Question 1

Abi tells her friends Bob and Chris that she will sell her car to either of them if the
price is right. Soon afterwards, Abi receives a letter from Chris, saying that he would
like to buy her car for 7. Abi sends Chris an email and says that she wants !
for her car and that she needs to know his answer by " #ay. $n % #ay, Chris posts a
letter to Abi, agreeing to a price of ! for her car. $n " #ay, Abi receives an email
from Bob, saying that he would like to buy her car for &. Abi immediately replies,
asking whether Bob would consider paying !. Bob does not respond. Abi sends
another email to Bob and says that she agrees to sell him her car for &. $n '
#ay, Abi receives Chris( letter.
Advise Abi.
SEMESTER ESSAY: PROBLEM QUESTION
For a contract to be enforceable there needs to be an offer, an acceptance, an intention to
create legal relations and good consideration. These are the issues raised by this problem. I
will therefore start by discussing whether Abi made an offer. Then, I will analyze the
enforceability of each contract, with Chris then with Bob.
I. Did Abi make an offer or an inviaion o rea !:
a- hy is this distinction important!
The distinction is ambiguous but essential because accepting an offer creates a binding
contract, whereas replying to an in"itation to treat is actually ma#ing an offer. The courts ha"e
to determine if the potential offeror really had the intention to be legally bound. If that is the
case, his statement will be a binding offer. $therwise, it will only show a will to recei"e offers
from other parties. Therefore, ma#ing this distinction is crucial since an offer is one of the
re%uirements of an enforceable contract.
b- &ow do courts ma#e this distinction!
'
In order to ad"ise Abi, it is important to #now whether her statement is an in"itation to
treat or an offer. hen analyzing such a problem, courts will loo# at the "ocabulary used and
will analyze the intention the statement con"eyed. For e(ample, according to the courts, the
terms of a contract should always be une%ui"ocal
'
.
c- )id Abi ma#e an offer!
In this case, I thin# Abi did not intend to be legally bound* she was +ust willing to
recei"e an offer and enter in the negotiation process. In fact, her statement is hesitant and
"ague. An offer would be e(plicit and precise, for e(ample by stating a possible price or a
limit to its "alidity. &ere, it should be noted that she is "oluntarily "ague about the amount of
money she e(pects in e(change of her car ,it only has to be -right./ and that her use of the
word -if. confirms how uncertain she is. I therefore belie"e that the court0s +udgment in
&ar"ey " Facey
1
applies because it ma#es clear that an offer should be made in unambiguous
terms. According to me, Abi0s indecision is the sign that she is ma#ing an in"itation to treat
and not an offer.
II. "#a i$ Abi%$ &e'a& re&aion$#i( o )#ri$!
a- Chris0 reply to Abi0s in"itation to treat
2ince Abi0s statement is an in"itation to treat, Chris0 letter is an offer. Because he is
replying to an in"itation to treat, Chris0 intentions are ob"ious3 he enters into the bargaining
process, he accepts to be legally bound with Abi. 4oreo"er, he clearly suggests a potential
price, which ma#es his letter an e(plicit statement "alid as an offer.
b- Abi0s counter-offer
5wan 4c6endric# specifies that the offer0s -terms must be accepted by the party to
whom the offer is addressed.
7
. In order for a contract to e(ist there needs to be -a concluded
agreement.
8
, so that the -mirror image rule. ,-un%ualified assent to the offer.
9
/ can be
applied. hen Abi recei"es Chris0s offer, she is not satisfied by the amount of money he is
willing to pay. 2he replies saying that she wants :;; pounds for her car and that she e(pects
'
2ee Scammell v Ouston <':8'= A.C. 19'
1
2ee >ord 4orris in Harvey v Facey <'?:7= A.C. 991
7
5. 4c6endric#, Contract Law eighth edition ,@algra"e 4acmillan, 1;;:/ 1A
8
Bomer C. in Jones v Daniel <'?:8= 1 C& 771
9
Adams and Brownsword, Understanding Contract Law fifth edition ,2weet and 4a(well,1;;D/ 9D
1
Chris to gi"e his final answer by 4ay 9
th
. Therefore she ma#es a counter-offer, she changes
the terms of Chris0 initial offer and this -#ills the original offer.
