frederick would not be liable for George as there has not been a valid
contract between them as of the moment.

With regards to Hari, there is a valid agreement, From the facts, he made an offer to buy the camera at £2,300
to Frederick and Frederick accepted it. It was a valid offer from Hari as it is not a counter-offer but a first -time
offer made to Frederick since the advertisement was merely an invitation to treat which purchaser is supposed
to offer a price and the owner accept it. Hari, the purchaser and the owner, Frederick had formed a contract
through words of agreement. Provided that Hari furnishes some form of consideration, the contract would be
binding and Frederick would have to sell the camera to Hari at £2,300.

In conclusion, there was no valid contract between Frederick and George. Even though there was an offer,
there was no consensus at idem and no acceptance. The offer was also revoked before acceptance. If there
was indeed an agreement if offer and acceptance was established, the elements of consideration and the
presumption that there is an intention to create legal relations should be established as well in order to
determine whether there is a valid and binding contract between Frederick and George, In terms of Hari, there
was a valid contract between him and Frederick and Frederick is ought to sell the camera to him.