21/09/2020

Contract
Formation II
Agreement : Offer
Jessica Twombley

Formation of the contract: Agreement

• May be written or oral

• 19th Century – development of ‘Classical’ law of contract –

agreement = ‘offer and acceptance’

• This ‘traditional model’ of ‘agreement’ is difficult to apply

universally…

Formation of the contract:Agreement

Test applied to establish existence of agreement:

• Objective Approach

“Agreement is not a mental state but an act, and as an

act, is a matter of inference from conduct. The parties
are to be judged not by what is in their minds, but by
what they have said or written or done.”

Cheshire, Fifoot & Furmston

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Objective approach in action

Smith v Hughes (1871)

New Oats

Formation of the contract: Agreement

Traditional analysis: Agreement = Offer + Acceptance

Is there a valid offer?

• Clear & certain

• Shows intention to create legal relations?
Storer v Manchester CC

Is there a valid acceptance?

• ‘Mirrors the offer’ – unconditional (Hyde v Wrench)

• Communicated – (Felthouse v Bindley)
• By Offeree responding to offer

Invitations to treat are NOT Offers

Invitation to make an offer
 Gibson v Manchester CC [1979]
Display of goods in a shop window:
• Fisher v Bell [1961]
Display of goods on a supermarket shelf
• Royal Pharmaceutical Society of Great Britain v Boots
Cash Chemists Ltd
Advertisements
• Partridge v Crittenden [1968]
But see ‘If’ contracts
• Carlill v Carbolic Smoke Ball [1892]

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Invitations to Treat NOT Offers

Auction sales?

Auctioneer is inviting offers – he is making ITT

• Harris v Nickerson (1873) / Payne v Cave
BUT
‘without reserve’ auctions?
• Warlow v Harrison (1859)

Tenders?

Usually ITT BUT but may contain unilateral offer that can
create a separate contract
• Blackpool & Fylde Aero club v Blackpool BC [1990]

Termination of Offer
1. Revocation
Offeror may revoke offer at any time before acceptance:
• Payne v Cave / Routledge v Grant [1828]

Revocation must be communicated (postal rule does not

apply)

• Byrne v Van Tienhoven [1880]; cf Shuey v US [1875]; The

Brimnes [1975]

Termination of offer
2.Other means of Termination

• Lapse of time
• Rejection
• Counter-offer – Hyde v Wrench [1840]; Stevenson Jaques
& Co v McLean (1880);
• Counter-offer or request for info? Stevenson v McLean
[1880]
• Occurrence of condition subsequent or precedent
• Death/incapacity(?)

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Termination of Offer
3: Revocation of Unilateral Offer

Offeror can revoke any time before acceptance is complete

• Great Northern R/y v Witham [1873]

BUT

• Difficulty of timing – what if required act of acceptance has

begun but not yet been completed?
• Errington v Errington and Woods [1952]

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End of Lecture

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