Sara Li

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Contracts – MacDougall 2010-2011
Sara Li

FORMATION

Offer & Acceptance

Offer & Invitation to Treat

Mere puffs Invitation to Treat Offer
Mere puff: no reasonable person would take it as an offer

Can the terms of the K (ie offer) only come from one party?
* Battle of the forms - last shot/first blow? (Denning in Butler Machine Tool v Ex-Cell-O Corp) * Strict offer & acceptance is reaffirmed in Gibson v Manchester City Council [1979] - only extreme cases might not fit into offer & acceptance model. Denning is rejected. * NZ Shipping Co v AM Satterthwaite [1975] - must accept that sometimes the facts of the case don't fit neatly into offer, acceptance, & consideration * Some Ks require both parties to have input - but the offeror in the end is the one making the offer - so the offeror just incorporates the other party's terms in the offer * Some terms are implied (in many cases, by statute)

* Sometimes Ks are created through conduct/performance of a term by a party rather than negotiations * Trentham Ltd v Archital Luxfer [1993] - a K can be concluded by conduct; such a K can impliedly & retrospectively cover pre-contractual performance

Offer vs Invitation to treat – how to tell the difference
1. Have all the details of the eventual K been set out? Are there ambiguities remaining? 1. Would treating a communication as an offer lead to an absurdity? * Eg. if treated as an offer, might lead to too many acceptances (and thus K's) than the offeror can handle.. But this argument doesn’t always hold… Carbolic Smoke Ball [1893] * Invitation is a stmt of readiness to negotiate

* Invitation can still have some legal significance:
* May be a source of terms that are included in the offer * May be a source of representations or assumptions that can affect the K if they are untrue * May be the source of info that becomes the basis of a claim for certain types of damages * Whether something is a mere puff, ITT, or offer - is a question of intent (Canadian Dyers Assn) * Intent is objective, K does not care about subjective intent: Storer v Manchester City Council * Sometimes established categories helps:

* Grainger & Son v Gough [1896] - ads are generally viewed as invitations to treat * Harris v Nickerson (1873) - auctioneer's words are an ITT, buyers bid is an offer, and auctioneer gives acceptance * Thornton v Shoe Lane Parking [1971] - driver accepts parkade's offer by taking a ticket  

Communications that are both an Offer and an Invitation to Treat - Contract A/Contract B situations

Contract A| Offer| Acceptance| |  |
Contract B| Invitation to treat| | Offer| Acceptance|

* Common in an invitation for tenders
* Whether there is a contract A/contract B depends on the dealings btwn the parties (MJB Enterprises Ltd v Defence Construction (1951) SCC) * Obligations in contract A to unsuccessful bidders don't survive the creation of contract B - contract A is complete once the owner has fairly evaluated bidders, and enters contract B (Double N Earthmovers Ltd v Edmonton [2007] SCC)  

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Canadian Dyers Assn v Burton (1920) HC
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There must be offer & acceptance for a K
Price quotation is usually an invitation to treat
Facts: P offers to sell house. D. asks for lower price. P replies “lowest prepared to accept.” D. accepts, -------------------------------------------------
sends chq. P keeps chq., sends draft of deed & date of closure ® later returns chq. & claims no K Held: P’s quote do not constitute an offer, but his subsequent actions do

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Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] CA -------------------------------------------------
A display of price/goods in a...
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