A
. &er %ualified acceptance
then amounts to a new offer.
c- Chris0 acceptance
Chris sends his acceptance letter on 4ay 8
th
but Abi recei"es it on 4ay A
th
. After two
decisions of the courts
D
the postal acceptance rule stipulated that -the acceptance is
completed as soon as it is posted.
?
. Ee"ertheless, Abi had specified that she wanted to #now
Chris0 answer before 4ay 9
th
, conse%uently a"oiding the operation of the rule by stating that
the acceptance will only be effecti"e when it reaches her. Therefore, I thin# it is an e(ception
to the postal acceptance rule and that there is no contract between Abi and Chris.
III. "#a i$ Abi%$ &e'a& re&aion$#i( o Bob!
a- Bob0s reply to Abi0s in"itation to treat
&ere again, Bob replies to an in"itation to bargain, so he ma#es an offer. >i#e Chris, he
e(plicitly says that he would li#e to buy Abi0s car and suggests a price, ?;; pounds. &is
intentions are clearly mentioned. &ence, I would say that Bob made an offer to Abi.
b- Abi0s response to Bob0s offer
In this case, I thin# Abi only made an in%uiry concerning Bob0s offer. In Stevenson,
Jaues ! Co v "cLean
#
, the court e(plained that a simple in%uiry on whether the offeror
would change the terms of his offer will not amount to a counter-offer. It is clear to me that
Abi was not ma#ing a counter-offer when as#ing whether Bob -would consider. paying a
greater sum. A counter-offer, li#e the one she addressed to Chris, would ha"e left no choice to
Bob.
c- Bob0s silence and Abi0s acceptance
Abi recei"es no answer from Bob. 2ince, according to me, Abi0s answer to Bob0s offer
was not a counter-offer, Bob0s silence cannot be interpreted as an acceptance.
Finally, Abi chooses to accept Bob0s offer and agrees to sell him the car for ?;; pounds. It
is a clear and unambiguous acceptance of the offer0s terms.
4oreo"er, in my opinion, good consideration is pro"ided. In fact, there is a "aluable
element mo"ing from promisee to promisor, Abi0s car being an item of economic "alue. For
these reasons, I would say that Abi is legally bound by contract to Bob.
A
4egaw C in $rollo%e Ltd v &tomic 'ower Constructions Ltd <':A7= ' >B 777
D
&dams v Lindsell <'?'?= 5&C 6B C9: and Henthorn v Fraser <'?:1= 1 Ch 1D ,CA/
?
2ee >ord &ershell in Henthorn v Fraser <'?:1= 1 C& 1D ,CA/
:
Stevenson, Jaues ! Co v "cLean ,'??;/ >B 9 FB) 78A
7
)on*&+$ion:
Abi a"oided the postal acceptance rule by inserting a specific clause in her offer and
formed a "alid contract with Bob.
Bib&io'ra(#,
@rimary sources3
- &dams v Lindsell <'?'?= 5&C 6B C9:
- Harvey v Facey <'?:7= A.C. 991
- Henthorn v Fraser <'?:1= 1 C& 1D ,CA/
( Jones v Daniel <'?:8= 1 C& 771
- Scammell v Ouston <':8'= A.C. 19'
( Stevenson, Jaues ! Co v "cLean ,'??;/ >B 9 FB) 78A
- $rollo%e Ltd v &tomic 'ower Constructions Ltd <':A7= ' >B 777
2econdary sources3
- Adams and Brownsword, Understanding Contract Law fifth edition ,2weet and
4a(well,1;;D/ chapters four and fi"e
- 4c6endric#, Contract Law eighth edition ,@algra"e 4acmillan, 1;;:/ chapters two,
three and fi"e
8