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Ch.2 Agreement Lecture Notes 2020-21

Contract law (University of London)

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Ch.2 AGREEMENT: OFFER AND ACCEPTANCE

For a contract to be enforceable at court certain elements must be present:
1. AGREEMENT (offer/ Acceptance) – Chapter 2
2. CONSIDERATION provided by each party (simply, this means mutual exchange of something
which the law recognizes as having a value) – Chapter 3
3. INTENTION TO CREATE LEGAL RELATIONS – Chapter 4

WHAT IS A CONTRACT?
A contract is an agreement between parties where the parties have voluntarily assumed
liabilities/obligations with regard to each other.

To determine if there is an agreement valid in law in Gibson v Manchester City Council; HL insisted in
identification of offer and acceptance.

UNILATERAL AND BILATERAL AGREEMENTS

BI LATERAL AGREEMENTS: This means that each party takes on an obligation, usually by promising the
other something e.g.A Promises to sell goods to B in return of B Promising to pay the purchase price. In
this situation at the very upfront both parties have obligations.
Bilateral contracts are present in everyday life. You are entering this type of agreement every time you
make a purchase at the store, order a meal at a restaurant, and receive treatment from your doctor.

UNILATERAL AGREEMENT By contrast, a unilateral contract arises where only one party assumes an
obligation under the contract. e.g. promising to pay a £100 reward to anyone who finds your lost purse,
you are obliged to pay the reward to anyone who finds your purse, but nobody need to have undertaken
to do so.

In unilateral contracts, the offeror promises to pay when a certain act or task is complete.

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OFFER

An offer is interpreted according to an objective intention.

I the past ou ts pla ed u h e phasis o the eed fo a eeti g of i ds o consensus ad idem
for the making of contracts, this was determined by looking at actual intention of parties (Subjective
approach

But this has now largely been abandoned, today we adopt an objective interpretation which is from the
point of view of the reasonable person- the meaning a reasonable person i offe ee s positio ould
understand from offe o s words.

Smith v Hughes(1871)
Blackburn J explained the objective test as follows;
if hate er a a s real i te tio ay e ,if he conducts himself that a reasonable man would believe
he was assenting to a term proposed by the other party, and that other party upon that belief enters into
a contract with him, the man thus conducting himself would be equally bound as if he had agreed to
parties terms.

It was more recently summarized in the Supreme Court by Lord Clarke in RTS Flexible Systems Ltd v
Molkerei Alois Muller Gmbh & Co KG [2010]

Application of objective interpretation of an offer is seen in;

Centrovincial Estates v Merchant Investors (1983)

Claimant let premises to the defendant at £68,320 P.A subject to review. When the claimants mistakenly
proposed a new rent of £65,000 per annum ,the defendant consented. However, the claimant later
revealed that he intended to propose £126,000 and not £65,000. The claimants argued that no
reasonable tenant would have expected the rent to be reduced; the defendants responded that this was
a reasonable expectation considering their communicated dissatisfaction with the previous letting. COA
held that there was a binding agreement for £65.000. Whatever the o er s actual intention maybe
according to the reasonable man the owner agreed to contract at £65,000

In B2B contract (i.e. between two businesses) the interpretation of an offer is from the point of view of a
hypothetical and reasonable businessman in the position of the offeree ; Dhanani v Crasnianski (2011)

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There is one circumstance when the courts will depart from the usual objective approach and take
account of the actual subjective knowledge of the offeree. This is k o as the snapping up doctrine,
an offeree is not allowed to accept an offer when he knows that offeror when expressing the offer
made a mistake as to its terms

Hartog v Collins and Shields [1939]

Both parties ere a i al ski traders, hi h i the trade as sold per pie e a d ot y eight . The
seller offered to sell ski istake ly y eight . With full k o ledge of this istake the buyer accepted
the offer. Held the uyer s k o ledge of the seller s istake ust e considered in deciding if parties
have agreed. Therefore, no binding contract existed, and buyer was prevented from snatching at the
bargain.

