I. Indicate whether each of the following statements is TRUE or FALSE, and EXPLAIN why? Phrase True False 1 An agreement cannot occur unless there is an offer and acceptance of that offer 2 An invitation to treat is an invitation to buy a bargain 3 Goods on display in a supermarket are being offered for sale 4 An acceptance is not valid unless the offeree knows about the offer and has it in mind 5 An offer is rejected if the offeree tries to vary the conditions of the offer 6 When instantaneous communication is used, a contract is made as soon as the offer is sent 7 When parties communicate by fax, acceptance cannot occur until the offeror has read the acceptance 8 An offeree who intends to accept an offer can accept through silence 9 A revocation is not valid unless it is received by the offeree 10 Under the postal rule an offer is accepted when an acceptance is posted 11 A revocation by post is valid as soon as the letter is posted 12 An offer will lapse if it is not accepted within a specified or reasonable period of time 13 An offer will lapse if the conditions of the offer are not satisfied
II. Typical cases in law reports of contract- Find out rules from the following case: a) Byrne& Co v Van Tienhoven& Co (1880) 5 All ER 344 1st October Cardiff firm offered by letter to sell 1000 boxes of tinplates to New York firm 8th October Cardiff firm posted letter revoking their offer 10th October New York firm received the letter of offer 11th October New York firm telegraphed acceptance of the offer 15th October New York firm posted a letter confirming its telegraphed acceptance 20th October New York firm received letter of revocation from Cardiff firm Did the acceptance occur?
1 b) Entores Ltd v Miles Far East Corp (1959) 2 QB 327 A London firm used a telex machine (an early version of a fax machine) to communicate its offer to buy goods from a company in Amsterdam. The Amsterdam company accepted by telex. Subsequently, when the parties fell into dispute, they disagreed as to where and when the contract had been made and which law should apply. Your answers c) Hyde v Wrench (1840) 3 Beav 334 1 June Wrench offered to sell estate to Hyde for £1200 2 June Hyde rejected the offer 6 June Wrench offered to sell for £1000 8 June Hyde replied, offering £ 950 27 June Wrench rejected 28th June Hyde attempted to accept the £1000 offer . Was Wrench bound to sell at £1000
III. Case Study:
1. On Friday 27th Nov. Buyer sends a telex to Seller offering to buy 1,000 tonnes of sugar at the current market price. The telex is received in Seller’s offices after a short delay at 5 pm. Since the telex operator has gone home for the weekend, Seller posts a letter in the last post on Friday, accepting the offer. This reaches Buyer at 2.30 pm on Monday 30th Nov. Meanwhile, at 9.30 am on 30th Nov. Buyer sends a further telex to Seller withdrawing his offer. This reaches Seller and is read by him immediately at 9.45 am on 30th Nov. Seller now seeks your advice. Advise Seller.
2. Smart, a young sales representative employed by Speedy Ltd, a company manufacturing
computers, visits Wiley, a partner in Wiley and Fox, solicitors, with a view to selling a new computer to the firm. In the course of conversation, Smart, being desperate to make his first sale for several days, offers the machine at £300 less than the normal selling price. Wiley says that he will consult Miss Dragon, the head of the computer department, and let Smart have an answer by letter in a few days. On returning to the area sales office Smart realizes that although he has authority to give special prices he might have been unduly generous in his offer to Wiley. Accordingly he consults Allick, the area sales manager, who is not prepared to sell the computer at the price at which Smart has offered it. Smart rings Wiley immediately but is unable to speak to him or any of the other partners in the firm – even Miss Dragon is not available. Smart therefore writes a letter to Wiley revoking the offer and posts it immediately by first-class mail. When Wiley arrives at his office on the following day he notices that among the incoming mail is a franked envelope bearing the slogan ‘Speedy Ltd for your Computers’. It occurs to him
2 that the envelope might contain a retraction of the offer made by Smart and decides not to open it immediately. Instead he dictates a letter to his secretary accepting the offer and tells her to post it before lunch. After lunch Wiley, having ascertained that his secretary has posted his letter, opens the letter from Smart and discovers that it is indeed a revocation of the offer made the previous day. Nevertheless Wiley ring Allick, the area sales manager of Speedy Ltd, and asks for delivery of the computer. Allick replies: ‘We cannot possibly sell at this price. Surely you received our letter this morning?’ ‘Yes,’ say Wiley, ‘it came first delivery but I had already posted my acceptance before I had a chance to open all my mail.’ Wiley intends to sue Speedy for breach of contract. Will he succeed? Which one of the following decisions is the court likely to make? and EXPLAIN why?
A. That Wiley accepted Smart’s offer when his secretary posted the letter of acceptance and Speedy is bound to sell the machine at Smart’s price. B. That Smart’s letter of revocation took effect after Wiley had had a reasonable time in which to read it after delivery. Since such an opportunity occurred before Wiley accepted, Speedy is not bound. C. That Smart’s offer was withdrawn when the letter of revocation was delivered so that Wiley’s acceptance was not effective and Speedy is not bound. D. That Smart’s offer was withdrawn when the letter of revocation was posted so that Wiley’s acceptance is ineffective and Speedy is not bound.
3. On 1 November Adder, an accountant, receives through the post at his office a large volume entitled Tax Made Easy. Accompanying the volume is a note from the publishers, Messrs Galley & Co, stating that the volume will greatly assist Adder in his work and that if he does not reply within seven days Messrs Galley & Co will assume that he wishes to purchase the volume and they will expect to receive a remittance of £12. Adder does not wish to purchase the book but forgets to reply to Galley & Co. At the end of the month he receives an invoice for £12 from the publishers. Is Adder obliged to pay for the book? Which one of the following statements is correct? and EXPLAIN why? A. Adder must pay for the book since he did not tell Galley & Co within seven days that he did not want it. B. Adder cannot be made to pay for the book but must return it to Galley & Co. C. Adder must pay for the book because it is a business not a private transaction. D. Adder cannot be made to pay for the book and need only make it available for Galley & Co to repossess.
