The key difference referred to is between invitations to treat (ITT) and offers. Shop displays are generally considered ITTs while some advertisements can constitute offers. Under the common law, web advertisements are usually ITTs unless a clear offer is intended. Section 14 of the Electronic Transactions Act treats electronic communications similarly, not changing the common law rules. Website owners should be aware that general web advertisements are unlikely to form binding contracts, and clearly indicate if a communication is intended as an offer instead of ITT.

1. Business Law ProjectOffer and Acceptance By Kelvin Koh Tong Weng (1.1) Tan Jing Ren (1.2) Lee Yan Gen (1.3) Huang Zhongming (2.1) Philip Tai Khan Siong (2.2) JoashGohZhiRong (2.3) 1

2. Qn 1.1 Timeline of Events Letter of Offer sent from “A” to “H” – Terms: RECEIVES Letter of Acceptance by 11am the next day “A” wrote Letter of Revocation at 5pm “A” receives Letter of Acceptance at 9am “A” sold memorabilia to someone else Monday Tuesday “H” posted Letter of Acceptance “H” receives Letter of Revocation at 830am 2

3. Qn 1.1 (a) Advise Hannah on her legal rights, if any. 3

4. Issues (a) Which came first? Acceptance or Revocation? Letter of Offer sent from “A” to “H” – Terms: RECEIVES Letter of Acceptance by 11am the next day “A” wrote Letter of Revocation at 5pm “A” receives Letter of Acceptance at 9am “A” sold memorabilia to someone else Monday Tuesday “H” posted Letter of Acceptance “H” receives Letter of Revocation at 830am 2. Does Postal Acceptance Rule Apply? 4

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6. Analysis and Application Letter of Offer sent from “A” to “H” – Terms: “go ahead with sale at $100,000 if she RECEIVES Letter of Acceptance by 11am the next day” Intention to EXCLUDE Postal Acceptance Rule- Letter of Acceptance only valid upon RECEIPT 6

7. Applying the Exception to PAR rule: The PAR cannot apply when there are express terms in the offer specifying that acceptance must reach the offeror – Holwell Securities Ltd v Hughes (1974) 7

8. Qn 1.1 Timeline of Events Letter of Offer sent from “A” to “H” – Terms: RECEIVES Letter of Acceptance by 11am the next day “A” wrote Letter of Revocation at 5pm “A” receives Letter of Acceptance at 9am “A” sold memorabilia to someone else Monday Tuesday “H” posted Letter of Acceptance “H” receives Letter of Revocation at 830am 8

9. Analysis and Application Letter of Offer sent from “A” to “H” – Terms: “go ahead with sale at $100,000 if she RECEIVES Letter of Acceptance by 11am the next day” *Receipt of: LOR – 830am LOA – 900am Offer REVOKED before accepted Intention to EXCLUDE Postal Acceptance Rule- Letter of Acceptance only valid upon RECEIPT 9

10. Conclusion The letter of revocation came into effect BEFORE the letter of acceptance. Thus, Hannah would not be in a strong legal position to sue Alyson for breach of contract. 10

11. Qn 1.1 (b) Would it make any difference to your answer if the letter from Alyson to Hannah withdrawing the offer had been received by the latter at 9.30am instead of 8.30am? 11

12. Issues (b) What if the Letter of Revocation is received 1 hour later? Letter of Offer sent from “A” to “H” – Terms: RECEIVES Letter of Acceptance by 11am the next day “A” wrote Letter of Revocation at 5pm “A” receives Letter of Acceptance at 9am “A” sold memorabilia to someone else Monday Tuesday “H” posted Letter of Acceptance “H” receives Letter of Revocation at 930am 12

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14. Analysis and Application *Receipt of: LOA – 900am(in effect) LOR – 930am (too late) Offer was ACCEPTED before being revoked Contract comes into existence when “A” received Letter of Acceptance from “H” because…. 14

15. Conclusion (b) The situation would be the exact opposite if the letter of revocation was received at 9.30am instead of 8.30am. In that situation, the contract would have come into existence at 9am, and Hannah would be in a legal position to sue Alyson for breach of contract 15

16. Timeline of Events Qn 1.2 b. Fax received by “K” at 10.45am. Read at 5pm a. Er” faxed to “K” to tell him offer of 1 Nov withdrawn Letter of Offer sent from “Er” to “K” – Terms: $50,000 contract. Reply by post c. “K” posted Letter of Acceptance at 11am 1Nov 5 Nov 4 Nov 6 Nov “Er” counter offered a contract of $40,000 that was accepted by “Ed” and in place “Ed” offered “Er” contract for $30,000 16