Snapping up doctrine only applies where offeree is aware that the offeror is mistaken as to the terms he
intended to offer; Statoil ASA Louis Dreyfus E ergy Ser i es LP The Harriette N [2008]

The doctrine will apply both,

1. where, as in Hartog, the offeree is aware of the offe o s istake as to the te s he is offering
2. but also, where, as in Scriven Bros v Hindley [1913], the offeree should know that the offeror is
mistaken as to the terms he has offered perhaps because, as in Scriven, the offeree induced that
mistake by his own carelessness

Defining an offer
An offer is an expression of willingness to contract on certain terms. It must be made with the
intention that it will become binding upon acceptance.
(Offer is a FIRM UNDERTAKING TO BE BOUND, in the event IF TERMS ARE ACCEPTED BY THE OTHER)
It must be CERTAIN, FINAL, UNAMBIGIOUS.

The nature of an offer is encapsulated in Gibson V MCC and Storer V MCC

Gibson v Manchester City Council (1978)
The MCC adopted a policy of selling council houses to tenants. MCC prepared a brochure explaining the
scheme. Mr. Gibson (a tenant) completed the form contained in the brochure and sent it to the council
expressing his interest to buy the house.

The council treasurer wrote to Mr. Gibson stating; the council may be prepared to sell the house at a
stated price, if he wished to make a formal application to buy , he should complete a further form.

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Mr. Gibson completed the form, but he left the purchase price blank because he wished to know whether
the council would repair the path to his house or whether he could deduct the cost from the purchase
price. The council replied that the price has been fixed according to the condition of the property. Mr.
Gibson accepted this and asked the council to continue with his application.

However, after the local election the City Council discontinued the policy of selling of council house unless
a legally binding contract had already been concluded.

The HOL held that the treasurer s letter indicated a simple willingness to enter a negotiation and not an
offer capable of acceptance. HOL was influenced by the wording of the letter which lacked finality. It was
Mr. Gibson who made an offer by making a formal application but it was not accepted.

Storer v MCC (1974)

Mr.Storer made an application to buy his Council house. The town Clerk wrote to Mr. Storer I
understand you wish to purchase your council house, enclosed is the agreement for sale, if you sign
the agree e t a d retur it to e, I ill se d you the agree e t sig ed o ehalf of the ou il . But
before the town clerk had signed the agree e t o the ou il s ehalf the ou il ha ged politi al
control and discontinued sales unless a contract had already been entered. Held the lerk s letter was an
offer as the wording suggested that if Mr. Storer signed the agreement and returned that this would
amount to acceptance.

Offers must be distinguished/ differentiated from other steps of the

negotiating process

It is important to realize from the outset that not all communications will be offers, they will lack the
requisite intention to be bound upon acceptance.

Supply of information

Other steps in the negotiation process Statement of Intention

Invitation to treat

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Offers distinguished from a Supply of information

When one party supplies the information to enlighten the other party

Harvey v Facey (1893)

A prospective buyer by telegraph inquired from the owners of a farm, the lowest cash price for it. The
o ers replied that the lo est ash pri e for Bu pehallpe £900 . The prospe ti e uyer argued that
the owners had made an offer to sell at the stated price. Held owners had not made a offer but merely
supplied information to the query of the buyer.

However, in certain situations court may conclude that what may looks like a supply of information to be
an offer. As in the case of,

Bigg v Boyd Gibbins (1971)

Vendors letter stating price of the house was held to be an offer because the words used, suggested that
it was more than a mere statement of price

Offers distinguished from an Expression of Intention

In this instance one party states that he intends to do something This differs from an offer in that he is
not stating he will do something.

Harris v Nickerson (1873)

An auction was advertised giving details of the date, place, and things to be auctioned. Held it was not
an offer because it was not a definite promise to hold the auction. It was a mere expression of intention
to hold auction.

