This document discusses the formation of a contract through offer and acceptance. It addresses whether an offer has been made, what constitutes a valid acceptance, and how an offer can be terminated. Key points include that a binding contract is formed as soon as a valid offer is accepted, an acceptance must be communicated to be effective, and an offer can be revoked before acceptance by communicating the revocation to the offeror. The document also notes exceptions to these general rules around offer and acceptance.

1. Asif Tufal
FORMATION OF A CONTRACT
OFFER AND ACCEPTANCE
Has the offeror made an or, an invitation to treat? ie,
offer?
1. Auctioneer’s call for bids: Payne v Cave
2. Display of goods:
Fisher v Bell
PSGB v Boots
3. Advertisement:
Yes. Binding contract as
Partridge v Crittenden
soon as it is accepted by the
(except unilateral adverts: Carlill v Carbolic Smokeball)
offeree.
4. Mere statement of price:
Harvey v Facey
Gibson v Manchester CC
Has there been an unqualified 5. Tender
acceptance?
But note the approach in:
Brogden v Metropolitan Railway
Gibson v MCC
Percy Trentham v Archital Luxfer No contract
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2. Asif Tufal
But may actually be a mere
Yes No, if … 1. Counter-offer: request for more
Hyde v Wrench information: Stevenson v
McLean, or a
2. Conditional acceptance “battle of the forms” issue:
Butler Machine Tool v
Excell-O-Corp
1. Acceptance must be communicated:
Entores v Miles Far East Corp
2. By an authorised person: Powell v Lee
3. Silence does not amount to Exceptions to the Postal
communication: a) Unilateral contracts Rule:
Felthouse v Bindley b) Expressly/impliedly i) Letter not properly posted
Exceptions to the waived ii) Letter not properly
4. Instantaneous communication effective communication rule c) Postal Rule: addressed
when and where received: Adams v Lindsell iii) Postal rule excluded:
Entores v Miles Far East Corp Household Fire Ins v Grant Holwell Securities v Hughes
The Brimnes iv) “manifest inconvenience
Brinkibon v Stahag Stahl or absurdity”
Can a posted acceptance be
Must a prescribed method Must there be knowledge of What if there was a “cross- revoked by quicker means?
of acceptance be adhered the offer? offer”?
to? See: a) Acceptance for reasons No contract according to Scotland – possibly
Holwell Securities v Hughes other than the offer is Tinn v Hoffman Commonwealth – no:
Tinn v Hoffman ineffective: R v Clarke Wenkheim v Arndt
Yates Building v Pulleyn b) If offer plays some part AZ Bazaars v Ministry of
then valid acceptance: Agriculture
Williams v Carwardine
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3. Asif Tufal
TERMINATION OF THE OFFER
Has the offer been terminated
by …
Acceptance Binding contract
Rejection
Revocation must be communicated or it
Revocation is ineffective:
Byrne v Van Tienhoven
Either personally or by a reliable third
party: Dickinson v Dodds
Counter-offer:
Hyde v Wrench Or, by taking reasonable steps if offer
made to the whole world: Shuey v US
Lapse of time:
Ramsgate Hotel v Montefiore
However, if unilateral offer accepted
by performance, it cannot be revoked:
Errington v Errington
Failure of conditions: Daulia v Four Millbank Nominees
Financings Ltd v Stimson
Death, unless lack of knowledge
and no personal element
involved:
Bradbury v Morgan
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