The document discusses 9 cases related to contract law principles of offer and acceptance: 1) Heathcote Ball v Barry established that the highest bid at an auction without reserve creates a binding contract. 2) Thornton v Shoe Lane Parking determined that terms posted after payment at a parking machine were not incorporated into the contract. 3) Entorres v Miles Far East ruled that acceptance of an offer is effective when received, not when sent. 4) Three additional cases addressed issues like battle of forms negotiations, option agreements, and certainty of terms. 5) Carlill v Carbolic Smoke Ball Company established that advertisements can form binding unilateral contracts when conditions are met. 6

1. ACCEPTANCE CASEs
{business law}
PRESENTED BY:-
Pradeep singha
dsbs

2. Composition Of An Agreement
An agreement is:
• generally characterised by an ‘OFFER’ by one
party and an ‘ACCEPTANCE’ by another

3. Has An Offer Been Made?
• Facts:
• Smith owns an organic farm.
• Jones wants to buy Smith’s farm.
• Jones emails Smith asking: “Will you sell me your farm? Let me
know your lowest price.”
• Smith emails back saying: “The lowest price for my farm is
$350,000.”
• Jones then responds by saying: “I agree to buy your farm for the
sum of $350,000 asked by you.”

4. What Are The Legal Issues?
ISSUE:
• Did one party (the offeror) make an offer?
• Did the other party (the offeree) accept that
offer?

5. Case:1
Heathcote Ball v Barry [2000] EWCA
Civ 235 (Auctions)
• The claimant had submitted the highest (and
only) bids at an auction stated to be without
reserve. The items were two Alan Smart engine
analysers which were worth £14,000. The
claimant had submitted bids of £200 each. The
auctioneer refused to sell them at that price. The
claimant brought an action for breach of contract
claiming damages of £27,600.

6. Judgement
• The claimant was entitled to damages. Where
an auction takes place without reserve the
auctioneer makes a unilateral offer which is
accepted by submitting the highest bid. There
was thus a binding contract and the claimant
entitled to damages covering the loss of
bargain.

7. Case:2
Thornton v Shoe Lane Parking [1971] 2 WLR 585
Court of Appeal (Machines)
• The claimant was injured in a car park partly due to
the defendant's negligence. The claimant was given a
ticket on entering the car park after putting money
into a machine. The ticket stated the contract of
parking was subject to terms and conditions which
were displayed on the inside of the car park. One of
the terms excluded liability for personal injuries
arising through negligence. The question for the court
was whether the term was incorporated into the
contract ie had the defendant brought it to the
attention of the claimant before or at the time the
contract was made. This question depended upon
where the offer and acceptance took place in
relation to the machine.

8. Judgement
• The machine itself constituted the offer. The
acceptance was by putting the money into the
machine. The ticket was dispensed after the
acceptance took place and therefore the
clause was not incorporated into the contract.

9. Case:3
Entorres v Miles Far East [1955] 2 QB 327 Court of
Appeal
• The claimant sent a telex message from England
offering to purchase 100 tons of Cathodes from
the defendants in Holland. The defendant sent
back a telex from Holland to the London office
accepting that offer. The question for the court
was at what point the contract came into
existence. If the acceptance was effective from
the time the telex was sent the contract was
made in Holland and Dutch law would apply. If
the acceptance took place when the telex was
received in London then the contract would be
governed by English law.

10. Judgement
• To amount to an effective acceptance the
acceptance needed to be communicated to
the offeree. Therefore the contract was made
in England.

11. Case:4
Butler Machine Tool v Ex-Cell-O Corporation [1979] 1
WLR 401 Court of Appeal
• Ex-Cell-O wished to purchase a machine from
Butler. Butler sent out a quotation of £75,535
along with a copy of their standard terms of sale.
The terms included a price variation clause and a
term that the seller's terms would prevail over
any terms submitted by a purchaser. The machine
would be delivered in 10 months. Ex-Cell-O put in
an order for the machine at the stated price and
sent a set of their terms which did not include the
price variation clause.

12. Contd…
• The order contained an acknowledgement slip
which required a signature by Butler and was
to be returned to Ex-Cell-O. This slip stated
that the contract would be subject to the
terms stated overleaf. Butler duly signed the
slip and returned it. The machines were then
delivered and Butler sought to enforce the
price variation clause and demanded an extra
£2,893. Ex-Cell-O refused to pay.

13. Judgement
• The offer to sell the machine on terms provided
by Butler was destroyed by the counter offer
made by Ex-Cell-O. Therefore the price variation
clause was not part of the contract. The contract
was concluded on Ex-Cell-O's terms since Butler
signed the acknowledgement slip accepting those
terms. Where there is a battle of the forms
whereby each party submits their own terms the
last shot rule applies whereby a contract is
concluded on the terms submitted by the party
who is the last to communicate those terms
before performance of the contract commences.

14. Case :5
Holwell Securities v Hughes [1974] 1 WLR 155
• Dr Hughes granted Holwell Securities an
option to purchase his house for £45,000. The
option was to be exercisable 'by notice in
writing' within 6 months. Five days before the
expiry, Holwell posted a letter exercising the
option. This letter was never received by
Hughes. Holwell sought to enforce the option
relying on the postal rule stating the
acceptance took place before the expiry of the
option.

15. Judgement
• By requiring 'notice in writing', Dr Hughes had
specified that he had to actually receive the
communication and had therefore excluded
the postal rule.