Offers distinguished from Invitations to Treat

An invitation to treat is an indication of a willingness to conduct business. It is an invitation to make an
offer or to commence negotiations

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1) Inviting bids at an auction (Auction Sales)

The general rule is that an auctioneer by inviting bids makes an invitation to treat. The offer is made by
the bidder. Ea h idde s offe lapses as soo as a highe id is ade.

Payne v Cave (1789)

Held it is the bidder who make the offer and acceptance is signified by auctioneers fall of hammer

In many cases, sellers at an auction specify reserve prices – the lowest prices they will accept for their
goods. If nobody bids at least that amount, the goods are not sold. A au tio ithout reser e , on the
other hand, means that the goods will be sold to the highest bidder.

When reading the following case, keep in mind that we have seen that an advertisement announcing
that an auction will be held is a statement of intention (Harris v Nickerson) and not an offer.

In Warlow v Harrison (1859)

An auction was advertised as ei g ithout reser e . The idder for the horse fou d his id reje ted as it
was below reserved price. The issue is whether he is entitled to the horse? The advertisement was only
statement of intention to hold auction thus it was the bidder who made the offer which was not
accepted. Therefore, bidder is not entitled to the horse. HOWEVER within the expression of intention to
hold the auction there was a collateral contract between the auctioneer and the highest bidder based on
undertaking (promise) that in the event auction was held as advertised it will be without reserved price.
Therefore, auctioneer is in breach of contract.
Also see Barry v Davies (2000)

2) Display of goods on shelves/ shop windows

 Display of goods in a shop window is an invitation to treat; Fisher v Bell (1961)

 A display of goods in a self-service shop -

Pharmaceutical Society of GB v Boots Cash Chemist(1953)
Defendant organized shop on a self-service basis They were charged with a breach of S.18(1) of the
Pharmacy and Poisons Act 1993 which required the sale of drugs to take place under the supervision of a
registered pharmacist. There was no pharmacist close to the shelves but a pharmacist at the cash desk
was authorized to prevent removal of any drug from the premises. Held the sale took place at the cash
desk and not when goods were taken from shelves. The display of goods was simply an Invitation to
treat. Therefore, D s ere ot i rea h of the A t.

Exceptional case- Chapelton v UDC(1940) ;a pile of deck chairs accompanied by a notice indicating a hire
charge amounted to an offer.

 What about goods displayed in a vending machine?

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Thornton v shoe lane parking( 1971) ; involved automatic car park. When car was driven up to the
machine a ticket was dispensed. Held contract was concluded when motorist drove up to the machine;
offer is made when the owners of the machine hold it out as being ready to receive money. Acceptance
occurred when customer put money to the slot.

Similarly, a vending machine should be construed as an offer to supply goods on display so that when
customer operates machine it amounts to acceptance

3) Classified Advertisements
The general rule is that an advertisement is an invitation to treat

The reason for this-

1. potential buyers may want to negotiate the price

2. To protect the advertiser as if adverts were treated as offers advertiser might find himself
contractually obliged to sell more goods than he in fact owned.

Partridge v Crittenden(1968)-
Rare birds for sale at a stated price was advertised in a newspaper. Held to be an invitation to treat as
otherwise the advertiser will be bound to supply the goods to everyone who responds to the
advertisement.

Grainger v Gough (1896)

A wine merchant prepared a list of his wines with prices. Held it was only an invitation to treat as if it
were an offer the merchant might find himself bound to any number of transactions which he would be
unable to carry out.

However if advertisement states UNTIL STOCKS LAST the it ould e a offe - the advertiser will not
be bound to contract with everyone who responds to the advert.

In the following case courts have concluded an advertisement to be an offer although in the context of
a unilateral contract.

Calill v Carbolic Smoke Ball Co (1893)

The D placed an advertisement in which they offered to pay £100 to any person who caught influenza
after having used their smoke ball in the prescribed manner, advertisement also indicated £1000 was
deposited in Alliance bank to show their good faith. The claimant caught influenza after having used the
smoke ball in the specified manner. She claimed the £100.