17. Qn 1.2 (a) Advise Erwin, Kevin and Edgar of their legal positions. 17

18. Issues (a) “K” letter of acceptance or “Er” letter of revocation occurred first? b. Fax received by “K” at 10.45am. Read at 5pm a. Er” faxed to “K” to tell him offer of 1 Nov withdrawn Letter of Offer sent from “Er” to “K” – Terms: $50,000 contract. Reply by post c. “K” posted Letter of Acceptance at 11am 2. Was contract between “Er” and “Ed” valid? 1Nov 5 Nov 4 Nov 6 Nov “Er” counter offered a contract of $40,000 that was accepted by “Ed” and in place “Ed” offered “Er” contract for $30,000 18

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20. Analysis and Application- “Er” and “K” However, Letter of Revocation received by “K” at 1045am on fax machine – This precedes the sending out of Letter of Acceptance. Applying the rule from the case “The Brimnes”, it doesn’t matter whether it is read or not. Letter of Acceptance sent by POST from “K” to “Er” on 6th Nov @ 11am - Applying “Postal Acceptance Rule”, acceptance happens right after letter is posted 20

21. Timeline of Events Qn 1.2 b. Revocation Fax received by “K” at 10.45am. Read at 5pm a. Er” faxed to “K” to tell him offer of 1 Nov withdrawn (revoke) Letter of Offer sent from “Er” to “K” – Terms: $50,000 contract. Reply by post c. “K” posted Letter of Acceptance at 11am 1Nov 5 Nov 4 Nov 6 Nov “Er” counter offered a contract of $40,000 that was accepted by “Ed” and in place “Ed” offered “Er” contract for $30,000 21

22. Analysis and Application- “Er” and “K” However, Letter of Revocation received by “K” at 1045am on fax machine – This precedes the sending out of Letter of Acceptance. Applying the rule, it doesn’t matter whether it is read or not. Letter of Acceptance sent by POST from “K” to “Er” on 6th Nov @ 11am - Applying “Postal Acceptance Rule”, acceptance happens right after letter is posted Thus, no contract for “K” to accept since Letter of Revocation is in effect 22

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24. Analysis and Application- “Er” and “Ed” Thus, the contract between Erwin and Edgar valid and is binding 24

25. Conclusion (a) For the attempt at establishing a contract between Erwin and Kevin, since the letter of revocation from Erwin to Kevin comes into effect before the letter of acceptance from Kevin to Erwin, the contract is void, and the two parties are not contractually bound. The contract between Erwin and Edgar is binding from the information given in the case. 25

26. Qn 1.2 (b) What would your answer be if 6 November was a non‐working weekend? 26

27. Issues (b) b. Fax received by “K” at 10.45am. Read at 5pm a. Er” faxed to “K” to tell him offer of 1 Nov withdrawn Letter of Offer sent from “Er” to “K” – Terms: $50,000 contract. Reply by post c. “K” posted Letter of Acceptance at 11am 1Nov 5 Nov 4 Nov 6 Nov “Er” counter offered a contract of $40,000 that was accepted by “Ed” and in place 1. Will the case be altered if 6 Nov is a non-working weekend? “Ed” offered “Er” contract for $30,000 27

28. 3. Postal Acceptance Rule: Acceptance by post takes place when the Letter of Acceptance is posted - Adams v Lindsell (1818) 28

29. Analysis and Application- Non-Working Hours Applying “Brinkibon Ltd v Stahag Stahl und Stahlwarenhandels GmbH (1983)” If it was a non-working weekend, communication would not be considered instantaneous Apply working hours to GIVE business efficacy to the contract – The Moorcock (1889) Revocation letter deemed received at start of following Monday instead of weekend Therefore, when we apply the Postal Acceptance Rule, the Letter of Acceptance comes into effect on 6 Nov before the revocation was communicated and takes effect 29

30. Conclusion (b) Yes, the conclusion of the case will be different. If 6 November was a non-working weekend, the letter of revocation would be deemed to have been received after the letter of acceptance had been posted out, and Erwin and Kevin would be contractually bound. 30

