!Contract!A!! The!following!4!headings!are!all!the!material!elements!of!a!contract!! Agreement:!!

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1 ContractA Thefollowing4headingsareallthematerialelementsofacontract Agreement: anofferandanacceptanceandcommunicationofacceptance Consideration: havepartiesstruckabargain? Intention: dopartiesintendtheiragreementtohavelegalconsequences Certainty: havethepartiesclearlyidentifiedtheirrightsandresponsibilities? Privity:onlypartieswhoareprivytothecontractareallowedtosue Capacity:childrenandthementallyimpairedareunabletoenterintoacontract. Whatisacontract? Acontractisanagreementorsetofpromisesthatacourtwillenforce Itisanexpressionofthejointwillofpartiesengagedinatransactionthatfacilitatesthe freedomofthosepartiestocreatetheirownprivatelaw. Problemswithdefinitions: =Courtsfavourobjectivestandardstodeterminewhethertherewasintention.Theydo thisbytestingwhetheranyreasonablepersonwoulddetermineanintentionandthey dothisbecauseit sfair. DCourtsdeterminetermswhichcanchangewhatpartiesintended DAssumescontractsarefullyunderstoodbybothparties D Moststandardformcontractsarenonnegotiableforexampleaphonecontract D standardformmaynotbeunderstoodandthereforetheirreliabilityisquestion Whydoesthestateinvolveitself? ensuresindividualscanformacontractbetweeneachother balanceindividualfreedomtocontractwithsocialobjectives/values promoteseconomicefficiency Agreement 1.Offer 1. Acceptance 2. Communicationofacceptance a. apartyneedstolettheotherpartyknowoftheiracceptance

2 b. ifcommunicationisnotpresenttheretypicallyisnocontract Traditionalapproachofofferandacceptanceisadoptedbycourts thereisnotalwaysclearofferandacceptance,wehavetolookforanascertainable offerandacceptance Terminology Beforethecontract:offeror offereedthepersonwhochoosestoeitherrejectoraccept Afterthecontract:promisorDpersonwhohasmadethepromise promiseedpersontowhomthepromisehasbeenmade Whatisanoffer?anofferisanindicationbyonepersontoanotherofhisorher willingnesstoenterintoacontractwiththatotherpersononcertainterms(carter) Howdowedetermineifithasbeenmade? Itisdeterminedbythereasonablepersoninthepositionoftheofferee.Thisisan objectivetest Whatisreasonableinallthecircumstances GibsonvManchestercitycouncil1979 Facts: Council maybepreparedtosellthehousetoyoufor2,180pounds Ifyouwouldliketomakeformalapplicationtobuyyourcouncilhome,pleasecomplete theenclosedapplicationformandreturnit Gibsoncompletedtheapplicationformandreturnedittothecouncil MrGibsonreturnedtheapplicationbutleftthepaymentsectionblankbecausehe wishedtonegotiate councilchangedtheirmindanddecidedtheynolongerwantedtobuytheland Issues: MrGibsonarguedthatthecorrespondencewasbindingandtherewasacontract Gibson:onwhatgroundsdidhearguehehadacontract? offer:theletteronthe10thoffeb Acceptance:sendingbacktheapplicationonthe5thofmarch Council:onwhatgroundsdidtheysaytherewasnocontract? offer:mrgibsonreturningtheformwashisoffertothem acceptance:theyneveracceptedmrgibson soffer ThetrialjudgeheldinfavorofGibson Courtofappealsaidhedidhaveacontractbecausetherewascorrespondence. AsthisdecisionweigheduponmanytennantsinGibson spositionthecouncilappealed tothehouseoflords. LordDiplocksaidthequestioncouldbeansweredbylookingattheconventional approachofcontracts: theterms maybe and ifyouwouldlike werefataltothiscaseasthisprovedthere

