Business Notes: Law – Contractual Offers

Requirements of Contractual OFFERS

In order to be capable of acceptance it must be:

  1. INTENDED to be an offer.
  2. Definition of ‘Offer’ – Declaration by offeror by which he intends to be legally bound if his terms are accepted by the offeree.
  3. Be CERTAIN – It must be possible for the ‘offeree’ to know what his rights and obligations will be if he ‘accepts’ the offer
  4. And be COMMUNICATED to the offeree – if the offeree doesn’t know about it he can’t accept it.
  5. Must not have been TERMINATED – an offer can’t be accepted once it has been terminated/ an offer can’t be terminated once it has been accepted

The Difference between an Offer and an Invitation to Treat

Definition of ‘Offer’ – Declaration by offeror by which he intend to be legally bound if his terms are accepted by the offeree.

Therefore it depends upon the intention, for judicial guidelines see:

Boots Chemist Case (Pharmaceutical Society of GB v Boots Cash Chemist 1953)
The display on the shelf was only an invitation to treat (I to T), customer then made an offer to which the cashier can then accept or reject. This results in Boots NOT being ‘guilty’ as the sale was complete bu the cashier with a pharmacist present.

Fisher v. Bell for guidelines in accordance to shop displays
The defendant wasn’t ‘guilty’ as there is no offer for sale as the display is an Invitation to Treat.

Partridge v. Crittenden for guidelines in accordance to adverts.
The defendant is not ‘guilty’ as he’s not offering to sell he’s offering an Invitation to Treat. This is because he’s not making an offer to sell, the buyer is offering to purchase.

Other cases to look at:

Carill v Carbolic Smoke Ball Company 1893
The court held that the wording of the advert showed sufficient intention to make it an offer contrary to the general guideline laid down in Partridge v Crittenden.

Gibson v Manchester City Council 1979
Due to the wording there was no contract made.

Why Is It Necessary To Identify The Parties

  • It is the Offer’s terms that govern the contract
  • It is the action of the offeree that concludes the contract (Both bound at this point)
  • It is the country in which the acceptance becomes effective which determines the applicable law (Can be stated a ‘Proper’ law ie country)

Termination of a Contractual Offer

  1. Refusal/Rejection – Once an offer is refused it is then terminated, the offeree cannot then change his/her mind and accept if they do then they will actually be making a new offer.
  2. Counter Offer – If the offeree attempts to accept, but introduces new or different terms, this is a counter offer, and the other party can then choose whether they wish to accept or reject it.
  3. Revocation – The offeror can withdraw his/her offer at anytime before valid acceptance has occured, provided: Revocation is communicated to the offeree and the offeree has not purchased an option
  4. Time Lapse – If no time for acceptance is stated, the offer will lapse after a ‘reasonable’ time; this will depend upon the nature of the commodity.
  5. Death – The death of a specific offeree will terminate the offer as only he/she could have accepted it. The death of the offeror will only terminate the offer if the offeree was aware of it before he accepted, otherwise the offeror’s personal representatives must carry out the contract, unless it is for personal services.
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