Professional Documents
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What is an offer?
invitation to a person(s) to enter an agreement on certain terms
What is an acceptance?
agreement to contract on the terms specified in the offer
Invitation to treat:
statement inviting offers
Counter-offer:
an offer made in response to an offer
a counter-offer kills the offer
Offeror:
person who makes an offer
Offeree:
person to whom an offer is made
The policy behind the Offer and Acceptance analysis is that there must
have been consensus ad idem a meeting of minds between the
parties before they will be held bound to an agreement, ie:
the offeree knew what the offeror proposed before accepting the
offer; and
the offeror was aware that the offeree had accepted the offer
Note that all terms of the offer must be brought to the offerees notice
Auction sales:
calling for bids:
invitation to treat
bids:
offers
bringing down the hammer:
acceptance
Tenders:
advertisement calling for tenders
invitation to treat
tenders received
offers
2015 Thomson Legal & Regulatory Ltd. All Rights Reserved.
PowerPoint slides to accompany Davenport & Parker Business and Law in Australia 2nd ed 2015
Rules as to Offer Withdrawal
An offer can be withdrawn:
at any time prior to acceptance by communication to the offeree
note dates in Byrne & Co v Leon Van Tienhoven (1880):
offer by letter sent 1 October
offer withdrawn on 8 October
offer received and accepted by telegram on 11 October
offer accepted by letter on 15 October
withdrawal of offer received on 20 October
unless the offeror has contracted (ie consideration) to keep the offer open:
Goldsbrough, Mort & Co Ltd v Quinn (1910): G paid Q 5/- for right to purchase
property within a week but before the week was up Q tried to withdraw the offer
An offer expires:
if not accepted within the time stipulated in the offer (or within a
reasonable time)
Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1957): a lease
contained an option to renew on the basis that rent was paid
on time it hadnt been although the landlord hadnt
complained
Acceptance:
must be in reliance on the offer:
R v Clarke (1927): C, arrested and charged with a murder for which
a reward had been offered, gave information voluntarily leading to
the arrest and conviction of the real murderer and claimed the
reward
Gave information during police investigation and to secure his own release
must be within the time set (or a reasonable time if none is stated):
Ramsgate Victoria Hotel Co v Montefiore (1866): M wrote to a RVH
offering to buy shares but the company took 5 months to reply
accepting Ms offer
unless:
acceptance is by conduct:
Carlill v Carbolic Smoke Ball Co: use of smoke ball
Satellite Pty Ltd, a marketing firm, has decided to introduce a new business
method for marketing CDs to consumers containing a contract stating that
the CDs cost $27 each, that payment should be remitted to Satellites Post
Office Box address if the consumer wishes to keep the CD, otherwise the
CD must be returned. The contract also states, in small print, that should a
consumer fail to either return the CDs, or remit payment within 30 days, the
company would commence legal proceedings to recover the $27.
Advise Satellite as to its right to recover the price of each CD from
consumers who fail to return the product.
Has that offer been accepted? How was acceptance to take place?
Is there agreement?