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Held Advertisement was an offer to the whole world that a contract was made with those persons who
performed the condition on the faith of the advertisement. Court was influenced by * the statement that
a special bank account had been opened * specified the claim could only be brought if the smoke balls
were taken in the prescribed manner etc

The claimant entitled to recover £100.

4) Tenders
As a general rule, a request for tenders is regarded as an invitation to treat ; Spencer v Harding (1870)
so there is no obligation to accept any of the tenders put forward.

The offer is made by the person who submits the tender, and a contract comes into existence when
one of them is accepted.

In exceptional cases, however, an invitation for tenders may itself be an offer, and submission of a
tender then becomes acceptance of that offer. The main example of this is where the invitation to
tender makes it clear that the lowest tender (or the highest) will be accepted; Harvela Investments Ltd v
Royal Trust of Canada(1986)

An invitation/request for tender may contain an implied offer to consider all tenders correctly
submitted, even if it is not an undertaking(firm promise) to accept one

Blackpool and Fylde Aero Club Ltd v Blackpool (1990)

Local authority called for tenders for renting an airfield. The advertisement stated that all tenders must
be submitted before a deadline. X submitted the tender before the deadline but due to an oversight it
as ot o sidered. Held X s te der as NOT a epted ho e er there was a collateral contract between
parties under which the local authority made an implied offer to consider every tender within the
deadline therefore X was entitled to damages.

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ACCEPTANCE

Definition-
Acceptance is an unqualified expression of assent to the terms proposed by the offeror.

Acceptance can be by word or conduct.

Unilateral contracts are accepted by conduct as in carlil v Carbolic smoke ball. Conduct will only amount
to acceptance if offeree did the act in question with the intention (objectively assessed) of accepting
offer; Day Morris Associates v Voyce ( 2003)

Even a bilateral contract maybe accepted by conduct.-Brodgen V Metropolitan Railway(1877);

Brodgen offered to supply goods to the defendant. The defendant did not reply (no acceptance by word).
Nevertheless, Brodgen delivered goods to the defe da t ho took goods i , to its sto k. Held Brodge s
offer was accepted by defe da t s conduct.
See Claxton Engineering Services Ltd v TXM Olaj-ES Gazkutato KFT (2010)

Rules of Acceptance

1. ACCEPTANCE MUST BE UNCONDITIONAL

Acceptance must be without qualifications and without condition. If an acceptance is made with words
su je t to o t a t that is ot valid acceptance.

Chillingworth v Esche(1924)
Offeree purported to accept offer subject to a proper contract to be drawn by solicitors. Held, did not
amount to acceptance as it was conditional.

Compare with,

Branca v Cobarro (1947)

When offeree accepts the offer agreeing to its terms, and request that the agreement maybe put into
writing, it is an unconditional acceptance of the offer and only a request made to put in to writing what
has been verbally agreed

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2. ACCEPTANCE MUST BE IDENTICAL TO THE TERMS OF THE OFFER

Acceptance must be a mirror image of the offer. If offeree purports to accept on different terms
(introduces new terms) it is not acceptance will amount to making of a counter offer.

Hyde v Wrench (1840)

Held the effect of a counter offe is to kill off the o igi al offe so that it a ot su se ue tl e
accepted by the offeree.
 D offered to sell some land to the claimant for £1000.
 The claimant replied by offering to purchase land for £950.
 D refused to sell for £950.
 Claimant then wrote to D agreeing to pay £1000 but D still refused to sell.
Held No contract between parties. Claimants offer of £950 cou ter offer hi h killed off D s origi al offer
so as to render it incapable of subsequent acceptance.

Note- if the counter offer is accepted ,the contract is made on the terms of the counter offer and not the
original offer: Brogden v Metropolitan Railway.

A counter offer must be distinguished from an inquiry/request for information.