3 wasnoofferandthereforenocontract Thereforeitwasconcludedthattherewasnocontractandtheappealwasaccepted. Typesofcontracts Bilateralcontract Thereare2partiesinvolved bothpartiesexchangeapromiseforeachtodosomethinginthefuture bothpromisesareexecutory:tobeperformedafterthecontracthasbeenformed Unilateral 2partiestothecontract onlyoneofthepartiesmakesapromise onlyonepartyiseverundercontractualobligation thecontractisformedwhenonepartyacceptstheoffer(egfindingsomeone slostdog) CarlilvCarbolicSmokeBallCompany Bilateral Acontractcanbemadewithoutcommunicatinginanyway Carbolicadvertisedtheballthat100wouldbepaidtoanyonewhousedtheball2D3 timesdailyandcontractedtheflu Carbolicwerebasicallyguarenteeingtheefficiencyoftheproduct Carlilboughttheballandwithin2monthsshegottheflu MrsCarlilarguments Mrscarlilmadeaclaimanditwasrejected Shearguedthattheadwastothepublicandthatsheacceptedthatoffer Carbolic sarguments Carbolicarguedthattherewasneveranofferoracceptenceandiftherewasshedidnot notifyacceptance Theyarguedthattheadwastoovagueanddidnot/couldnotaddresseveryone Keyissue:wasitapuff? abusinesscanmakecertainclaimsthatarenotbindinganddonotintendtoactually giveawayanythingegredbullgivesyouwings Thisadcouldnothavebeenamerepuffbecausetheysaidthattheyhadbut1000 poundsintobanks,whichisfartoospecifictobepuffery Thedepositshowedsincerityinthematter Carbolicargued: therewasnoacceptanceorcommunication Courtresponded: thinkingpractically,itdoesn tmakesenseforanybodywhoperformstheconditionto

4 notifythattheyhaveacceptedtheoffer MrsCarlilacceptedtheofferbybuyingthesmokeballandusingitaccordingtothe directions thedefendantdidnotexpecttoreceivenotification theyimpliedintheadthattherewasnoneedfornotification Theadwasaddressedtoeverybody Thecourtconsideredwhether everybody wastoobroadbutdismissedthis Carbolicargued: ThatentitlementwasnotclearDtimelimitwasnotclearDhowlongtheguarantee protectsyoufor Courtargued: 1.ifyouuseditthreetimesadayfor2weeksandgotthefluyouwerewithina reasonabletimeafteracceptingtheoffer 2.youareonlyprotectedwithinthe2weeksthatyouaresupposedtobeusingthe smokeball Takinginmindthesetwooptions,shestillgotsickwithinthe2weekswhileusingthe smokeball McRobertsonMillerAirlineServicesvCommissionerofStateTaxation Thecourtwasrequiredtousecontractlawprinciplesandworkoutwhentherewasan offerandacceptanceinthiscase youhandedovermoneythenreceivedaplaneticketwhichhadthetermsand conditionsonthebackofit doestheticketconstituteanagreement? technicallyofferwouldbethepersonhandingovermoneyandtheacceptancewouldbe givingthetickettothepatron theysetthetermsaftergivingtheticket:partoftheacceptancenottheoffer highcourtunanimouslydecidedthatitwasnotanacceptance BerwickCJ Iftherewasacontract,thentheticketisarecepitandcannotbeconsideredanoffer beausetheyarenowtermsthatthepassengerhadnotseen passengershowsupandisofferingtohavetheseatontheplane Ifairlineallowsyouontotheplanethentheyareacceptingyouroffer StephenJ: arguedthattheofferwastheissueoftheticketandtheacceptancewasthepassenger allowingenoughtimetopasswithoutaskingforthemoneybackdreasonable opportunitytoreadtheconditions Theappealwasallowed(airlinewasofferingandpassengerwasaccepting)

