Offer and Acceptance
An offer is a definite promise to be bound on specific terms, communicated to the offeree. It must be distinguished from an invitation to treat (ITT), which invites offers.
Key Distinctions
- Display of goods = ITT, not an offer: Pharmaceutical Society of GB v Boots Cash Chemists [1953]
- Advertisements (general) = ITT: Partridge v Crittenden [1968]
- Unilateral offer by advertisement = valid offer: Carlill v Carbolic Smoke Ball Co [1893] (specific promise, act as acceptance)
- Auction — call for bids = ITT; each bid = offer; hammer-fall = acceptance: Payne v Cave (1789)
Acceptance
- Must be unconditional and mirror the offer exactly. A counter-offer destroys the original offer: Hyde v Wrench (1840).
- Mere inquiry is not a counter-offer: Stevenson, Jacques & Co v McLean (1880).
- Postal rule: acceptance complete when letter posted (correctly addressed, stamped), not on receipt: Adams v Lindsell (1818). Does not apply to instantaneous communication.
- Instantaneous communication (telex, email): acceptance effective on receipt at offeror's end: Entores v Miles Far East Corp [1955].
Certainty
- Agreement must be sufficiently certain; courts will strive to give effect to commercial agreements but cannot enforce agreements too vague to have meaning: Scammell v Ouston [1941].
- An agreement to agree on a material term is void for uncertainty.
Communication of Acceptance
- Offeror may waive the need for communication (unilateral contracts — Carlill).
- Acceptance must be by an authorised method; silence cannot amount to acceptance: Felthouse v Bindley (1862).
Common SQE Traps
- Confusing a counter-offer (kills original offer) with a request for information (does not).
- Applying the postal rule to email: postal rule does not apply — receipt governs.
- Assuming a shop window display is an offer.
Exam tip: In problem questions, work methodically — identify offer, acceptance, consideration, and intention separately before concluding a contract exists.