It may be difficult to determine whether a particular communication is a counter offer or not. If for
example , a person offers to sell a television for £100, the potential buyer may ask whether cash is
required, or whether a cheque is acceptable. Such an inquiry is not a counter offer. It is not suggesting
alternative terms for the contract, but attempting to clarify the way in which the contract will be
performed and in particular , whether a specific type of performance will be acceptable.

Stevenson, Jacques & Co v McLean(1880)

-Offeror offered to sell iron at a stipulated price.
- Buyer wrote inquiring whether delivery Can be over a period of time. offeror did not reply and instead
sold iron to another party.
-Offeree having received no reply wrote to offeror accepting offer.
-Offeror argued his offer was not available for acceptance as offeree made a counteroffer
-Held offeree had only made an inquiry therefore offer was open for acceptance

Note sometimes a counteroffer is disguised as a request for information/inquiry then it will be treated
as killing off the original offer. e.g. please let me know if you can give a discount on price?

In some cases, parties will attempt to contract on differing standard forms. The e ill e a attle of
fo s ith offe s a d counteroffers passing to and fro.

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This is common among businesses, each party will send the other his own set of forms, which is
odified the othe a d etu ed ith the othe s set of sta da d fo s. This esults i a hai of
counter offers.

Butler Machine Tool v Ex cell o (1979)CA held last shot; i s this attle of fo s ( o t a t is ade o
the very final counter offer) The minority judgment of Lord Denning MR in Butler criticised this approach
he e a o t a t as o luded o eithe the u e o the selle s te s. He p efe ed to look at the
communications as a whole and hold there to be a contract when there is substantial agreement on all
material points.

Lo d De i g s adi al app oa h has ot ee follo ed. In Tekdata Interconnections Ltd v Amphenol

Ltd [2009] the Court of Appeal reasserted the traditional approach emphasising the importance of
certainty in commercial transactions.

3. ACCEPTANCE MUST BE COMMUNICATED IN ACTUAL FACT TO THE

OFFEROR OR OFFEROR’S AGENT

Can silence be treated as acceptance?

 Given that acceptance must be communicated it is so eti es e p essed that Offe ees sile e
cannot be treated as acceptance. However this is not a absolute rule as identified by L. Steyn in
Vitol v Norelf

 Felthouse v Bindley(1862) -The offeror cannot waive communication( treat silence as

acceptance) if that would be to the detriment of the offeree. (it will be detrimental if it
amounts to forcing a contract on unwilling offeree)

 This means silence could amount to acceptance if it is NOT detrimental offeree – offeree is not
forced in to a contract. In Rust v Abbey Life [1979] ; CA by way of obiter dicta, approved this
ore li ited state e t of the sile e as a epta e rule

An offeror who fails to receive an acceptance through their own fault

Such an offeror may be prevented from claiming that the non-communication means they should not be
bound by the contract.

In Entores v Miles Far East Corp (1955)it was suggested that this principle could apply where an offer
was accepted by telephone, and the offeror did not catch the words of acceptance, but failed to ask for
them to be repeated.

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In the case of communication to an unmanned receptor such as an answering machine or fax

communication takes place when offeror reads or listens to the message. But when dealing with
commercial parties court take a different approach as in The Brimnes(1974) where the acceptance is
se t tele du i g usi ess hou s, ut is si pl ot ead a o e i the offe o s offi e, a epta e
takes place when it is reasonable to expect the machine to be checked

Method of communication
If an offeror has prescribed a method of communication then offeree must adopt that method or an
equally effective one.. To be considered equally effective, a mode of communication should not be
slower than the method specified in the offer

Manchester Diocesan council v Commercial and General Investments(1969) ; Here the offeror wanted
acceptance to be sent to the registered office. Before sending the letter offeree had already informed the
offerors lawyers, this was equally effective acceptance

If the method of communication prescribed is mandatory, then only that method can be adopted.e.g
Storer v Manchester C.C

Exceptions to the communication rule-

 Acceptance by performing terms of Contract

When terms of offer are such, the offeree performing the term amounts to acceptance and there is no
eed that a epta e ust e o u i ated to offe o /offe o age t.

