General Rule (GR) for an agreement to be legally enforceable, following requirements must be satisfied:
1. There is an agreement between the parties (2 or more persons) 2. The parties intended to create legal relations
3. Each party has provided consideration, that is, paid a price or made a promise
GR for an agreement to be formed: 1. One person (the offeror) has made an offer 2. Another person (the offeree) has accepted the offer 3. The offeree has communicated their acceptance to the offeror
Offer: an expression of willingness to enter into an enforceable r/s with the person to whom the offer is directed
Offer v Request for information: Distinction rests on offeror’s intention to be bound immediately in contract e.g. Harvey v Facey mere statement of the lowest price at which the vendor would sell contains no implied contract to sell at that price to the persons making the inquiry.
Offers v Invitations to Treat (An invitation to negotiate or make an offer) e.g. 1. Price lists and catalogues 2. Invitation to submit a tender 3. USUALLY advertisement except reward cases Exceptions to the GR: e.g. Carlill v Carbolic Smokeball Company (1892)
Court dec it was MORE than a mere invitation to treat and it was a legal offer to the world because the wording of the ad made it clear that CSBC was willing to enter into legal relations with anyone who accepted the offer of the reward.
4. Display of goods e.g. Pharmaceutical Society of Greate Britain v Boots Cash Chemist ltd (1953) sale takes place at the cashier under the supervision of the pharmacist
Offer GR: 1. Offer must be communicated to be effective. 2. Offer can be withdrawn or revoked anytime prior to acceptance unless offeree has paid the offeror to keep the offer open e.g. option contract: Goldsborough Mort & Co Ltd v Quinn (1910) Court dec cos GMC had paid Quinn to keep his offer open for one week Quinn so was not permitted to withdraw the offer, which meant that when GMC accepted the offer a contract was formed. Quinn had breached the contract by selling the land to someone else.
3. Revocation must be communicated to the offeree 4. Communication by a reliable third party is sufficient
Termination of Offer: 1. An offer will lapse after the expiry of a reasonable period of time e.g. Ramsgate Victoria Hotel Co Ltd v Montefiore (1866) Montefiore offered to buy RVH shares, but RVS replied 5 months later. Court dec there was no contract because there was no agreement. Montefiore’s offer had lapsed before RVH accepted it because more than a reasonable period of time had lapsed. 2. Offer will terminate if the offeror dies before acceptance 3. An offer will be terminated by a counter offer
Acceptance GR: 1. Must be unqualified and complete, unless would become counter offer e.g. Hyde v Wrench (1840) no valid binding contract between the parties for the purchase of this property. Wrench offered to sell it for £1000, and if that had been at once unconditionally accepted there would undoubtedly have been a perfect binding contract; instead Hyde purchase the property for £950
2. Conditional acceptance is not acceptance 3. Acceptance must be made in reliance of the offer e.g. R v Clarke (1927) Court explained that a person couldn’t accept an offer by conduct unless they are acting in reliance on the offer.
4. Acceptance must be made in conformity with the offer (time, place or mode) 5. Must be communicated to the offeror - Silence is not considered e.g. Powell v Lee (1908) Court dec that there was no agreement between Powell and the board. The board had not communicated its acceptance and an agreement is not formed until acceptance of the offer is communicated to the offeror. The communicated by the board member acting without authority was invalid. Felthouse v Bindley (1862) Nephew intended the uncle to have the horse but did not communicate this intention. No contract to pass the horse to uncle Exceptions...