Offer is defined by Treitel1as an expression of willingness to enter into a contract with intention tocreate legal relation that it shall become binding obligation without any furthernegotiation, Offer can be in different form such as letter, email, newspaperadvertisement, fax and conduct only if offeror is prepared to have a contract.
Offerhas 3 elements, 1: intention/willingness, 2: specified terms (method ofpayment) and 3: no further negotiation. There aretwo types advertisement, 1: bilateral advertisement where both parties startperformance after the formation of the contract, bilateral ads are usually invitation to treat such as sale of goods(adverts in newspaper are bilateral). In the case of Mr. Ishtiaq vs heaven furniture2,Partridge vs Crittenden 19683,Lord Parker CJ stated that these ads are invitation to treat not an offer, thatthere was a business sense in treating such ads as invitation to treat becauseif such ads were to be regarded as offer, the advertiser might find himselfcontractually obliged to sell more goods than necessary.
Fisher vs Bell4 and Boot Cash Chemist 5,where display of goods were to be regarded as invitation to treat not an offer,offer would come from customer to shopkeeper not the other way around. Invitationto treat is all about inviting others to make an offer, as in Gibson vs MCC 19796separates invitation to treat and offer only by a word Intention. Lord denning arguedin Gibson vs MCC 1979 that it’simportant to look at the material of agreements which are exchanged between theparties, he cited in Brogden vMetropolitan Railway 1877 2 AC 6667 that price list in the markets arenothing more than the invitation to treat, it should never be subject to anoffer (Grainger & Son vs Gough 1896AC 325).8Similarly, later in the same year, in ButlerMachine Tool Co Ltd v Ex-Cell-O Corp91979 1 WLR 401. Lord denning argued about the importance of writtendocuments rather than verbal mode. Although Lord Diplock firmly disagreed with lord denning’s viewpoint that acontract alleged to have been made by an exchange of correspondence between theparties. On the facts of the case, there was no need to depart from thetraditional analysis.Basic ruleof agreement is that offer must be communicated, the person who accepts theoffer must know about the offer, performance amounts as acceptance.
Unilateral advertisement is where oneparty start performance before the formation of the contract example; rewards. Unilateral ads are regardedas offer. The leading case on acceptance is Carlil vs carbolic smoke co 189310.An offer can only be accepted if the offeree has knowledge about the offer,one cannot be entitled to any reward if he/she has no knowledge as stated in (R vs Clarke1927)11(Williams vs Carwardine 1833)12( Fitch vs snedeker 1868 )13.
First of all, battleof form14are certain legal formalities in a contract which should be fulfilled, ifparties have agreed on written terms of a contract it may less likely thatthere would be any dispute between the parties or individuals. Lord denningdiscussed battle of form in the case of ButlerMachine Tool Co vs Ex Cell O 197715 “In many of these cases our traditional analysis of offer,counter-offer, rejection, acceptance and so forth is out of date. The betterway is to look at all the documents passing between the parties — and gleanfrom them, or from the conduct of the parties, whether they havereached agreement on all material points — even though there may bedifferences between the forms and conditions printed on the back of them.
” There are few characteristicsof battle of form,1) contract under seal, 2) execution of a deed only to thosecompanies were are not incorporated with companies act, 3) contracts that mustbe in writing ( bill of exchange ) and last but not least 4) contracts thatmust be in writing ( Actionstrenght Ltdvs international glass engineering spa 2003)16. Secondly, Postal Rule is reasonable and some timeit’s not reasonable (Henthorn vs Fraser189217)and in Howell Securities Ltd v Hughes(1974)18 ,the offeror expressly stated that acceptance will only take place once I cometo know about it. The concept of postal rule came from the case of Adam vs Lindsell19 oncethe acceptance letter is posted it will prevail and there will be no withdrawalfrom it. Postal rules only apply to acceptance; other contractual letter can beactive once they are delivered Stevenson,Jacques & Co v McLean (1880)20. Inthe case of Byrne v Van Tienhoven (1880)21if a letter of acceptance were to be lost, acceptance has still taken place. Anexception to this would be if the offeree knows or has reason to know that theletter of acceptance never reached the offeror.
Offer can be terminated by 4 ways,1) revocation as been explained in the case of Offord vs Davies 186222ifthe offeror wishes to withdraw his/her offer he must inform the offeree aboutthe revocation ( Shuey vs USA 1875)23. InDickenson v Dodds 187624,it was ruled that if the offeree knows of revocation, that is sufficient; anexplicit communication does not need to occur and it was also stated thatrevocation can also take place by a third party. There can be counter offersuch as change in terms (Merritt vsMerritt 1970) 25whichfollowed the precedent of Balfour vs Balfour191926 andchange in price (Hyde vs wrench 1840)27. 2) Lapse of Time,if time has been given to accept an offer, the offer must be accepted withinthe time given and if there is not time given then the offer must be acceptedwithin reasonable time. It is a question of fact not law.
Perishable goods haveless time for acceptance. If the offeree provides consideration to keep thetime open then the offeror cannot withdraw his offer until the time expires, example, if the money has been given bythe offeree to keep the offer open for 7 days, case of Routledge vs Grant 18282829 and Mountford vs Scott 197530 , sometimesconsideration of 1pound wouldn’t be enough to increase the time limit of ahouse which is worth 100thousand pounds according to the courts judgment in Mountford vs Scott 197531.3) Death of the party: ifthe offeree dies before accepting the offer, the offer is terminated.
If theofferor dies then offeree can accept the offer provided, he/she had noknowledge about the offeror’s death as stated in Bradbury vs Morgan 186232. 3) Rejection,once the offer is rejected, the offer will perish due to change of price (Hyde vs Wrench 1840)33 Lastly we will discuss the instantaneousmethods of communication which is important for the formation of thecontract. In the case of Entore vs Miles199534, theclaimant sent a telex to the defendant who was in Holland now the question waswhether there was contract made and whether English law would apply or Holland jurisdictionso the lord denning 35reasonedthat once the acceptance is communicated, there shall be a binding contract andit comes in English law jurisdiction because the contract was made in England.He also argued that postal rules don’t apply to instantaneous communication.Instantaneous method includes email,telephone, and fax so on. In the case of Tenax SteamshipCo v Owners of the Motor Vessel Brimnes 197436that instantaneous method apply when the time is reasonable that the defendantshould have read it by now as per lordjustice Megaw ‘I think the principle which is relevant is this: if a noticearrives at the address of the person to be notified, at such a time and by sucha means of communication that it would in the normal course of business come tothe attention of that person on its arrival, that person cannot rely on somefailure…..
businesslike manner in respect of taking cognizance of thecommunication, so as to postpone the effective time of the notice until somelater time when it in fact came to his attention….’. In Brinkibon 198337,the House of Lords said that a telex message sent outside working hours would notbe considered instantaneous.There are three types ofintention to create legal relation, 1) Domesticagreement, Felthouse vs Bindley 186238and Belfour vs Belfour 191939lord Atkins stated that domestic agreement as a matter of public policy areoutside the jurisdiction of the court,2) Social agreement, Coward vs MIB 196340where the courts found that an agreement between friends in exchange ofmoney or material lacks contractual intention.
Last but not least a commercialagreement which is explained the case of Edwards’svs skyways 1964 41thatif a promise or agreement is made in a businesscontext which is a sign of legally binding contract, the claimant will beentitled to the reward or money. Esso petroleum Ltd vs Commissioner ofcustom and excise 197542there was a legal intention so generally the court entertains cases whichare in a commercial context rather than social and domestic. There aretraditional and nontraditional approaches in identifying the agreement.