5 OffersvInvitationstotreat Aninvitationtotreatisaninvitationtootherstomakeanoffer aninvitationtotreatisonepersoninvitingsomeoneelsetoenterintonegotiation anyacceptancedoesnotcount catalogues:notviewedasanoffer PharmaceuticalSocietyofGreatBritainvBootsCashChemist eachstoreoperatedwithselfservice pharmacistshadtocheckbaskets saleofcertainmedicineshadtobechecked Defendent(boots)argued: Thatthegoodsontheshelfwastheofferandtheacceptancewasputtingitintoa basket Courtargued: youarenotcontractuallyboundbypickingupanitem thecourtsaiditwasn tanofferbutaninvitationtotreat customerisindicatingwhatheneedsbyputtingthemonthecounterandthecustomer payingistheacceptancebythestore Auction anauctionisaninvitationtotreat ifthereisareserveandithasnotmetthereservethentheywon tsellthehouse theythensay we llputitonthemarket AGC(Advances)LtdvMcWhirter AGChadamortgageovertheland AGCputupthelandforsale thehighestbidderwaslessthanthereserveandtheauctioneeragreedtoputitonthe market McWhirterplacedahigherbidwhichwasnotaccepted,rathertheunderbidder(70,000) wasacceptedinstead CourtrejectedtheUKlawthatstatesyouhavetoacceptthehighestbidder:itargued thateverybidisnotbinding,nocontractsexistuntilacceptance(thefallofthe hammer) auctioneerisentitledtoacceptanyofferandnotnecessarilythehighestbidder Tender Biddersdon tknowwhatotherpartiesarebidding atenderissubmittedasanoffer governmenthasthechoicetoacceptordecline,sometimesthecallfortendersis actuallytheoffer

6 HarvelainvestmentsltdvRoyalTrustscoofCanada Thecallfortenderswastheoffer thehighestbidderwouldbeaccepted Harvelaoffered$2,175,000 SirLeonardoffered$2,100,000or101,000inexcessofanyotherofferDboundtobethe highestbidder trustinvitedbothpartiestosubmitasingleoffer whowasthehighestbid? HouseofLordsinconsistentwiththemakingsofareferentialbid asingleofferdtheywerenotmeanttobebiddingagainsteachother iftheybothmadereferentialbidsthesalecouldhavegoneonforever Harvelawon HughesAircraftSystemsInternationalvAirservicesAustralia*******REREAD****** Facts: invitationbycaatotenderforcontractforinstallationofnationalairtrafficcontrol system thetenderprocessitselfunderwentsignificantmodificationanditwasbetweenhughes andthomson innegotiationspriortothesubmissionoftenders,thepartiesagreedtoasetof guidelinesfortheassessmentoftenders,inparticularthattherewouldbe fairness betweenthetenderers Held: ThecourtfoundthatHughesAircraftreliedontheserepresentationsindecidingto participateinthetenderprocessandthereforetheselectionofatenderwasrequired tofollowtheproceduresandbeinaccordancewiththecriteriaspecified. breachofcontractfoundwhenairservicesaustraliafailedtoabidebytheagreed guidelinesforassessmentandawardedthecontracttoanothertenderer Hughesaircraftwasawardeddamages Terminationofanoffer revokedatanytimepriortofindingoutwhetherithasbeenaccepted thisisevensoiftheoffererpromisedtokeeptheofferopenforacertainperiodoftime, theoffererisatlibertytowithdrawatanytime thisissobecausetheoffereehasnotgivenanyconsiderationtokeeptheofferopen cannotbewithdrawnifconsiderationhasbeengiven GoldsbroughMort&CoLtdvQuinn Quinwaspaid5shillingsfortherighttopurchasethepropertywithinaweek(almost likelaybuy)