E.g. Calill v CCarbolic Smoke ball- unilateral offer.

 Postal acceptance rule

Where post is the proper method of communication between the parties, posting the letter of
acceptance or handing over the letter to the post office completes acceptance, there is no need for the
acceptance to be communicated in actual fact ; Adam v Lindsell(1818)

Postal acceptance rule applies where POST IS THE PROPER METHOD OF COMMUNICATION, this will be
where;

a) Where offeror has sent his offer by post or,

b) Where offeror has requested acceptance to be sent by post or,
c) circumstances are such that it must have been within the contemplation of the parties that
post might be used as means of communication acceptance; Henthorn v Frazer (1892)

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Household Insurance v Grant (1879)

When postal rule acceptance applies the contract is made on posting or delivery to the postal authority it
is irrelevant if the letter of acceptance was delayed in post or never reaches the offeror.

Situations where post rule will not apply-

1) Quenerduaine v Cole (1833); Counter offer was sent be telegram. Offeree posted the letter of
acceptance and argued contract had been made when letter was posted. Held since the offeror had sent
his offer by a more expeditious method, post is not the proper method of communication (Postal rule
will not apply)

2)Holwell securities v Hughes(1974); offeror insisted oti e i riti g of acceptance. Held by insisting
on NOTICE , offeror wanted actual knowledge of acceptance. Therefore impliedly excluded application
of postal rule

3)LJ Korbetis v Transgrain Shipping BV (2005).;The postal acceptance rule will not allow a contract to be
concluded by posting the acceptance where the letter is incorrectly addressed by the offeree. The offer
may accept the risk of delay occasioned by the post but not the carelessness of the offeree:

4) Entores v Miles Far East

Corp (1955) /Brinkibon v Stahag stahl (1983); courts have refused to extend
the postal acceptance rule to instant methods of communication such as fax and email . Therefore,
when acceptance is sent by instant methods of communication acceptance does not take place when
message is dispatched but when it is received and read by the offeror

4. OFFEREE MUST HAVE KNOWLEDGE OF THE OFFER AT THE TIME OF

ACCEPTANCE
At the time of acceptance offer should have been communicated to the offeree and offeree must be
aware of the offer. – offeree cannot agree to an offer he is not aware of.

The authorities are however, divided on the need to communicate the offer. Gibbons v Proctor (1891) ;it
seems as if a policeman was allowed to recover a reward when he sent information in ignorance of the
offer of reward.

The better view is thought to be expressed in the Australian case of R v Clarke [1927] ; there cannot be
assent without knowledge of the offer; and ignorance of the offer is the same thing whether it is due to
never hearing of it or forgetting it after hearing

CROSS OFFERS

Are two offers containing the same terms without either party knowing of existence of the other offer.
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Tinn v Hoffman & Co; Blackburn J …. the promise or an offer being made of each side in ignorance of
the promise or offer made on the other side cannot be construed as acceptance

TERMINATION OF AN OFFER/ HOW LONG DOES AN OFFER LAST?

1. By Revocation (change of mind)

There is no legal commitment until a contract has been formed ,therefore offeror can change their mind
and withdraw offer before acceptance; Offord v Davies(1862)

where offeror has stipulated that offer will be open for a certain time period he/she can nevertheless
withdraw the offer within this time period. This will not be the case where offeror is obliged by separate
binding contract to keep offer open for specified time.

For revocation to be effective:

 Revocation must be communicated to the offeree in actual fact
 Revocation must be before acceptance
Bryne v Van Tienhoven(1880)
1st Oct – T posted offer to sell goods
8th Oct-T posted revocation of offer
11th Oct-B received the offer and accepted it by telegram on same day
20th Oct-B received the revocation dated 8th Oct.
Held-T s e o atio ot alid as it did ot ea h B u til afte a epta e. Whi h took pla e o the
11th of Oct
Dickinson v Dodds (1875)-revocation maybe communicated to offeree even by a TP.

