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Formation, Intention & Consideration notes

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Queensland University of Technology

LWB136 – Formation, Intention, Consideration Notes Formation (Offer & Acceptance) Offer Definition: The expression to another of a willingness to be bound by the stated terms Offeror  Person who makes the offer (Promisor) Offeree  Person who receives the offer (Promisee) Invitation to treat is not an offer. • Advertising in catalogue etc = invitation to treat (Grainer v Gough) • Goods displayed in shops (Pharmacutical v Boots Cash) Mere statement of price which someone would sell for is not an offer (Harvey v Facey) Court will determine whether ad is offer of invitation by examining likely effect on potential customer (Carlill) Offer can be made to whole world (Carlill) Offer is effective when and not until it is communicated to the offeree (Taylor v Laird) Standing offer can be withdrawn or revoked at any time prior to acceptance (Great Northern v Witham) Offer can be terminated at any time before it is accepted. Once accepted = irrevocable (Great Northern) In an option, offer cannot be terminated before option has expired (Goldsborough Mort v Quinn) Revocation of offer is ineffective until communicated to and received by the offeree (Byrne v Van Tienhoven) Unilateral offer cannot be withdrawn after promisee has started performing the necessary actions (Abbott v Lance) An offer must be accepted in the prescribed time or within a reasonable time (Ramsgate v Montefiore) • Reasonable time is a question of fact Offeree cannot accept an offer after notified of offeror’s death (Coulthart v Clememtson) If offree dies, representatives cannot accept offer of the offeree’s behalf (Reynolds v Atherton) Offer can be terminated by: 1. Withdrawl by offeror 2. Rejection by Offeree 3. Lapse of time 4. Failure of a condition subject to which the offer was made 5. Death. Acceptance Definition: The expression, by words OR conduct, of the assent to the terms of the offer in the manner prescribed or indicated by the offer. A person cannot accept an offer which has not been communicated (Taylor v Laird) To be valid acceptance: 1. Offeree must intend to accept terms of offer 2. Intention to accept must be communicated to offeror Counter-offer is not acceptance of original offer (Brogden v Metro) Inquiry is not acceptance (Jacques v McLean) Conditional assent is not acceptance (Masters v Cameron) “Subject to” = no binding contract until formal contract is executed Silence is not acceptance (Felthouse v Bindley) Offeror may waive need for acceptance to be communicated (Carlill) Postal acceptance rule will apply where it was within the contemplation of the parties that the post would be used (Adams v Lindsell) Certainty – Certainty and Completeness There is no legally binding contract unless what the partes agreed can be determined objectively with a reasonable degree of certainty (Scammel v Ouston) • However, law is anxious to uphold contract, so it will imply meanings to make a contract certain wherever it can (Hillas v Arcos) Agreements to agree can be enforceable if the terms are sufficiently certain (Coal Cliff v Sjihan) • Agreement to agree is otherwise incomplete (May v R) When terms are to be determined by a 3 party, contract is complete (Godecke v Kirwan) “Subject to finance” = agreement is certain (Meehan v Jones) Masters and Cameron 4 Categ
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