7 Quinnwithdrewandarguedthattherewasnocontract Goldsborougharguedthattherewasconsiderationforthepromiseandthereforeitwas binding ThecourtarguedthatthetransactionwasacontractthatwithinaweekGoldsborough wouldmakethedecisiontobuyit QuinnwasthereforeboundtotheofferandGoldsbroughwonthecase Revocationinunilateral contractisformedafterobligationshavebeenfulfilled canonerevoketheofferbeforethepersonbeginstheobligation? onecannotrevokeonceanacthasbeenpartlyperformed thisgeneralrulewasrejectedinthecaseofmobiloil MobilOilAustraliaLtdvWellcomeInternationalPtyLtd(1998) Franchiseeswouldberewardedforgoodperformance anyfranchiseewhogetshigherthan90%wouldbeentitledtoa9yearrenewal offerismadeandacceptancedoesnotneedtobenotified mobilwasawarethatsomewerebusilyworkingonthistarget thereisnouniversalrulewithregardstorevocationofaunilateralcontract,mustbe judgedcasebycase Franchiseesdidnotsufferadetrimentbyimprovingtheirownperformanceand thereforetherewasnorealconsideration Anoffermadeinreturnforperformanceofanactis,likeanyotheroffer,revocableat anytime misleadinganddeceptiveconductwasaprobleminthiscase mobilrevokedafter4yearsandwassuedby154franchisees Deathofaparty FongvCilli(1968) deathofapartyoftencausesterminationoftheoffer offereecannotaccepttheofferafterhelearntthattheoffererhaddied thismeansthatanoffereemaybeabletoaccepttheoffereveniftheofferorhaddied, ifhisacceptancewascommunicatedbeforehehadfoundoutaboutthedeath Cilliwerebrothers onesignedbeforefongdied,theothersignedafterhedied executorysaidthecontractwasnolongervalidastheofferwasnolongeravailable Week2:ACCEPTANCE TheObjective)approach)considersonlytheoutwardmanifestationsratherthanactual consensus.

8 The)Subjective)approach)considerswhethertherewasarealunderstandingbetween theparties Whatisacceptance? Itisthe unqualifiedassenttothetermsofanoffer anofferhastobeacceptedfortheretobeanagreement someonemakesanoffer,someoneaccepts thisdefinitionconnotesanideaofanexpressstatementmadeinresponsetoanoffer butwehavetorememberthatbehaviourcanalsoconstituteacceptance amanifestationofwillingnesstobeboundbythetermsofanoffermadeinamanner invitedorrequiredbytheoffer Determinationofagreement agreementcouldbebyconductnotnecessarilyverbal easyifit swritingandifit sstated ifsomeonehasactedinawaywhichindicated(tothereasonableman)willingnesstobe bound,whatconductdotheyneedtoshow? TaylorvJohnson(1983) Facts: Johnsonowned5acresoflandandmadeanoffertoTaylorfor$15,000tobuytheland (hethoughthemeant$15,000peracre) Tayloraccepted Johnsonrealisedhismistakeandrevokedtheoffer Taylorsued Thecourtheld Subjectivetheory:bothpartiesmustbeadidem(samemind)thetrueconsentofboth partieshastobegiven Objectivetheory:thelawisnotconcernedwiththerealintentionsofapartybutrather theoutwardmanifestationoftheseintentions(theirbehaviour) Inthiscase,theobjectivetheoryprevailed SmithvHughes(1871) Facts: Hughesboughtoatsofsmiththinkingtheywereoldoats,theywereinfactnewoatsand theyweredeliveredtohughes,whodidnotacceptthem Smithsuedforbreathofcontract Whatdidthecourthold? BlackburnJheldthatasubjectivetestshouldbeapplied thereisnocontractifthepartiesarenotadidem(inthesamestateofmind) estoppelapplies: areasonablemanwouldbelievehewasagreeingtothetermsand uponthatbelieftheotherpartyentersintocontract,themanwouldbeequallybound asifhehadintendedtoagreetothoseterms thecourtlookedatactualmanifestationthatmaynotbewhathewasthinking