Tenax Steamship Co v Owners of the Motor Vessel Brimnes (The Brimnes) [1975] suggested that
o u i atio of e o atio to a u a ed e epto is effe ti e f o the ti e at hi h it is
reasonable to expect that machine to be checked.

Therefore, if it is not reasonable to expect a computer to be checked out of usual business hours a
communication sent at this time may only be regarded as communicated after the next opening of the
office concerned

In unilateral CH s :

 it is sufficient that revocation is made by the same method adopted to communicate the offer
OR by an equally expeditious method.: Shuey v USA(1875)
 Revocation must be before acceptance- unilateral contracts are accepted by performance.
Completion of performance amounts to acceptance

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Therefore an offer of an reward can be revoked even after commencement of performance but before
completion.

Daulia v Four Mill Bank(1978)- L.Goff said o ita that the e is a i plied o ligatio o the pa t of the
offeror not to prevent the offeree who has commenced performing terms of the offer from completing
performance. - this means that the person who has commenced performance can still sue the offeror
for breach of this implied condition.

L. Goff s O ita as suppo ted i Errington v Errington (1952) and has academic support of Sir Fredrick
Pollock

Ho e e L. Goff s ie as eje ted i Luxor v Cooper (1941) such a term/obligation will only be
implied in to the contract when it is necessary to make agreement commercially effective. Therefore it
is not appropriate to imply such a term when a large consideration( reward) is being offered for a small
amount of work.

But in Schweppe v Harper (2008) emphasized cases such as luxfor where offeor can revoke after
performance has begun will be rare.

When offeree changes his/her mind

 Consider the position where after posting letter of acceptance, offeree attempts to communicate
rejection in actual fact before acceptance letter is received by offeror, Is the rejection valid?

Issues arise with the postal acceptance rule .No English case law on this point therefore we look at cases
from other Jurisdictions – therefore decisions are not binding

Scottish View in Dunmore v Alexander(1830) held that there was no binding contract because offeror
got to know of rejection in actual fact well before acceptance letter arrived.

New Zealand & South African View in Wenkheim v Ardnt(1873)/ A to Z Bazzars v Minster of
Agriculture(1974)held applying the postal rule when acceptance letter is posted a binding contract is
made. Therefore, rejecting the offer is no longer a possibility. This is more in line with English law and
English judges are bound to follow this approach

Prof. Tritel suggest the issue is whether offeror is unjustly prejudiced by allowing the offeree to rely on
subsequent communication

2. Lapse of time- if time has been fixed for offer to be kept open then on the expiry of the time. If no
time is fixed, offer will terminate on lapse of reasonable period of time.

Ramsgate Victoria Hotel v Montefore(1866)

D offered to pur hase shares i the lai a t s o pa y. 6 o ths later lai a t atte pted to a ept
the offer by which time value of shares had fallen. D also had not withdrawn offer however held offer
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was no longer open due to the nature of the subjevt matter therefore offer lapsed after a reasonable
period.
3. Rejection-offer will terminate if expressly or impliedly rejected. Implied rejection as in a counter
offer.

4. Counter offer- Counter offer terminates the original offer. Refer case of Hyde v wrench

5. By death-offeror dies before acceptanceoffer terminates. Offeree dies if offer was made to a
specific offeree in which case death of offeree before acceptance terminates the offer.

6. Non fulfillment of a condition subject to which the offer is made. E.g. offering to buy a car
provided original document are provided.

Financings v Stimsons(1962)-offeror agreed to buy car on finance terms before finance company
accepted the offer, the car was damaged. Held offer terminated when the car was damaged as the
offer to take car on finance terms was made subject to implied terms that the car will be in the same
condition at the time of acceptance.

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