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Lect. 2.1.1 Offer

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14 views

Lect. 2.1.1 Offer

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akeyah.dore
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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OFFERS

• What is an offer?
– An offer is a manifestation of an intent to be
contractually bound upon acceptance by another
party.
– An offer gives the offeree the power to form a
contract by making an appropriate acceptance.
Form of Offer
• Offers can be
– Express (orally or in writing)
– Implied (through the offeror’s conduct)
• Offers can also form:
– Unilateral Ks (promise in exchange for an act; creates obligations on
one side)
– Note: in the case of a unilateral K, the acceptor does not have to notify the
offerer of his acceptance before performing.
– Bilateral Ks (exchange of promises; creates obligations on both sides)
• Offers can be addressed to:
– One person
– Several persons
– The world at large
• See Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256
What is NOT an offer:
• The following types of communications do not
manifest an intent to be contractually bound,
and thus DO NOT constitute offers:
1) opinions about future results, including professional
opinions
2) statements of intention (including letters of intent,
which merely memorialize negotiations)
What is NOT an offer:
3) Invitations to submit a bid

The process of competitive tendering came under


scrutiny in the following cases:
Harvela Investments v Royal Trust Co. of Canada [1985] 2
All ER 966
Blackpool Aero Club v Blackpool Borough Council [1990] 3
All ER 25
What is NOT an offer:
4) Price Estimates – NB: However, where the estimate is
deemed to be a factual misrepresentation because it was
made by an expert, estoppel may be invoked if the offeree
relied to his detriment on the estimate.
5) Advertisements, catalogs and mass mailings – These are
generally considered an “invitation to treat”, ie, a
statement that invites people to make an offer, but with no
intention to be bound. With an invitation to treat, the
parties are still negotiating. Note: It is generally considered
unreasonable for one to believe that the merchant intends
to be bound to all whom receive or read such literature
unless the power of acceptance is clearly limited to the first
person(s) that fulfills the act for which the incentive is
offered.
What is NOT an offer:
• Advertisements, ctd:
– Is a display of goods an offer?:
• No. Also considered an invitation to treat; note: the customer is the one who
makes the offer
• P.S.G.B. v Boots Chemists [1953] 1 All ER 482
• Fisher v Bell [1960] 3 All ER 731
• Partridge v Crittenden [1968] 2 All ER 421.
– However, advertisements may be construed as offers if they are
unilateral, ie, open to all the world to accept (eg, offers for rewards).
• Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 (previously mentioned).
– A statement of the minimum price at which a party may be willing to
sell will not amount to an offer.
• Harvey v Facey [1893] AC 552
• Gibson v Manchester County Council [1979] 1 All ER 972.
What is NOT an offer:
6) Auctions with reserve –
An auction is "with reserve" unless announced to
the contrary. In an auction with reserve, the
auctioneer (seller) solicits offers in the form of
bid. However, if the auction is announced to be
"without reserve," the auctioneer's request for
bids or his statement that an item will go to the
highest bidder will be deemed an offer.

Payne v Cave (1789) 3 Term Rep 148


When is the offer effective?
• Receipt of offer:
– An offer is not valid until received by offeree or his
agent
When is the offer effective?
• Duration of offer:
– If the offer has a stated time within which the acceptance must be
made, any attempted acceptance after the expiration of that time will
fail and will merely constitute a counter-offer by the offeree.
– If no specific time is stated within which the offeree must accept, it is
assumed that the offeror intended to keep the offer open for a
reasonable period of time, to be determined based on the nature of
the proposed contract, trade usage, prior dealings and other
circumstances of which the offeree knows or should know.
– Generally, the time for accepting an offer begins to run from the time
it is received by the offeree. If there was a delay in delivery of the
offer of which the offeree is aware, the usual inference is that the
time runs from the date on which the offeree would have received the
offer under ordinary circumstances.
When is the offer effective?
• [3] Face to face communications

Generally, courts hold that in telephonic or


face-to-face communications in which an offer
is made, the offer lapses when the
conversation terminates in the absence of a
clear indication that the offer remains open
beyond the conversation.
Counter Offers
• Where the offeree suggests a new term not
included in the original offer, this amounts to
a counter offer.
• A counter offer terminates the original offer;
the offeree can no longer accept it
• During negotiations, the most recent offer is
the only offer that can be accepted
• See Hyde v Wrench (1840) 3 Beav. 334

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