9 theyfoundthathugheswasbound Objectively,theyhadacontract inhismindhethoughthewasagreeingtonewoats,butasareasonablepersonthey hadanagreementbuthewassimplymistaken hehadasamplemeaninganyreasonablepersonwouldthinkheknewwhattheywere if,whateveraman srealintentionmaybe,hesoconductshimselfthata reasonablemanwouldbelievethathewasassentingtotheterms proposedbytheotherparty,andthatotherpartyuponthatbeliefenters intothecontractwithhim,themanthusconductinghimselfwouldbe equallyboundasifhehadintendedtoagreetotheother sterms. Fitnessfirst(australia)vChong(2008) Facts: MsChongjoinedfitnessfirstbutdidn treadthetermsbeforeshesignedit sheterminatedthecontractbutdidnotwanttopaythecancellationfee Mschongtookittocourtbecauseshedidnotwanttopaythe200dollars Held: thecourtheldthatshewasliableforthemoneyeventhoughshedidntreadit bysigningitshebehavedinawaythatanyreasonablepersonwouldconcludeshewas assentingtotheterms Generalrules:GeneralRule1 Acceptancemustbein)responsetoanoffer(ie.onecannotacceptinignoranceofan offer) ifthereisnooffer,thereisnoacceptance TheCrownvClarke(1927)Facts ThecommissionerofPolicegavenoticethathewasauthorisedtoreward$100for informationthatleadstothearrestandconvictionsofthepersonswhocommitted themurders freepardonwasofferedtoanyaccompliceinthemurderswhogaveinformation TreffeneandClarkewerearrestedandchargedwithoneofthemurders Clarkemadeastatementwhichleftothearrestofanothermurderor Clarkewasreleasedandclaimedthereward Clarkeknewaboutthereward/offerbutgavetheinformationtoclearhimselfofthe murdercharge Headmittedthathewasmotivatedtomakethestatementbyhisdesiretoclearhimself ofthecharges Thecourtheld:ISAACsACJ: hewasactingwithreferencetoaspecificchargeagainsthimselfandnotinreferenceto ageneralrequestmadebythecommunityforinformationagainstothers

10 notalegalormoralclaimtothereward performanceofthetermsistheacceptance HigginsJ: Clarkedinotactinfaithof,inrelianceupontheproclamationbutratherhewasacting uponhopeofhisrelease Ruling hecannotclaim,hewasnotacceptingtheoffer,hewastryingtoclearhimself GeneralRule2 Acceptancemaynotbeinferredfromsilence FelthousevBindley Facts: Plaintiffwrotetonephewjohnofferingtobuyhorsefor30poundsandsaid ifihearno moreabouthimishallconsiderthehorsemine nephewdidn tanswertheletter 6weekslateranauctioneerwashiredbyJohntosellfarmstockbuthedirectedthe auctioneernottosellthehorseyet theauctioneersolditbymistake plaintiffsuedauctioneer canplaintiffsue?iftherewassilencedwasthereacontract?(onlypeopleinvolvedina contractcansue Held:WillesJ: nephew,inhisownmind,deemedthehorsesoldbuthehadnotcommunicated acceptancetohisuncle acceptancecannotbeconstitutedbysilence therewasnocontract conductmayamounttoacceptance(withoutstatementorwriting) questionbeing:whatisthedifferencebetweensilenceandconduct theremustbesomekindofpositiveact EmpirnallvMachonPaull(1988) Facts: EmpirnallDpropertydeveloperDretainedMachonDarchitectsDtodrawplansupetc EmpirnallthenaskedMachoniftheywereinterestedinactingasprojectmanagerfor thedevelopment Machonrepliedintheaffirmative FurtherworkwasdoneandMachonrequestedpaymentandtheexecutionofacontract fortheworks 2paymentsweremadebutthecontractwasnotsigned MachonwrotetoEmpirnallthattheywereproceedingwiththeworkonthe understandingthatthecontractwasaccepted

