Offer and acceptance Essay

1. Offer a) Offer Defined – The objective test Offer: an expression of willingness to contract on specified terms, made with the intention that it is to become binding as soon as it is accepted by the person to whom it s addressed. An apparent intention to be bound may suffice. The alleged offeror may be bound if: words or conduct induce a reasonable person to believe that he intends to be bound, even if he has no such intention. – The offeree’s state of mind Whether A is actually bound by an acceptance of his apparent offer depends on the state of mind of the alleged offeree B. 1.

B believes that A intends to be bound-> objective test satisfied, B can hold A to his apparent offer even A did not have the intention 2. B knows that A does not have the requisite intention-> A is not bound, objective test is not in favour of B as he knows the truth of A’s intention 3. B has no view about A’s intention, neither believes that A has requisite intention nor knows that A does not have intention-> objective test should not be applied – Conduct as an offer An offer may be addressed either to an individual, a groups of persons, the world at large… and it may be made expressly or b conduct..

A person who had contracted to sell goods & tendered goods-> considered to make an offer by conduct to sell the goods he tendered. ( dispatch of goods without prior request from the recipient-> a gift to him, X an offer to sell) – Inactivity as an offer by conduct When inactivity is combined with other circumstances (eg. Destruction of relevant files), it may on the objective test, amount to an offer of abandonment, even though other circumstances would not constitute evidence from which an offer can be inferred. Inactivity alone is unlikely to have this effect ( turn into an offer) b) Offer Distinguished from Invitation to Treat.

– A test of intention Preliminary communications may pass between parties before a definite offer (eg. Request for information)-> party is said to make an “invitation to treat” -> not make an offer but invites the other party to do so. Whether is an offer or invitation to treat-> depends on intention * eg1: makers not intended to be bound on acceptance, but only when he has signed the document in which statement is contained eg2: wording is not conclusive ( Datec Electronic Holdings Ltd v United Parcels Service Ltd : “offer” of carriage subject to certain restrictions was regarded as an invitation to treat) – Prima facie rules of law.

Certain stereotyped situations in which the distinction is determined ( invitation to treat & offer) by rules of law. – Auction sales General rule: offer is made by the bidder and accepted by the auctioneer when he signifies his acceptance in the customary manner (eg: fall of the hammer). Before acceptance-> bidder can withdraw his bid & auctioneer can withdraw goods There is no contract if the auctioneer by mistake purports to accept a bid lower than the reserve price If auction is without reserve, there is no contract of sale between the highest bidder and the owner of the property if the auctioneer refuses to accept the higgest bid.

– Shop display General rule: display of price-marked goods in a shop window/ shelves of self-service shop -> not an offer but invitation to treat ( retailer can accept/ reject) ^ can be applied to supply of goods, service online, price of petrol to be sold at filling station Argument for the rule: * if display is offer, retailer-> exposed to actions for damages Customer bound to pay for every goods he picked from shelves

– Advertisements of unilateral contracts Advertisements of rewards (.return of lost property, information leading to the arrest of criminals…) are offers. True for other advertisements of unilateral contract. (Carlill v Carolic Smoke Ball Co) (Bowerman v Association of British Travel Agents Ltd) – Advertisements of bilateral contracts.