31. Qn 1.2 (c) What is your opinion if Erwin had withdrawn the offer by e‐mail instead, which was sent at 10.45am but received at 11.15am? 31

32. Issues (c) c. Email sent by “Er” at 1045am and received by “K” at 1115am a. “Er” faxed to “K” to tell him offer of 1 Nov withdrawn Letter of Offer sent from “Er” to “K” – Terms: $50,000 contract. Reply by post b. “K” posted Letter of Acceptance at 11am 1Nov 5 Nov 4 Nov 6 Nov “Er” counter offered a contract of $40,000 that was accepted by “Ed” and in place 1. Will the case be altered if revocation is sent by email at 1045am but received at 1115am? “Ed” offered “Er” contract for $30,000 32

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34. Analysis and Application- “Er” and “K” However, Letter of Revocation received by “K” at 1115am on by email Applying the rule from the case “The Brimnes” – This is after the sending out of Letter of Acceptance. Letter of Revocation does not take effect but Letter of Acceptance does Letter of Acceptance sent by POST from “K” to “Er” on 6th Nov @ 11am - Applying “Postal Acceptance Rule”, acceptance happens right after letter is posted Thus, “Er” and “K would be contractually bound 34

35. Issues (c) c. Email sent by “Er” at 1045am and received by “K” at 1115am a. “Er” faxed to “K” to tell him offer of 1 Nov withdrawn Letter of Offer sent from “Er” to “K” – Terms: $50,000 contract. Reply by post b. “K” posted Letter of Acceptance at 11am 1Nov 5 Nov 4 Nov 6 Nov “Er” counter offered a contract of $40,000 that was accepted by “Ed” and in place 1. Will the case be altered if revocation is sent by email at 1045am but received at 1115am? “Ed” offered “Er” contract for $30,000 35

36. Conclusion (c) If the notice of revocation had been sent by email and had been received at 11.15am, the letter of acceptance would have been posted before the notice of revocation was received, and Erwin and Kevin would be contractually bound. 36

37. Timeline of Events Qn 1.3 a. Palin makes Nicki an offer b. No reply by Thurs means no Nicki calls Palin up, but bag is gone Monday Thursday Wednesday Palin makes Glenda same offer, she accepts 37

38. Qn 1.3 (a) Does Nicki have any right of action for breach of contract against Palin? 38

39. Issues (a) 1. Is Palin obliged to keep offer open until Thurs? a. Palin makes Nicki an offer b. No reply by Thurs means No Nicki calls Palin up, but bag is gone Monday Thursday Wednesday Palin makes Glenda same offer, she accepts 39

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42. Analysis and Application- “Palin” and “Nicki” Byrne v Van Tienhoven - Effective revocation needs to be properly communicated Therefore Palin is contractually bound Palin did NOT communicate any revocation notice 42

44. Offer still in existenceNicki would be in a legal position to sue Palin for breach of contract 43

45. Qn 1.3 (b) What if Nicki told Palin instead that if she did not reply by Thursday, that means that she would be able and willing to buy the bag? 44

46. Issues (b) 2. Is silence a valid form of acceptance? a. Palin makes Nicki an offer b. No reply by Thurs means Yes Nicki calls Palin up, but bag is gone Monday Thursday Wednesday Palin makes Glenda same offer, she accepts 45

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48. Analysis and Application- “Palin” and “Nicki” Re Selectmove Ltd If Nicki (offeree) indicates silence as willingness to buy… Acceptance by silence is valid, since offeree made this request Nicki will be requesting for acceptance by silence 47

51. However, facts of the case remain unchangedNicki would still be in a legal position to sue Palin. 49

52. Qn 1.3 (c) How can Nicki ensure that Palin will keep the offer open only to her up till the end of Thursday? 50

53. Issues (c) 3. How may Nicki bind Palin to keeping offer open until Thurs? a. Palin makes Nicki an offer b. No reply by Thurs means No Nicki calls Palin up, but bag is gone Monday Thursday Wednesday Palin makes Glenda same offer, she accepts 51

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56. Such consideration may be furnished by ‘buying an option’, e.g. making a token payment53

57. Conclusion (c) If Nicki provided some form of consideration e.g. through buying a contract, Palin would be contractually obliged to keep offer open until Thurs 54