11 Issue:wasthereacceptanceofthetermsoftheoffer(didpaymentindicateacceptance) McHughJA: afterareasonabletimehaselapsed,silenceisseenasarejectionandnotanacceptance ofanoffer communicationofacceptanceisnotalwaysnecessary forinstance,ifithasbeenstipulatedthatoneisunderadutytocommunicatetheir rejection,silencemayindicateacceptance anofferorcannoterectacontractbetweenhimselfandtheoffereebythedeviceof statingthatunlesshehearsformtheoffereethecontractwillbebinding onecannotassertthattheywillregardsilenceasanacceptance howeverinthiscase,itisnotsomuchacceptancebysilencebutratheracceptanceby theoutwardmanifestationofpayment EmpirnallpayedMahonfortheirworkindicatingacceptance Empirnallreliedonthestatement ericdoesnotsigncontracts asanindicationof rejection therejectionwasnottothetermsbuttothewayofacknowledgingthem abystanderwouldobservethatpayingmachonindicatedacceptance BramblesholdingsltdvBathurstcouncil Facts: 1982:BramblesDdefendantandthecouncilDplaintiffDenteredintoacontractforthe defendanttomanagethesolidwastedisposaldepot 1985:Bramblesstartedtoreceiveliquidwasteforfree 1990:Firstcontractexpired,partiesnegotiatedforanewcontract plaintiffaddressedtheliquidwastebutthefinalagreementonlyreferredtogeneral waste Sept1991:councilwrotetoBramblestoincreaseliquidwastedisposalfeesand additionalincomeshouldbeplacedinafundfortheestablishmentofaliquidwaste treatmentplan Oct1991:Bramblesrespondedthattheydenythatthe2ndcontractevercoveredliquid waste theywentaheadandchargedtheincreasedfeesetoutinthecouncil ssemptember letterandretainedthemoney CouncilclaimedacontractualentitlementtoalladditionalincomereceivedbyBrambles fromfeeincrease Issue:wasthereacontractcoveringliquidwasteandifso,onwhatterms? Thetrialjudge sreasoning thedefendantacceptedthe1991contractbyhisconductdchargingtheextraamount forliquidwasteddespitenotacceptinginhisoctoberletter Law:cannotimposethedutytocommunicaterejection GeneralRule3

12 Acceptancemustbecommunicated anofferormaywaivenotificationrequirement,whichisalwaysthecaseofaunilateral contract egcarlilvcarbolicsmokeball Inbilateralcasesyoumustcommunicateacceptance inaunilateralcontract,orinacontractwheretheofferorhaswaivedtherequirement yocommunicateacceptance LatecFinancevKnight(1969) Facts Bilateral Financecompanyarguedthatacceptancehadbeenwaived KnightfilledinsignedandreturnedLatec shirepurchaseagreementthatincludedthe followingterms theformisanofferbythehirer theofferwasinvocablefor7days thereisnohirepurchaseagreementuntillatecsignstheform Latecprocessedformand accepted Knight sofferbutdidnotcommunicatethis acceptance KnightreturnedTVbecauseitwasdefective,hehadnotmadeanypaymentsunderthe purchaseagreement Hedeniedtheexistenceofacontract Latecsuedforbreachofcontract Courtheld:JacobsJA generally,anofferhasnotbeenaccepteduntilacceptancehasbeencommunicated thiscanvarybutonlyifthevariationismadeclearintheoffer theofferormayagreetotreatthedoingoftheactisenoughtoactaseffective acceptance theofferortreatsthetransmissionofacceptancebyparticularmethodaseffective regardlessofwhethertheyreceiveacceptance courtheldthatcommunicationofacceptancewasnotpresentsotherewasnoeffective acceptancebeforeknightrevoked youhavetoknowyouhaveacontract Communicationofagreement communicationofacceptanceoccurswhenandwherethefactofacceptancereaches theofferor remember:anytimebeforeacceptance,theoffercanberevoked egsayintheknightvlateccase lateccalledhimonhiswaytoreturnthetvsayingtheyhaveaccepteddthecontractis binding assoonastheofferorknowsthattherehasbeenacceptance,thecontractisbinding theplaceisimportantbecausesometimesyouneedtodeterminewherethecontract wasacceptedtofindoutwhichlawappliesandwhichcourtwillhavejurisdiction