16. Case:6
Pharmaceutical Society of Great Britain v/s Boots Cash Chemists
(Southern) Ltd [1953]
• Boots Cash Chemists had just a new method for
its customers to buy certain medicines. The
company would let shoppers pick drugs off the
shelves in the chemist and then pay for them at
the till. Before then, all medicines had to be
gotten behind a counter and an assistant had to
get what was requested. The Pharmaceutical
Society of Great Britain objected and argued that
under the Pharmacy and Poisons Act 1933, that
was an unlawful practice.

17. Contd..
Under s 18(1), a pharmacist needed to supervise at
the point where "the sale is effected" when the
product was one listed on the 1933 Act's
schedule of poisons. The Society argued that
displays of goods were an "offer" and when a
shopper selected and put the drugs into their
shopping basket, that was an "acceptance".
Therefore because no pharmacist had supervised
the transaction at this point, Boots was in breach
of the Act. Boots argued that the sale was
affected only at the till.

18. Judgement
• Both the Queen's Bench Division of the High
Court and the Court of Appeal sided with Boots.
They held that the display of goods was not an
offer. Rather, by placing the goods into the
basket, it was the customer that made the offer
to buy the goods. This offer could be either
accepted or rejected by the pharmacist at the
cash desk. The moment of the completion of
contract was at the cash desk, in the presence of
the supervising pharmacist. Therefore, there was
no violation of the Act.

19. Case:7
Sudbrook Trading Estate v Eggleton [1983] AC AC 444
House of Lords
• A lease gave the tenant an option to purchase
the freehold of the property at a price to be
agreed by two surveyors one appointed by the
tenant and one appointed by the landlord.
The tenant sought to exercise the option but
the landlord refused to appoint a surveyor.
The landlord claimed that the clause was too
vague to be enforceable as it did not specify a
price.

20. Judgement
• The clause was not too vague to be
enforceable as it put in place a mechanism to
ascertain the price.
• The agreement must be certain.

21. Case:8
Carlill v Carbolic Smoke Ball Company
• The Carbolic Smoke Ball Company made a
product called the "smoke ball". It claimed to be a
cure for influenza and a number of other
diseases, in the context of the 1889-1890 flu
pandemic (estimated to have killed 1 million
people). The smoke ball was a rubber ball with a
tube attached. It was filled with carbolic acid (or
phenol). The tube would be inserted into a user's
nose and squeezed at the bottom to release
the vapours. The nose would run, ostensibly
flushing out viral infections.

22. Contd..
• The Company published advertisements in the Pall Mall
Gazette and other newspapers on November 13, 1891,
claiming that it would pay £100 to anyone who got sick with
influenza after using its product according to the instructions
set out in the advertisement.
• £100[1] reward will be paid by the Carbolic Smoke Ball
Company to any person who contracts the increasing
epidemic influenza colds, or any disease caused by taking
cold, after having used the ball three times daily for two
weeks, according to the printed directions supplied with each
ball.

23. Facts
• Mrs Louisa Elizabeth Carlill saw the advertisement, bought one of
the balls and used it three times daily for nearly two months until
she contracted the flu on 17 January 1892. She claimed £100 from
the Carbolic Smoke Ball Company. They ignored two letters from
her husband, a solicitor. On a third request for her reward, they
replied with an anonymous letter that if it is used properly the
company had complete confidence in the smoke ball's efficacy, but
"to protect themselves against all fraudulent claims" they would
need her to come to their office to use the ball each day and be
checked by the secretary. Mrs Carlill brought a claim to court. The
barristers representing her argued that the advertisement and her
reliance on it was a contract between her and the company, and so
they ought to pay. The company argued it was not a serious
contract.

24. Judgement
• The Carbolic Smoke Ball Company, despite being represented by HH
Asquith, lost its argument at the Queen's Bench. It appealed
straight away. The Court of Appeal unanimously rejected the
company's arguments and held that there was a fully binding
contract for £100 with Mrs Carlill. Among the reasons given by the
three judges were:
• (1) That the advert was a unilateral offer to all the world
• (2) That satisfying conditions for using the smoke ball constituted
acceptance of the offer
• (3) That purchasing or merely using the smoke ball constituted good
consideration, because it was a distinct detriment incurred at the
behest of the company and, furthermore, more people buying
smoke balls by relying on the advert was a clear benefit to Carbolic
• (4) That the company's claim that £1000 was deposited at the
Alliance Bank showed the serious intention to be legally bound.

25. Case:9
Hyde v Wrench
• Wrench offered to sell his farm in Luddenham to Hyde
for £1200, an offer which Hyde declined. On 6 June
1840 Wrench wrote to Hyde's agent offering to sell the
farm for £1000, stating that it was the final offer and
that he would not alter from it.
• [1] Hyde offered £950 in his letter by 8 June, and after
examining the offer Wrench refused to accept, and
informed Hyde of this on 27 June.
• [2] On the 29th Hyde agreed to buy the farm for £1000
without any additional agreement from Wrench, and
after Wrench refused to sell the farm to him he sued
for breach of contract.

26. Judgement
• Under the circumstances stated in this bill, I think there
exists no valid binding contract between the parties for
the purchase of this property. The defendant offered to
sell it for £1000, and if that had been at once
unconditionally accepted there would undoubtedly
have been a perfect binding contract; instead of that,
the plaintiff made an offer of his own, to purchase the
property for £950, and he thereby rejected the offer
previously made by the defendant. I think that it was
not afterwards competent for him to revive the
proposal of the defendant, by tendering an acceptance
of it; and that, therefore, there exists no obligation of
any sort between the parties.