58. Qn 2.1 “For the purposes of offers, the law distinguishes shop displays from certain advertisements. It is therefore essential that those who wish to contract over the Internet understand this difference.” (per Clive Gringras, “The Laws of the Internet”). What in your view is this “difference” which the author is referring to and how would knowing such information impact upon the way owners of websites create their web advertisements? You may wish to consider the factual scenario below to assist you in your answer: A web site that offers advertising space to vendors/sellers runs a promotion. The advertisement reads, “If you visit our website four times this month and do not buy anything from our vendors, we will credit S$10 to your bank account”. What is the effect of section 14 of the Electronic Transactions Act (2010) and does it change the current common law rules distinguishing ITT and offer in any way? 55

59. Qn 2.1 “For the purposes of offers, the law distinguishes shop displays from certain advertisements. It is therefore essential that those who wish to contract over the Internet understand this difference.” (per Clive Gringras, “The Laws of the Internet”). What in your view is this “difference” which the author is referring to and how would knowing such information impact upon the way owners of websites create their web advertisements? You may wish to consider the factual scenario below to assist you in your answer: A web site that offers advertising space to vendors/sellers runs a promotion. The advertisement reads, “If you visit our website four times this month and do not buy anything from our vendors, we will credit S$10 to your bank account”. What is the effect of section 14 of the Electronic Transactions Act (2010) and does it change the current common law rules distinguishing ITT and offer in any way? 56

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62. What is the relevance and impact of these differences on web advertisements? 59

64. What is the relevance of this? Email confirmation Immediate and Automated Acceptance 61

65. Acceptance is usually by automated email confirmation right after purchase Impact: Risk of buyer construing web advertisements as Offer to sell unlimited quantity of goods when web merchants only have limited stock Therefore, web merchants would need to specify qualifying conditions and “escape clauses” 62

66. The advertisement reads, “If you visit our website four times this month and do not buy anything from our vendors, we will credit S$10 to your bank account”. No instructions (Ambiguous) Invitation to Treat 63

67. Section 14 of the Electronic Transactions Act applies the common law position to the internet, establishing that internet advertisements and interactive online purchase systems are considered invitations to treat unless the language specifically indicates the intention of the party making the proposal to be bound once the proposal is accepted. The purchaser would thus be the offeror, and the web merchant would be the offeree. Affirms common law 64

68. Qn 2.2 Using the services of a Search Engine (Google or Yahoo!) or open/public news portal (e.g. www.channelnewsasia.com) – Who are the parties involved in the process and is there Offer and Acceptance? If there is, what makes it appear (fact) and what legal reasoning (law) can you give that the use of such websites is contractual in nature or otherwise? Explain.

69. Who are the parties involved? Users Web Developers

70. Issues Does an offer exist? What constitutes acceptance? What kind of contract?

74. You may not use the Services if you do not accept the Terms.

75. You can accept the terms by actually using the Services.

76. In this case, you understand and agree that Google will treat your use of the Services as acceptance of the Terms from that point onwards.

81. You may not use the Services if you do not accept the Terms.

82. You can accept the terms by actually using the Services. (acceptance by conduct)

83. In this case, you understand and agree that Google will treat your use of the Services as acceptance of the Terms from that point onwards.

85. It is an exchange of the service providers’ promise to provide the said services in exchange for the user’s promise to abide by the terms and conditions outlined in the terms of service BothOfferee and Offeror enforces contract

87. Mode of acceptance is clearly specified

88. Consideration in place

89. Intention to create legal relations is clearly evidentThus, a user would be obliged to abide by his contractual obligations laid out in the terms of service.

90. Conclusion Contract concluded is a bilateral contract, a promise in return for a promise

91. break. 79

92. Qn 2.3 a) What is your understanding of the “objective test” to contract law formation issues? b) What is its relevance and why is it necessary to have such a test? c) What is the role and function of the test? d) Finally, in your opinion, is the “subjective test” more or less desirable a test? Use examples and give reasons for your answer. 80

93. Qn 2.3 a) What is your understanding of the “objective test” to contract law formation issues? 81

94. Qn 2.3 82

95. Qn 2.3 b) What is its relevance and why is it necessary to have such a test? 83

96. Qn 2.3 84

97. Qn 2.3 85

98. Qn 2.3 86

99. Qn 2.3 c) What is the role and function of the test? 87

100. Qn 2.3 88

101. Qn 2.3 d) Is the “subjective test” more or less desirable a test? 89

102. Qn 2.3 90

103. Qn 2.3 91

104. Qn 2.3 92

105. end. questions? 93