13 forexampleifsomeoneoffersacarfromsydneyandsomeoneacceptsthatofferin melbourneandthencommunicatesthatacceptancetothesellerinsydneythenthe contracttookplaceinsydney NOTE:thecountryorstatewhereacceptancewascommunicatedto,oracceptancewas receivedistheplacethatthecontractoccurs Postalacceptance acceptanceisimmediatelyeffectiveonthepostingofareplysolongasitwas contemplatedbythepartiesthatthepostwasapossiblemodeforcommunicating thatacceptance themomentthatitissentdwhetherornotitactuallyeverarrives AdamsvLindsell(1818) Facts: defendentswrotetotheplaintiffsanoffer(requestedthattheplaintiffsreplyvialetter) theletterwaspostedbutarrived2dayslatersothedefendantssoldtheproducttoa thirdparty theplaintiffssued Courtheld: courtheldthattherewasacontract,asacceptanceoccurredwhentheletterwas posted BrinkibonltdvStahagStahl(1983) Facts: plaintif(brinkibon)sentatelex(likeafax)fromlondontoaustria(tothedefendant [stahl])acceptingtheaustrianofferforgoods plaintiffclaimedthecontractwasformedinenglandwhenthetelexwassent plaintiffarguedthatthepostalacceptanceruleshouldbeputinplace Issue:shouldthepostalacceptanceruleapply? Thedefendanthadbreachedthecontractandtheplaintiffwantedtobringlegalaction fromengland Courtheld:LordWilberforce thegeneralruleisthatacontractisformedwhentheacceptanceiscommunicatedby theoffereetotheofferor ifitisnecessarytodeterminewhereacontractisformed,itislogicalthatthisshouldbe theplacethatacceptanceiscommunicatedtotheofferor thejudgeheldthattelexfallsunderinstantaneouscommunicationdgeneralruleisthat acontractismadewhenandwhereacceptancewasreceived(austria) CommonlawdistinguishesbetweeninstantaneousandnonDinstantaneousmodesof communication instantaneous:face=to=face,phonecalls non=instantanous:letters atelexfallssomewhereinbetweenbutcourtcametotheconclusionthatthemessage tookeffectwhenitreachedtheofferor

14 Electroniccommunications Statutehasintervened UNICITRALmodellawandinternationalconvetion (1996)proposedforcountriestoenactis,harmonisecommunicationbyelectronic meansacrosstheworld Invictoria,anElectronicTransactionsAct(2002)wasenacted Placeofdispatch EDcommunicationistakentohavebeendispatchedattheplacewheretheoriginatorhas itsplaceofbusinessand receivedattheplacewheretheaddresseehasitsplaceofbusiness Timeofreciept: ifanelectronicaddresshasbeendesignatedbytheaddressee: timewhentheedcommunicationbecomesavailabledcapableofbeingretrievedbythe addressee ifnoelectronicaddresshasbeendesignated timewhenboth theedcommunicationbecomescapableofbeingretrievedand theaddresseehasbecomeawarethattheelectroniccommunicationhadbeensentto thataddress edcommunicationcovers: ,sms,onlinemessagesandfax Generalrulenumber4 Acceptancemustcorrespondwiththeoffer consequencesofnondcorrespondence ifimadeanofferyoumustbeaccepting,inwhole,myofferandterms eitheryouaccept,oryouproposeacountryoffer acceptancemustcorrespondpreciselywiththoffer offerempowerstheoffereetodonomorethanacceptorrejectthetermsproposedby theofferor iftheoffereeattemptstovarythesetermsoraddtothem,theclaimedacceptancewill amounttoacounterofferwhichwillgiverisetoacontractonlyifitisacceptedby theoriginalofferor Battleofforms:businesshavetheirownformswhichcansometimescompeteagainst eachother ButlerMachineToolsvExDcellDOpcorp Facts: ButlerMachineToolCo.madeandsoldmachines SentalettertoExDCellDOpin1969offeringthemsomenewmachineryforover70,000 dollars AlongwiththeletterwasButler sstandardcontracttermswhichincludedaprice variationclausesoiftheirmanufacturingcostswentup,thepricewouldberaised

15 ExDCellorepliedwithacceptancebutontheirownstandardterms,whichdidnothavea pricevariationclause Butlerrepliedwithatearoffslipwhichread weacceptyourorderonthetermsand conditionsstatedtherein Butleraskedformoremoneyupondelivery,ExDCelloDOprefusedtopayandButlersued Issue: Whosetermswasthecontractmadeunder? Courtheld: inthestandardformoftheseller sformithadafixedprice butlermachinesentbacktheformsigned triedtochargeanadditionalfeebasedontheirpricevariationclause thetermsofthecontractwerethatofbutlermachineandthereforetheyshouldbeable tochargethehigheramount ExDcellDoappealed LordDehning thequotationofthepricewasanoffersubjecttotermsandconditionsandtheorderby ExDCellDOconstitutedacounterDofferwhichButleraccepted traditionallyacounterofferkillsanoriginaloffer Dehningsaidthebestwaytolookatitistolookatallthedocumentspassingbetween theparties,andtheirconduct,todeterminewhetherthey vereachedagreementon allthematieralpoints thereisacceptanceassoonasthelastformissentandreviewedwithoutobjectiontoit manwhofiresthelastshotormanwhogetsthefirstblowin butinsomecasesthebattledependsontheshotsfiredonbothsides:thiscase inthiscaseitwasemphaticthatthepricevariationclausecontinuedthroughallthe subsequentdealingsandthebuyersmusthavetakentoagreedtoit Therearetwodifferentapproachesthatcanbefoundinthisjudgement Synthesisandconflict Theconflictapproachtreatstheexchangeoftermsasabattleandrequiresthecourtto determinewhichsetoftermshasprevailed thebattlewillbewoneitherbythepartywhofiresthelastshotorbythepartywhois mostpersistentininsistingthattheirownsetoftermsshouldprevail Thesynthesisapproachwouldrequirethecourttobuildacontractfromthetwosetsof terms Thesynthesisedcontractwouldbemadeupofconsistentterms,alongwithtermsfrom onesetthatappearedtobeacceptedbytheotherparty anygapsinthesynthesisedcontractcouldbefilledwithtermsimpliedbythecourt

16 1. Whatisthenatureofacontract?Definitionstobeapplied Acontractisconstitutedbyanofferandacceptance.Theacceptancemustbecommunicated to an offeror before the contract is binding. There are 4 main elements that make up a contract:agreement,consideration,intention,certainty.thetwopartiesmustagreeonthe termsofthecontract,theymuststrikeabargain,theymustintendfortheiractionstohave legalconsequences,andtheymustbebothunderstandingofthetermsofthecontractdhave clearlyidentifiedtheirrightsandresponsibilities 1. What is the difference between a unilateral contract and a bilateral contract?there are two types of contract: unilateral and bilateral. In a unilateral contractonepartyofferssomethingandtheotherpartyacceptswhereasinabilateral contractthereissomekindofexchange,ie.onepersonoffersahorseinexchangefor money. 2. Whatconstitutesanoffer?Definitionofofferandrelevantcaselaw Anofferisanindicationbyonepartythatthereisawillingnesstoenterintoacontractwith anotherparty. 1. Whatisaninvitationtotreat? An invitation to treat is an invitation to others to make an offer. For example, in the boots casetheitemssittingontheshelfwereaninvitationtotreat,aspickinguptheitem,puttingit intothebasketandthenplacingtheproductonthetablewasanoffermadebythecustomer towhichtheshopownercaneitheracceptorrefuse. 1. Whencananofferbeterminated? In a unilateral contarct, an offer can be revoked before there is acceptance. Yet acceptance maybedefinedasperformancesuchasinthecaseofrunningamarathon.ifyoutellpeople to run a marathon and you will give them 100 dollars if they complete it, acceptance is marked by performing the task not by beginning it and therefore the offer can be revoked until the entire marathon is ran by a participant. In a bilateral contract the offer can be revokedatanytimepriortofindingoutwhetherithasbeenaccepted.cannotbewithdrawnif considerationhasbeengiven. 1. Whatconstitutesacceptance?

FORMATION OFFER: (2) Elements: Sufficiently clear and promissory (Gibson v Manchester) More than a mere puff (Carbolic Smoke Ball)

FORMATION OFFER: (2) Elements: Sufficiently clear and promissory (Gibson v Manchester) More than a mere puff (Carbolic Smoke Ball) FORMATION [A] will argue that a binding contract exists, and seeks to enforce [B] s promise of. In this case, the elements of and are likely uncontentious, but [A] will have to make out and _. OFFER: [A]